Global Central Banks All Hiking

Good Morning Everyone!

FTX executives are turning on each other. A filing yesterday revealed that days before the bankruptcy filing co-CEO Ryan Salame told authorities that SBF may have committed fraud by sending FTX customer funds to his hedge fund Alameda.

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Prices as of 4 pm EST, 12/14/22; % YTD

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MARKET UPDATE

European Central Bank

• Raised its key interest rate by 0.5%

• Highest rate since 2009

Bank of England

• Raised its key interest rate by 0.5%

The U.S. Fed has more work to do to fight inflation

• Yesterday, as expected, Jay Powell raised the Fed Funds rate by 0.5%

• The range is now 4.25% to 4.5%

• The target rate is 5% in 2023, so one hike of 50 or two hikes of 25 expected in 2023

• The target rate is 4.1% in 2024

• Higher for longer interest rates

China

• Weaker than expected economic data

• Industrial production +2.2% vs. street at 3.5%

• Retail sales -5.9% vs. street -4.0%

• Property investment -9.8% vs. street -9.2%

• China injected 650 billion Yuan in the banking, more than 500B expected

Crude    76.20     -1.4%

• Partial restart of the Keystone pipeline

• Lack of timeline for full restart of the southern leg of Keystone

Tesla TSLA

• Elon Musk sold another $3.58 billion shares

• Brings his total sale to $40 billion to fund his Twitter purchase

Apple AAPL

• Foxconn is easing most COVID restrictions at its plant in Zhengzhou

TikTok

• Senate passed legislation that would ban federal employees from using TikTok on gov’t devices

• Legislation still needs to pass the House

Earnings

• Lennar LEN -3%

• Jabil JBL

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CRYPTO UPDATE

MetaMask x PayPal PYPL

• MetaMask added PayPal integration to wallet

• US users will be able to purchase Ethereum from app

• Should reduce onboarding friction

• PayPal users have been able to buy/sell crypto since 2020

US bill targets self-custody wallets

• Financial Crimes Enforcement Network (FinCEN)

• Would expand KYC (Know Your Customer) requirements

• Crypto wallet providers, miners, validators, others would be treated as “money service businesses”

• Would also require anti-money laundering programs

• Prohibits use of digital asset mixers (like Tornado Cash)

CZ says “99% of people” will lose crypto in self-custody

• Meanwhile, Binance withdrawals totaled ~$3 billion on Tuesday alone

Crypto Fear & Greed