Month: July 2023

The U.S. Securities and Exchange Commission on Monday charged an entrepreneur known as Richard Heart with raising more than $1 billion in three unregistered crypto asset offerings and defrauding investors out of $12.1 million to buy luxuries including a 555-carat black diamond.

In a complaint filed in Brooklyn federal court, the SEC said Heart, also known as Richard Schueler, touted his Hex token, PulseX asset trading platform and PulseChain asset network on YouTube and other websites as pathways to “grandiose wealth.”

The SEC said Heart often made superficial “tongue-in-cheek” disclaimers that his offerings were not securities but knew otherwise, as he touted that Hex was capable of 38% returns and “built to be the highest appreciating asset that has ever existed in the history of man.”

The SEC accused Heart of spending investor funds on McLaren and Ferrari sports cars, four Rolex watches and “The Enigma,” which cost 3.16 million British pounds (then $4.28 million) at auction and was purportedly the world’s largest black diamond.

Heart, 43, is a U.S. citizen believed to live in Helsinki, Finland, the SEC said. He did not immediately respond to a request for comment through LinkedIn. Hex, PulseX and PulseChain are also defendants.

The lawsuit seeks civil fines and the recouping of ill-gotten gains.

Wall Street rose on Monday with key benchmarks set to end July higher on upbeat company earnings and hopes of a soft landing for a resilient U.S. economy, while cooling inflation fuels bets on a rate-hike pause.

Investors await quarterly reports from Apple (AAPL.O), Amazon.com (AMZN.O) and AMD (AMD.O) later this week, while July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls, are also in focus.

Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. While still negative, the forecast is an improvement from the 7.9% drop estimated a week earlier.

“It looks like investors are taking a little bit of a pause,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

“The jury is still out on Amazon and Apple and markets are waiting to see if we get some positive news like we got out of Meta or Google, or if we see somewhat disappointing news like we saw with Microsoft.”

The tech-heavy Nasdaq led Wall Street higher last week as megacap growth companies such as Alphabet (GOOGL.O), Meta Platforms (META.O) as well as chipmakers Intel (INTC.O) and Lam Research (LRCX.O) posted strong quarterly earnings.

Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing.

The benchmark index is 4.8% away from its all-time intraday high hit on Jan. 4, 2022 while on course to gain for a fifth straight month.

Chicago Fed President Austan Goolsbee said the central bank was “walking the line pretty well” on bringing inflation down without causing a recession and will watch the data to judge if more monetary tightening may be appropriate in September.

At 11:28 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 41.16 points, or 0.12%, at 35,500.45, the S&P 500 (.SPX) was up 3.30 points, or 0.07%, at 4,585.53, and the Nasdaq Composite (.IXIC) was up 14.93 points, or 0.10%, at 14,331.58.

Seven of the top 11 S&P 500 sectors gained, led by a 2.0% rise in energy stocks (.SPNY).

Financial services provider SoFi Technologies (SOFI.O) jumped 16.0% on reporting better-than-expected quarterly revenue.

ON Semiconductor (ON.O) added 2.6% after the chipmaker forecast third-quarter revenue above market estimates.

Weighing on the Dow, Johnson & Johnson (JNJ.N) shed 3.9% after a U.S. judge shot down the drugmaker’s second attempt to resolve tens of thousands of lawsuits over its talc products.

U.S.-listed shares of Xpeng sank 13.8% on report that brokerage UBS downgraded the electric-vehicle maker to “neutral”, while Adobe (ADBE.O) advanced 3.9%, outperforming its tech peers, after Morgan Stanley raised its rating to “overweight” on the photoshop maker.

Advancing issues outnumbered decliners by a 3.04-to-1 ratio on the NYSE and a 1.85-to-1 ratio on the Nasdaq.

The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 71 new highs and 37 new lows.

Sunday afternoon for Ron DeSantis began at a restaurant. The Florida governor sidled into a booth to chat up a pair of newlyweds. Next he took questions at a barbecue outside a small red barn where onlookers munched on hot dogs.

His day of campaigning for the 2024 Republican presidential nomination ended at a lobster restaurant overlooking a marsh where onlookers snapped photos of him holding one of the excitable crustaceans in his hand.

Such was the first day of DeSantis’ “reboot” of his campaign in New Hampshire, the No. 2 state in the Republican nominating contest calendar after Iowa. A win in either could provide momentum against front-runner and former president Donald Trump.

Having burned through cash faster than expected since declaring his candidacy in May and having failed to put a dent in Trump’s roughly 30-point lead in Republican primary polls, DeSantis is now leaning into smaller-scale, more intimate events with voters, according to people close to the governor.

DeSantis made his name nationally by opposing many U.S. government policies to prevent the spread of COVID-19. He has since become a leading figure fighting what he argues are overly progressive polices favored by educators and corporations.

Now, he needs to give voters an opportunity to get to know him more intimately, although the new strategy has an inherent risk: DeSantis himself. Even his allies acknowledge he is not known for his natural affability.

The new strategy has the added benefit of being cheap, as the governor can hit multiple venues consecutively, with relatively little staffing and prep work, people close to the campaign say.

If the crowd at the “No B.S.” barbecue at the home of former Republican Senator Scott Brown on Sunday was any indication, DeSantis could be in for a tough slog.

Wedged into a wooden pergola, DeSantis went through such talking points as immigration and energy, before taking at least a dozen questions from attendees standing on rocks and sitting in folding chairs.

Of the nine attendees Reuters interviewed, one had previously settled on supporting DeSantis. The others unanimously said they came away impressed, but they were keeping their options open.

These are the types of voters that DeSantis will be relying on if he is to boost his small-dollar contributions, which in turn is key for the health of his campaign. About two third of the $20 million DeSantis raised in the second quarter came from individuals who “maxed out” in campaign parlance, meaning they donated the maximum permitted amount to DeSantis and can contribute no more.

Before DeSantis began his speech, Michael Lunder, a 67-year-old businessman, said he was “probably going to support (DeSantis) financially.”

After the speech, Lunder was more circumspect, saying he was impressed, but that he took issue with several of DeSantis’ policies, including his opposition to offshore wind energy and criticism of electric vehicles.

“I learned a few things that I didn’t agree with, but, in general, I think I might support him,” Lunder concluded.

In the last two weeks, the DeSantis campaign has undergone a shake-up both in style and personnel, according to several people close to the campaign.

Having spent roughly $7.9 million in the first six weeks after its May 24 launch, the campaign is tightening its belt, making sure travel is more efficient by scheduling back-to-back campaign stops and spending less on events, they said.

On Tuesday, the campaign disclosed it had let go 38 employees in recent weeks, more than a third of the staff. Among other changes, the campaign replaced the chief financial officer and boosted the remit of that position, one person said, hoping to keep a lid on costs.

For the time being, the campaign will be trying to scoop up supporters, one diner stop and lobster restaurant at a time, a process that even the plan’s proponents admit will be grueling.

Frank Cimler, an attorney in attendance at the “No B.S.” barbecue, gave DeSantis high marks, saying he would be formidable on a debate stage against Democratic President Joe Biden, who will be seeking a second four-year term.

He disagreed with DeSantis’ position that support for Ukraine in its war with Russia is not a vital U.S. national security interest. He also disagreed with the notion that the justice system has been “weaponized” against conservatives, an oft-repeated assertion of DeSantis and some of his opponents.

As he left, a volunteer asked Cimler if he would commit to supporting DeSantis.

Not yet, Cimler replied, but he would strongly consider it.

Wall Street and global stocks were virtually flat on Monday, while oil prices gained and the dollar was little changed, as traders looked ahead to corporate earnings, central bank meetings and a key employment report due later this week.

The Dow Jones Industrial Average (.DJI) rose 0.1% to 35,494.87, the S&P 500 (.SPX) gained 0.07% to 4,585.64 and the Nasdaq Composite (.IXIC) added 0.14% to 14,337.36.

Apple Inc (AAPL.O) and Amazon.com (AMZN.O) both report on Thursday, while other well-known names with results due include Caterpillar Inc (CAT.N), Starbucks Corp (SBUX.O), and Advanced Micro Devices (AMD.O).

European shares gained modestly after euro zone inflation fell further in July seeing that most measures of underlying price growth also eased. Markets took this as a comforting sign for the European Central Bank (ECB) as it considers ending a brutal string of interest rate hikes.

The pan-European STOXX 600 index (.STOXX) rose by 0.3%, heading for a second consecutive monthly gain. MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 0.17%.

The modest gains came despite China’s manufacturing activity falling for a fourth straight month in July, as demand remained weak at home and abroad, official surveys showed on Monday.

“Markets are treating information with a lot more sensitivity and people are looking into new information with a detailed eye,” said Florian Ielpo, head of macro at Lombard Odier Investment Managers.

Economic indicators that investors will be watching this week include the U.S. ISM surveys on manufacturing and services, as well as the July payrolls report.

“Data out this week should remain superficially consistent with the ‘soft landing’ narrative,” Citi market strategists wrote in a note on Monday. “But the potential return to upside surprises to job growth would raise questions about whether slowing inflation can coexist with tight labor markets.”

All three main U.S. indexes ended last week higher and appear set to gain this month as signs of cooling inflation and a resilient economy have eased investor sentiment about the economy surviving amid higher rates for longer.

Upbeat quarterly earnings from megacap growth companies including Alphabet (GOOGL.O), Meta Platforms (META.O) as well as chipmakers Intel (INTC.O) and Lam Research (LRCX.O) have also boosted investor sentiment.

Almost 30% of the S&P 500 reports results this week and so far earnings have been good enough to see the index extend its rally to 10% since the start of June.

The Dow Jones Industrial Average (.DJI) logged in July its longest winning streak in nearly four-decades underpinned by gains in sectors including healthcare, financials and energy that had underperformed during the first half of the year.

Paul Christopher, Wells Fargo Investment Institute’s head of global investment strategy, urged caution given the potential for a weaker economy, slower disinflation, and narrower corporate profits.

“This year’s impressive equity rally has been driven by strong sentiment, without either the earnings growth or the directional improvement in economic data to justify current market multiples and valuations,” Christopher wrote in a note on Monday.

The Bank of England is widely expected to raise rates by at least a quarter point, but markets are more divided on whether the Reserve Bank of Australia will hike or stay on hold.

Traders cut bets on a continuing rally in the pound by the most since mid-June ahead of the Bank of England rate decision on Thursday.

Sterling has surged 24% from a record low of $1.033 against the dollar in September after a disastrous budget, hitting a 15-month high of $1.314 in mid-July.

The euro was little changed at $1.101, as was the dollar index , staying largely flat at $101.650.

The Japanese yen weakened about 0.6% versus the dollar . Investors continued to digest Friday’s decision by the Bank of Japan (BOJ) to lift the lid on bond yields, in a step away from its ultra-easy policies.

Analysts at BofA estimate the BOJ’s bond buying added $1.3 trillion to global liquidity in the past 18 months and provided a low floor for global rates, so any sustained rise in Japanese government bond yields could ripple though other bond markets.

Japanese 10-year yields surged to a nine-year high up to 0.6% on Monday, and toward the new cap of 1.0%. That also put upward pressure on U.S. Treasury yields, where the 10-year was down 2.2 basis points at 3.949%.

In commodities, spot gold added 0.5% to $1,968 an ounce, but still off from its 2023 peak in May above $2,000.

Oil prices were set to post their biggest monthly gains in more than a year on Monday, on expectations that Saudi Arabia will extend voluntary output cuts into September and tighten global supply. U.S. crude rose 0.71% to $81.15 per barrel and Brent was at $85.39, up 0.47% on the day.

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U.S. stock index futures edged up on Monday with key benchmarks on track to end July higher, while investors awaited quarterly earnings from more megacap companies and a crucial employment report later this week.

All three main U.S. indexes ended last week higher as signs of cooling inflation and a resilient economy cemented investor bets on a soft landing for the country.

Upbeat quarterly earnings from megacap growth companies such as Alphabet (GOOGL.O), Meta Platforms (META.O) as well as chipmakers Intel (INTC.O) and Lam Research (LRCX.O) have also boosted investor sentiment.

Second-quarter earnings for S&P 500 companies are now estimated to have fallen 6.4% year-over-year, according to Refinitiv data. While still negative, the forecast is an improvement from the 7.9% drop estimated a week ago.

The blue-chip Dow (.DJI) logged its longest winning streak in nearly four-decades this month, underpinned by gains in sectors including healthcare, financials and energy that had underperformed during the first half of the year.

“Markets are growing increasingly confident that we are approaching the end of the current rate-hike cycle and that a soft landing can be delivered,” said Joshua Warner, market analyst at City Index.

“However, the future path of interest rates and the outlook for earnings both remain at the behest of macroeconomic conditions and data will remain key.”

Investors will parse remarks by Chicago Fed President Austan Goolsbee, a voting member of the Federal Open Market Committee, due later in the day.

Citigroup raised its 2023-end and mid-2024 S&P 500 targets to 4,600 and 5,000, respectively, to reflect a higher possibility of a soft landing. The benchmark index closed at 4,582 on Friday.

Investors await quarterly reports from Apple (AAPL.O), Amazon.com (AMZN.O) and AMD (AMD.O) later this week, while July ISM Manufacturing reading and three sets of employment data, including July’s non-farm payrolls are also in focus.

At 07:00 a.m. ET, Dow e-minis were up 44 points, or 0.12%, S&P 500 e-minis were up 4.5 points, or 0.1%, and Nasdaq 100 e-minis were up 2.5 points, or 0.02%.

Financial services provider SoFi Technologies (SOFI.O) gained 7.2% in premarket trading on reporting better-than-expected quarterly revenue.

Chipmaker ON Semiconductor (ON.O) added 2.2% ahead of its second-quarter results.

Johnson & Johnson (JNJ.N) shed 1.4% after a U.S. judge shot down the drugmaker’s second attempt to resolve tens of thousands of lawsuits over its talc products.

Salesforce (CRM.N) eased 1.7% after Morgan Stanley cut the business software provider’s rating, while UPS (UPS.N) slid 1.3% on a downgrade from Credit Suisse.

China on Monday announced export controls on some drones and drone-related equipment, saying it wanted to safeguard “national security and interests” amid escalating tension with the United States over access to technology.

The restrictions on equipment including some drone engines, lasers, communication equipment and anti-drone systems would take effect on Sept. 1, the commerce ministry said.

The controls would also affect some consumer drones, and no civilian drones could be exported for military purposes, a ministry spokesperson said in a statement.

“China’s modest expansion of the scope of its drone control this time is an important measure to demonstrate our stance as a responsible major country, to implement global security initiatives, and maintain world peace,” the unidentified spokesperson said.

Authorities had notified relevant countries and regions, the spokesperson said.

China has a big drone manufacturing industry and exports to several markets including the U.S.

U.S. lawmakers have said that more than 50% of drones sold in the U.S. are made by Chinese-based company DJI, and they are the most popular drone used by public safety agencies.

DJI said on Monday it always strictly complied with and enforced laws and regulations of the countries or regions in which it operates, including China’s export control regulatory requirements.

“We have never designed and manufactured products and equipment for military use, nor have we ever marketed or sold our products for use in military conflicts or wars in any country,” the drone maker added.

A German retailer in March 2022 accused DJI of leaking data on Ukrainian military positions to Russia, which the company rejected as “utterly false”.

China’s commerce ministry said in April this year that U.S. and Western media were spreading “unfounded accusations” that it was exporting drones to the battlefield in Ukraine, adding the reports were an attempt to “smear” Chinese firms and it would continue to strengthen export controls on drones.

The drone export curbs come after China announced export controls of some metals widely used in chipmaking last month, following moves by the United States to restrict China’s access to key technologies, such as chipmaking equipment.

The death toll in a suicide bombing of a political rally by a religious group allied to Pakistan’s government rose to 45 on Monday, compounding security concerns in the runup to a general election in November.

The bomber attacked Sunday’s gathering of the conservative Jamiat Ulema Islam-Fazl (JUI-F) party, which is known for its links to hardline Islamists but which condemns militants seeking to overthrow the Pakistani government.

Metal chairs and tables were strewn in piles at the scene of the explosion in the Bajaur district in the northwest, near the border with Afghanistan. No one has claimed responsibility. Police said the Islamic State group was suspected.

An official at a state-run rescue agency, Bilal Faizi, said the death toll had risen to 45. Of more than 130 wounded people, 61 were under treatment, said government health adviser Riaz Anwar.

Prime Minister Shehbaz Sharif denounced Sunday’s blast as an attack on the democratic process. Prospects for the general election have already been clouded by months of rivalry between main parties and accusations of military involvement in civilian politics, which the military denies.

“A justification for postponing the election can strengthen if a series of such attacks continue to happen,” Pakistan’s former counter-terrorism chief Khawaja Khalid Farooq told Reuters. “Such targeted attacks may affect the performance and electioneering campaign of affected political parties.”

Pakistan has seen a resurgence of attacks by Islamist militants since last year when a ceasefire between the Pakistani Taliban, the Tehreek-e-Taliban Pakistan (TTP) and the government broke down.

A mosque bombing claimed by a TTP splinter group in Peshawar killed more than 100 people in January. Nevertheless, Sunday’s attack was the deadliest to target a political rally since an election campaign in 2018.

While the TTP and associated groups have been behind most of the attacks in recent months, the group distanced itself from Sunday’s attack, with a spokesman condemning it.

The JUI and its chief Maulana Fazl-ur-Rehman have been attacked in the past over their opposition to Pakistani Islamist militants, whose armed campaign against the state they say does not constitute a legitimate Jihad – a fight against opponents of Islam. The party nevertheless supports the Taliban movement in neighbouring Afghanistan.