Thursday's Markets Update (October 19, 2023)

20 Oct 2023 by rate3

On Thursday, jobless claims decreased and Nasdaq as well as the rest of Wall Street stocks fell as investors weighed Fed Chair Powell's comments on that the resilience of the economy suggests that neutral interest rates may have shifted higher. Netflix surged on strong subscriber growth, while Tesla and Blackstone dropped sharply on weak earnings and concerns about high rates. Meanwhile, BTC and ETH continued their sideway drift on low volumes. Other news: California's governor has signed the Digital Financial Assets Law, which is mostly analogous to the infamous New York's "BitLicense".

Details

Jobless claims fell to their lowest level since January 2023, pointing to a strong labor market that is resilient to the Fed's interest rate hikes. Continuing claims, which measure the number of people receiving unemployment benefits, rose slightly, suggesting unemployed individuals are taking longer to find work.

The Philadelphia Fed Manufacturing Index increased to -9 in October 2023, suggesting slow growth in the manufacturing sector. New orders, shipments, employment, prices paid, and prices received were all positive, but most future indicators declined.

Crypto

California's governor has signed the Assembly Bill (AB) 2269 or Digital Financial Assets Law, establishing a cumbersome regulatory framework, mostly analogous to the infamous New York's "BitLicense", for the state's crypto industry. The bill, which will come into effect in 2025, has drawn negative reactions from local industry players.

The following activities require a license under the California Digital Financial Assets Law:

Exchanging, transferring, or storing digital financial assets.
Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person, or issuing shares or electronic certificates representing interests in precious metals.
Exchanging digital representations of value used within online games for digital financial assets, legal tender, or bank or credit union credit outside the online game.
Comment

This law is stupid and detrimental to the development of the industry despite that there are some allowances. The bill exempts some types of services and targets entities, whose activities are reasonably valued to be in excess of $50K. This allows some minor flexibility for micro-startups and very small players.