US SEC cracks down on Binance and Coinbase

The S&P 500 advanced modestly on Tuesday to its highest close since 2023 began as Wall Street digested a recent rally that led the broad index to its highest level in nine months.

The S&P 500 added 0.24 per cent, trading near a nine-month high, to finish at 4,283.85 — also the highest close dating back to August 2022. The Nasdaq Composite climbed 0.36 per cent to end at 13,276.42. The Dow Jones Industrial Average eked out a narrow gain of 0.03 per cent, or 10.42 points, to close at 33,573.28, as losses of more than 2 per cent in Merck and UnitedHealth weighed on the blue-chip average.

In company news, Coinbase dropped more than 12 per cent after the Securities and Exchange Commission sued the crypto company. The SEC alleged Coinbase was acting as an unregistered broker and exchange. Bitcoin rose more than 6 per cent, according to CoinMetrics.

This comes a day after traders moved more than $800mn out of Binance in the 24 hours after the crypto exchange was sued by the US securities regulator.

The SEC alleged that Binance had committed multiple violations of securities laws, including mixing customer assets, operating an unregistered securities exchange and offering unregistered securities. On Tuesday, the agency announced a lawsuit against Coinbase, another large crypto exchange.

The flight underscores the jitters among traders as US authorities try to clamp down on illicit domestic crypto market activity.

Apple shares shed 0.2 per cent, a day after the tech giant debuted its highly anticipated virtual reality headset as well as new software at its annual Worldwide Developer Conference. In the previous session, the stock hit an all-time high ahead of the announcement.

Ford Motor is nearing an agreement to sell a plant in Germany, with two groups of Chinese carmakers among the three leading bidders at a time when Chinese investments in Europe are under growing scrutiny.

One of the bids comes from BYD Co., the largest domestic automaker in China, while another involves several smaller Chinese car companies, according to people familiar with the situation.

The US carmaker and the German state of Saarland, home to the plant, are also in talks with a German solar component maker.

Friday saw the largest Russell vs NDX ( Nasdaq 100) outperformance in two years. In addition, BofA said in its latest Systematic Flows Monitor that CTAs were covering their outlier short position in the Russell in recent days, with the pace of unwinds set to pick up this week.

Saudi Arabia is set to pump billions of dollars into the world’s biggest professional golf organisation to seal a stunning merger between its breakaway LIV Golf and the US-based PGA Tour. The merger, which some people involved said could amount to about $3bn, underscores how Saudi Arabia has muscled into global sports through its use of oil-funded state finances.

Overall, most US sectors closed mostly higher overnight. Financials was the best performer, whilst Health was the worst.

Futures

The SPI futures are pointing to a 0.3 per cent rise

Currency

One Australian dollar at 7:20 AM is buying 66.72 US cents.

Commodities

Iron ore futures are pointing to a 0.19 per cent gain.

Gold added 0.36 per cent. Silver rose 0.15 per cent. Copper was flat and oil lost 0.57 per cent.

Figures around the globe

Across the Atlantic, European markets closed higher. London’s FTSE added 0.37 per cent, Frankfurt rose 0.18 per cent while Paris closed 0.11 per cent higher.

In Asian markets, Tokyo’s Nikkei gained 0.90 per cent, Hong Kong’s Hang Seng fell 0.05 per cent while China’s Shanghai Composite closed 1.15 per cent lower.

Yesterday, the Australian sharemarket closed 1.2 per cent lower at 7130.

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.

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