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Futures

U.S. Stock Futures and Corporate News Amidst Fed's Inflation Gauge

2024-11-26

On Tuesday night, U.S. stock futures showed only minor changes as traders eagerly await the release of the Federal Reserve's preferred inflation gauge. Futures linked to the Dow Jones Industrial Average saw an increase of 24 points, equivalent to 0.05%. Meanwhile, S&P 500 futures hovered near the flatline, and Nasdaq-100 futures declined by 0.06%. In the corporate world, several companies disclosed their quarterly results. Dell Technologies experienced a significant drop of 11% in extended trading due to a disappointing forecast for the current quarter. The company reported $24.37 billion in revenue for the fiscal third quarter, which was lower than the $24.67 billion expected by analysts. However, adjusted earnings surpassed Wall Street's expectations.Looking ahead to Wednesday, the personal consumption expenditures price index (PCE) is scheduled for release at 10:00 a.m. ET. Economists polled by Dow Jones anticipate a year-over-year increase of 2.8% for the core reading, which excludes food and energy. Investors will closely examine the data to gain insights into the Fed's rate policy decisions at its December meeting.Indeed, the Fed released the minutes from its November meeting on Tuesday. Central bank officials indicated that they expect more interest rate cuts in the future but emphasized that the pace of cuts will be gradual. Stephen Stanley, Santander U.S. Capital Markets chief U.S. economist, told CNBC's "Power Lunch" that he believes the Fed will cut rates again in December. He believes that the Fed still has some distance to reach neutral and wants to make further progress on rate adjustments.Other important data to be released on Wednesday includes personal income and consumer spending for October, which is also scheduled at 10:00 a.m. ET.This is a shortened trading week in the U.S., with the market closed on Thanksgiving Day on Thursday and set to close early on Friday. Trading volume is expected to remain relatively low. Despite this, stocks ended the day in the green across the three major averages. Both the S&P 500 and the Dow reached new intraday and closing highs.The Russell 2000 had a less-than-stellar session on Tuesday as it ended a six-day winning streak. The small-cap index lagged behind the three major averages, falling by about 0.7%, while the S&P 500 and the Dow Jones Industrial Average reached new record closes. However, the Russell 2000 is having a strong November as investors have been buying cyclical stocks since Donald Trump won a second term in the White House earlier this month. The Russell is on track for a 10.4% increase this month, outperforming the 5.5% gain of the S&P 500 and the 7.4% jump of the Dow.Some stocks are making significant moves in extended trading. Dell Technologies' stock tumbled more than 10% after reporting weaker-than-expected revenue for the fiscal third quarter. HP's shares slid 7% after providing weaker-than-expected earnings guidance for its fiscal 2025 first quarter. Workday's stock also dropped 10% after announcing that its subscription revenues and operating margin for the fourth quarter will be lower than expected.Stock futures opened with little change on Tuesday evening. Futures tied to the Dow Jones Industrial Average gained 20 points, or 0.04%. S&P 500 futures also rose by 0.04%, while Nasdaq-100 futures fell by 0.03%.For more information and the full list of stock movements, please read here.

Digital currencies issued by local governments in Japan have become a hotbed for phishing scams. These scams take advantage of reward programs and have exposed significant vulnerabilities in the system. The Japan Times has been closely following these cases and the subsequent calls for stronger security measures.

Uncover the Hidden Dangers of Japan's Local Digital Currencies

Osaka's Fraud Case: A Closer Look

Police in Osaka recently made a significant arrest. Seven Vietnamese nationals were accused of using stolen credit card information to fraudulently obtain "machikane points," a regional digital currency used in Toyonaka City. These suspects exploited the currency's premium reward system, which offered up to ¥2,500 (around $345) for purchases of ¥50,000 (~$6,900). By using the same credit card across multiple accounts, they managed to amass nearly half a million dollars in fraudulent premiums in just two days. Investigators suspect the involvement of additional individuals, highlighting the widespread nature of this problem.This case is not an isolated incident. Similar scams have surfaced elsewhere, such as in Kumagaya, Saitama Prefecture, where the local Kuma Pay currency was targeted. Nationwide, several municipalities have reported incidents, although some have been reluctant to disclose details. This shows the need for greater transparency and cooperation in addressing these issues.The popularity of digital regional currencies, designed to boost local economies, has surged in recent years. According to data from Senshu University, the number of municipalities issuing such currencies jumped from 32 in 2019 to 219 in 2023. However, experts warn that phishing groups "tend to target newly introduced digital currencies." This highlights the need for municipalities to be vigilant and take proactive measures to protect their citizens and their economies.Authorities are urging municipalities to strengthen identity verification protocols and limit the use of credit cards to those registered under the purchaser's name. While these measures are important, some officials argue that phishing-related theft is difficult to prevent entirely. This highlights the complexity of the issue and the need for a multi-faceted approach to addressing phishing scams in the digital currency space.

Saitama's Kuma Pay Currency: Under Attack

In Kumagaya, Saitama Prefecture, the local Kuma Pay currency became a target for phishing scams. The modus operandi was similar to that in Osaka, with fraudsters using stolen credit card information to obtain rewards. This shows that phishing groups are not limited to specific regions or currencies and are constantly on the lookout for new opportunities.The surge in the popularity of digital regional currencies has also led to an increase in the number of phishing attempts. As more municipalities issue these currencies, the risk of fraud also increases. This highlights the need for municipalities to work together and share information to combat phishing scams effectively.Authorities are working hard to address these issues, but the battle against phishing scams in the digital currency space is far from over. There is a need for continuous education and awareness campaigns to help citizens protect themselves from these scams. Additionally, technological solutions need to be developed to enhance security and prevent fraud.In conclusion, the issue of phishing scams in Japan's local government digital currencies is a serious one that requires the attention and cooperation of all stakeholders. By strengthening security measures and working together, we can help protect our local economies and citizens from the harmful effects of phishing scams.

UBS has taken a significant step in the financial world by rolling out UBS Digital Cash, a blockchain-based system designed specifically for commercial and institutional customers. This innovative payment solution aims to revolutionize the way transactions are conducted, offering enhanced efficiency and security.

Unlock the Potential of Blockchain in Payments

Enhanced Efficiency through Blockchain Technology

The Swiss bank's UBS Digital Cash system leverages blockchain technology to eliminate the need for traditional intermediaries. Smart contracts, embedded directly into the code, ensure compliance checks are carried out automatically. This not only increases operational efficiency but also addresses the long-standing inefficiencies in cross-border payments. By automating processes such as clearing, settlement, and fund transfers, UBS offers real-time payments that bypass regulatory intermediaries, reducing costs and delays. For example, in traditional systems, the settlement and transfer of funds could take hours or even days. With UBS Digital Cash, this happens in near real-time, providing corporate and institutional clients with a clear picture of their current liquidity.

Transparent and Immutable Blockchain Ledger

One of the major benefits of UBS Digital Cash is the transparent and immutable nature of the blockchain ledger. Once transaction data is recorded, it becomes extremely difficult to change, enhancing system integrity even in the face of potential cyberattacks. Each entry in the ledger contains information about all previous entries, and the maintenance of the ledger is decentralized. This makes fraudulent activity much more difficult, as there is no central point of control. Greater transparency generates greater trust in the system, which is crucial when moving large sums of money around the world.

Impact on Banks and Financial Institutions

This innovation is most impactful for banks and financial institutions. They are subject to strict liquidity constraints that limit their lending capacity. By increasing liquidity through UBS Digital Cash, banks' willingness and ability to lend are enhanced. Although UBS is a large bank and may not have a significant impact on macroeconomic variables on its own, if other financial institutions follow suit and invest in this technology, it could lead to an effective increase in the money supply. GlobalData's Payment Instrument Analytics shows that the volume of instant payments in Switzerland has risen 21-fold over the last five years, and the total value of instant payments transactions is forecast to increase from $2bn in 2019 to $376bn in 2028. This indicates the high value consumers and businesses place on the efficiency benefits of these payment channels.

Potential Unintended Consequences

While UBS Digital Cash holds great promise, it also presents potential unintended consequences. These include inflationary pressures, increased economic activity, and increased levels of bank risk. In the coming years, governments and central banks will need to carefully consider fiscal and monetary policies to address these effects. Additionally, regulation around this new technology needs to be strengthened. Although identity and legitimacy checks are in place before institutions are granted access to the private blockchain, transactions are not subject to the same level of scrutiny as traditional payment channels. The transparency of the blockchain mitigates the likelihood of fraud, but suspicious or irregular transactions can still occur. UBS Digital Cash exemplifies the transformative potential of blockchain in monetizing payments, but its success and broader adoption depend on addressing these regulatory gaps and managing systemic risks.