Regulatory crackdown continues

Over the weekend, the Financial Conduct Authority, the U.K.'s financial regulator, barred Binance Markets from Britain. It's one of the most noteworthy moves by a Western regulator to date and follows a recent crackdown on crypto mining in China and elsewhere. Binance Markets is an affiliate of the world's largest cryptocurrency exchange Binance, but is no longer "permitted to undertake any regulated activity in the U.K."

The concerns: In January, the FCA has required all crypto-related services to register and show that they meet anti-money laundering standards. Since then, just five companies have registered and the majority of them are still not yet compliant. A statement from the FCA also included a warning about crypto volatility. "Be wary of adverts online and on social media promising high returns on investments in cryptoasset or cryptoasset-related products."

Binance Markets must also remove its advertising and make clear on its website and social media that it's no longer permitted to operate in the U.K. Bitcoin (BTC-USD) has turned higher since the news, rising 5.5% over the past 24 hours to $34,480. While the bans could make it harder for the currency to achieve widespread adoption, they could also increase crypto demand for the exact same reason. DeFi revolution?

Save the date: In an interesting conversation taking place over Twitter, Elon Musk and Jack Dorsey agreed to discuss Bitcoin with each other at a cryptocurrency event on July 21. The gathering, called The B Word, offers a "live experience and a library of content to the investor community, enabling a more informed discussion about the role Bitcoin can serve for institutions across the globe." Dorsey has also said it will "help protect and spread what makes #bitcoin open development so perfect." (156 comments)

Little changed

The major averages are hovering close to record highs after the S&P 500 notched its largest weekly advance since February. Traders appear to be growing more confident that U.S. inflation trends are not a sustained economic threat or may be disregarding the concerns altogether. At the time of writing, Dow futures are down 0.1%, while contracts linked to the S&P 500 and Nasdaq were 0.1% and 0.2% higher, respectively.

Bigger picture: Some market participants expect a quiet week ahead of the latest jobs snapshot on Friday. The report, expected to show the economy adding 683,000 jobs in June, is the next piece of data that could shed light on wage inflation and the worker shortage as pandemic-era unemployment benefits taper off in some states. Trading volumes could also be lower in the coming sessions, with many traders taking an early vacation ahead of the July 4 holiday weekend.

On the infrastructure front, President Biden walked back (clarified) a declaration made last week that he would refuse to sign the latest $579B bipartisan bill if it didn't come with a reconciliation package. As opposed to the first measure that's focused on physical infrastructure, the second bill would include funding for issues like childcare, healthcare and climate change, or what administration officials have called "human infrastructure." The latter would be passed through a Senate process called reconciliation, which doesn't require Republican votes.

Analyst commentary: "The bipartisan infrastructure agreement hammered out in Washington, D.C., last week appears to stand some chance of becoming a reality," wrote John Stoltzfus, chief investment strategist at Oppenheimer Asset Management. "This program could serve the country near and longer term in generating job creation, boost economic growth, underpin corporate revenue and earnings growth and increase the ability of the US to compete with other nations in the still relatively new but hypercompetitive 21st Century."

Opioid pullback

Johnson & Johnson (JNJ) has agreed to stop selling opioid medications across the country as part of a nearly $230M settlement with New York over the company's alleged role in contributing to the nation's opioid crisis. Payments to the state would be made over nine years. In addition, J&J would have to pay an additional $30M in the first year if Gov. Andrew Cuomo signs into law a bill that was approved by the New York legislature creating an opioid settlement fund.

Quote: "The opioid epidemic has wreaked havoc on countless communities across New York state and the rest of the nation, leaving millions still addicted to dangerous and deadly opioids," said New York Attorney General Letitia James. "Johnson & Johnson helped fuel this fire, but today they're committing to leaving the opioid business - not only in New York, but across the entire country."

Under terms of the deal, J&J is prohibited from promoting opioids through sales representatives and disciplining those reps for not meeting sales quotas. The company is also prohibited from lobbying lawmakers on opioids at the federal, state or local levels. J&J opioid products are manufactured by the company's Janssen division and include Duragesic (fentanyl patch) and Nucynta (tapentadol), though J&J says both are no longer sold in the U.S.

Fine print: The agreement removes Johnson & Johnson from a trial involving opioid manufacturing and distribution set to begin tomorrow in Long Island, N.Y. While that lawsuit involves Teva Pharmaceutical (TEVA), McKesson (MCK), and Walgreens (WBA), J&J still faces similar cases in other states. The latest settlement "is not an admission of liability or wrongdoing by the company," according to J&J, but is rather consistent with a prior agreement from October 2020 that includes an all-in settlement of $5B to resolve opioid claims from "states, cities, counties and tribal governments." (108 comments)

Paving the EV future

The European Commission is discussing a zero-emissions target for cars sold beyond 2035, according to a new report from Politico. "That would not only mean the end of the internal combustion engine, but also the end of plug-in hybrids," explained Hildegard Müller, head of Germany's VDA car lobby. It would also force the EV revolution upon European automakers, though some are already planning moves of their own.

Start your electric motors! Germany's Volkswagen (OTCPK:VWAGY) just announced it will stop selling combustion engine cars in Europe by 2035 and aims for the region's electric cars to account for 70% of total sales by 2030. Ceasing sales of ICE vehicles in the United States and China will occur "somewhat later," according to VW board member Klaus Zellmer, and by 2050 - at the latest - the entire fleet should be carbon neutral. "South America and Africa will take a good deal longer due to the fact that the political and infrastructure framework conditions are still missing."

Volkswagen isn't the only carmaker getting serious about emissions targets. Ford (NYSE:F) has already said it will only sell EVs in Europe by 2030, Volvo (OTCPK:GELYF) is retiring the ICE automobile and hybrids by the same year and Honda (NYSE:HMC) announced plans to phase out gas-powered cars by 2040. Meanwhile, Stellantis (NYSE:STLA) is no longer planning to invest in the development of new internal combustion engines, while General Motors (NYSE:GM) will stop building polluting vehicles by 2035. Some seem not as prepared, like VW's German rivals - Daimler (OTCPK:DDAIF) and BMW (OTCPK:BAMXF).

Go deeper: Countries and cities are also revving up their green goals when it comes to EVs. The U.K. plans to end the sale of ICE vehicles by 2030 and plug-in hybrids by 2035, France has set a 2040 phase-out date, while Norway is the most ambitious nation with a 2025 deadline. Over in the U.S., California has banned the sale of gas-powered vehicles by 2035 and a dozen other states are looking at similar legislation. (130 comments)

Today's Markets

In Asia, Japan -0.1%. Hong Kong flat. China flat. India -0.3%.
In Europe, at midday, London -0.5%. Paris -0.4%. Frankfurt -0.1%.
Futures at 6:20, Dow -0.1%. S&P +0.1%. Nasdaq +0.2%. Crude +0.1% at $74.13. Gold -0.1% at $1776.70. Bitcoin +5.5% at $34480.
Ten-year Treasury Yield -2 bps to 1.52%

Today's Economic Calendar

9:00 Fed's Williams Speech
10:30 Dallas Fed Manufacturing Survey
11:00 Fed's Harker Speech Outlook
1:10 PM Fed’s Quarles Speech