World Street | Jamie Dimon flags stagflation; US to shift to T+1 settlement; SEC approves Ether ETFs, SpaceX considers share sale, and more

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JPMorgan CEO Jamie Dimon warned of potential US "hard landing" and stagflation. Nvidia's stock soared past $1,000. The SEC approved ETFs for Ether. US trading to shift to T+1 settlement from May 28 to reduce risk, though may initially increase transaction failures. SpaceX is considering a share sale, valuing it at $200 billion. All this and more on this edition of World Street.

JPMorgan Chase’s chairman and CEO, Jamie Dimon, says a “hard landing” for the US cannot be ruled out. Speaking at the JPMorgan Global China Summit in Shanghai, Dimon said the worst outcome for the US economy will be a “stagflation” scenario, where inflation continues to rise, but growth slows amid high unemployment. He said interest rates could still go up “a little bit.”

Nvidia stock surged over 9 percent to close above $1,000 for the first time, giving the chip giant a market cap north of $2.5 trillion after the first-quarter earnings once again blew away forecasts.

CNBC’s Jim Cramer thinks it’s unwise to trade Nvidia and that investors should keep the AI darling. “Until the AI revolution runs on something else, you should just own it, do not trade it,” he said.

“Just don’t sell it on a moment’s notice. In fact, don’t sell it at all unless you need to do some profit-taking to even out your portfolio because it’s just become too large," Cramer said.

The U.S. Securities and Exchange Commission (SEC) has approved a rule change that would pave the way for ETFs that buy and hold ether, one of the world’s largest cryptocurrencies. The decision comes less than six months after the SEC approved bitcoin ETFs.

Many of the companies that sponsor bitcoin ETFs including BlackRock, Bitwise, and Galaxy Digital have started the process of launching an ether fund.

US trading moves to a shorter settlement commonly called T+1 settlement, which regulators hope will reduce risk and improve efficiency in the world's largest markets, but is expected to temporarily increase transaction failure for investors. To comply with a rule change, investors in US equities, corporate and municipal bonds, and other securities must settle their transactions one business day after the trade instead of two as of May 28.

Canada, Mexico, and Argentina will speed up their market transactions a day earlier, on Monday. The UK is expected to follow in 2027, and Europe is considering the change. Regulators sought T+1 settlement after the 2021 trading frenzy around the "meme stock" GameStop highlighted the need to reduce counterparty risk and improve capital efficiency and liquidity in securities transactions.

The US House of Representatives has passed a bill to ban the US Fed from creating a central bank digital currency, the 'digital dollar', Forbes reported. The decision was proposed by Tom Emmer, the House majority whip, saying the "CBDC Anti-Surveillance State Act" is an important amendment to the US Federal Reserve Act.

The amendment states, "The Board of Governors of the Federal Reserve System and the Federal Open Market Committee may not use any central bank digital currency to implement monetary policy." Three Democrats joined all Republicans in giving their nod for the bill. However, it still has a pretty long way before it becomes law as the Senate has to pass a vote, and it potentially may stand a presidential veto, the report said.

China’s efforts to bolster economic growth by reducing the allure of bank deposits have driven a record exodus from cash, with a big proportion of that going into bonds and wealth management products, reported Bloomberg.

The Asian nation’s total deposits slumped by 3.9 trillion yuan ($538 billion), or 1.3 percent in April as investors looked for higher returns elsewhere and policymakers cracked down on companies that took advantage of preferential deposit rates to park cash at banks.

Boeing will burn rather than generate cash this year, and deliveries will not increase in the second quarter of 2024, the company's finance chief said on Thursday, as the U.S. planemaker grapples with a crisis that is pinching production of its strongest-selling aircraft.

CFO Brian West told the Wolfe Research Global Transportation and Industrials Conference that he expects Boeing's full-year free cash flow to be negative, due partly to the delays in deliveries, compared with March's outlook for positive cash generation in the low single-digit billions, reported Reuters.

Elon Musk’s SpaceX has initiated discussions about selling existing shares at a price that could value the closely held company at roughly $200 billion, reported Bloomberg, citing sources. SpaceX is discussing a tender offer, a transaction that enables employees and insiders like investors to sell shares, that may kick off in June.

The price for the upcoming tender offer hasn’t been decided but SpaceX is weighing offering shares at $108 to $110 apiece, the report stated.