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(Bloomberg) — It’s a day ending in Y, which means we’re going to talk about crypto hacks. In October alone, hacks, attacks and clever exploits (more about those in a moment) cost the crypto industry an estimated $700 million.  Now when we talk about hacks, you might (correctly) picture sophisticated state-sponsored groups like North Korea’s Lazarus, or more run-of-the-mill attacks on Twitter or Instagram. But there’s another kind of exploit that’s raising eyebrows in crypto these days as it takes advantage of how platforms are supposed to work. 

It’s called a price-manipulation attack, and it’s what happened to a DeFi platform called Mango. The mastermind behind the exploit initially walked away with a cool $100 million.

To better understand what’s at stake for DeFi,  Bloomberg reporter Muyao Shen joins this episode. Also featured is Evgeny Gaevoy, CEO and founder of Wintermute, a trading platform that was itself hacked for $160 million back in September. 

Follow us on Twitter @crypto, and subscribe to the Bloomberg Crypto Newsletter at https://bloom.bg/cryptonewsletterThis podcast is produced by the Bloomberg Crypto Podcast team: Supervising producer: Vicki Vergolina, Senior Producer: Janet Babin, Producers: Sharon Beriro and Muhammad Farouk, Associate Producers: Mo Andam and Ty Butler. Sound Design/Engineer:  Desta Wondirad.

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(Bloomberg) — The Japan arm of Sam Bankman-Fried’s failed digital-asset exchange is studying whether the FTX bankruptcy filing might affect its ability to return crypto to local clients.

FTX Japan K.K. is in discussions with lawyers about the implications of the collapse of its parent entity and plans to make an announcement once the situation becomes clearer, a spokesman said. The nation’s financial watchdog last week ordered FTX Japan to suspend some of its operations while requiring it to ensure the safety of clients assets. 

• Read more: FTX.com Assets Frozen by Bahamas as Crisis Engulfs Empire

The sudden collapse of Bankman-Fried’s crypto empire sent shock waves through markets and raised questions about the appropriateness of existing crypto regulations. In Japan, authorities have been moving to loosen rules governing the crypto industry in a quest to spur search of economic growth. 

• Read more: Lawmaker Behind Japan Crypto Strategy Says Rules Still Too Tight

FTX Japan K.K. released details of its holdings on Monday, joining other exchanges around the world who are attempting to shore up investor confidence by sharing snapshots of their assets and reserves. In a recent thread on Twitter, Crypto.com CEO Kris Marszalek called on the industry to demonstrate a “full and collective commitment” to transparency and to the safety and security of users and funds.

According to the release, which shows a snapshot as of Nov. 11, the Japanese unit’s so-called cold wallets held crypto assets in excess of client assets. Those customers had exposure to 14 different tokens, including Bitcoin Cash and Ripple’s XRP. The amounts held in the wallets should have changed little since, the spokesman said. 

FTX Japan had around 19.6 billion yen ($140 million) in cash and deposits as of Nov. 10, according to the release. It also held 10 billion yen or so in net assets at the end of September, it said. The company has suspended customer withdrawals.

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(Bloomberg) — Klarna’s chief executive officer is worried that the collapse of FTX.com may encourage finance sector regulation that will make it harder for fintech firms to compete against traditional lenders. 

Describing the blowup as “fairly scary,” Sebastian Siemiatkowski, who has previously criticized the crypto industry, said he’s more worried “the traditional bank industry will take this opportunity to again regulate this industry to the disadvantage of consumers.” 

“We need more competition in banking industry, we need good consumer protection laws but that don’t stifle competition,” he said on Bloomberg Television Monday. “I’m a little bit concerned that these debacles that we’ve seen will again inhibit that and continuously prolong the overly large profitability that we’ve seen in the banking industry.”

His comments show how the bankruptcy of Sam Bankman-Fried’s digital-asset exchange is reverberating through the wider world of finance, even as any market contagion remains restricted to the world of crypto.

Siemiatkowski also said consumers were increasingly buying cheaper goods as the economic turmoil hits consumer confidence. He was speaking after Klarna rolled out a price comparison tool in the UK, part of a push to supply the fintech with additional revenue streams.

–With assistance from Agatha Cantrill.

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(Bloomberg) — Equity futures struggled for direction at the start of the week as a cautious tone from a Fed speaker tempered ebullience that inflation may have peaked.

US stock futures declined Monday while a European benchmark ticked higher, lifted by miners and automakers. Contracts on the S&P 500 fell 0.2% while those on the Nasdaq 100 slipped 0.4%. Asian equities erased earlier gains, dragged down by Japanese shares. 

Treasury yields advance and the dollar flipped to a gain after weekend comments from Federal Reserve Governor Christopher Waller that policymakers had “a ways to go” before ending interest-rate hikes.

Some of the world’s largest money managers are clinging to risk-off positioning against the threat of entrenched inflation, even if price pressures ebb. JPMorgan Asset Management has a record allocation in cash in at least one of its strategies while a hedge fund solutions team at UBS Group AG is staying defensive.

“Markets have been reading too much into one data print, US inflation has slowed but it’s not slow,” said Salman Ahmed, chief investment strategist at Fidelity International. “The Fed will need more data to reassess the end point for rates.”

Read more: Wall Street Managers Are Pushing Back on Easing Inflation Hopes

Signs of cooling in US inflation and the prospects of a dovish tilt by the Fed had propelled the S&P 500 to its best week since June and sapped dollar strength. The University of Michigan’s preliminary November survey on Friday showed US consumer inflation expectations increased in the short and long run while sentiment retreated.

To be sure, while Waller said the hiking cycle would continue for some time, he noted that the Fed could start considering a downshift to a 50 basis-point move at the next meeting in December or the one after that.

Investors will also keep a wary eye on the Group of 20 summit in Indonesia, where US President Joe Biden and Chinese leader Xi are expected to meet. Biden’s hand has been strengthened by the Democrats defying political forecasts and historical trends to keep control of the Senate.

Chinese developers’ shares and dollar bonds extended a rally Monday, driven by Beijing’s property rescue measures and as easing Covid controls raise hopes that the worst may be over. 

Cryptocurrencies fluctuated while the sector remained under pressure amid FTX’s deepening woes. A swift plunge in the value of FTX’s key crypto assets and unauthorized withdrawals of funds after it filed for bankruptcy suggest customers have little chance of recovering much of their deposits. 

Oil dipped after a two-day rally as a stronger dollar offset optimism around the outlook for improved Chinese demand. Gold declined. 

Key events this week:

• US President Joe Biden plans to meet Chinese President Xi Jinping on the sidelines of the G-20, Monday
• Fed’s John Williams moderates panel, Monday
• China retail sales, industrial production, surveyed jobless, Tuesday
• Former US President Donald Trump plans to make an announcement, Tuesday
• US empire manufacturing, PPI, Tuesday
• US business inventories, cross-border investment, retail sales, industrial production, Wednesday
• Fed’s John Williams, Lael Brainard and SEC Chair Gary Gensler speak, Wednesday
• ECB President Christine Lagarde speaks, Wednesday
• Eurozone CPI, Thursday
• US housing starts, initial jobless claims, Thursday
• Fed’s Neel Kashkari, Loretta Mester speak, Thursday
• US Conference Board leading index, existing home sales, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.4% as of 8:21 a.m. London time
• Futures on the S&P 500 fell 0.2%
• Futures on the Nasdaq 100 fell 0.4%
• Futures on the Dow Jones Industrial Average were little changed
• The MSCI Asia Pacific Index rose 0.1%
• The MSCI Emerging Markets Index rose 0.6%

Currencies

• The Bloomberg Dollar Spot Index rose 0.1%
• The euro was little changed at $1.0345
• The Japanese yen fell 0.5% to 139.46 per dollar
• The offshore yuan rose 0.9% to 7.0285 per dollar
• The British pound fell 0.2% to $1.1812

Cryptocurrencies

• Bitcoin rose 2.8% to $16,831.24
• Ether rose 4% to $1,265.21

Bonds

• The yield on 10-year Treasuries advanced seven basis points to 3.89%
• Germany’s 10-year yield was little changed at 2.17%
• Britain’s 10-year yield advanced one basis point to 3.37%

Commodities

• Brent crude rose 0.4% to $96.41 a barrel
• Spot gold fell 0.4% to $1,764.40 an ounce

This story was produced with the assistance of Bloomberg Automation.

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(Bloomberg) — The distress spread across cryptocurrencies by the meltdown of Sam Bankman-Fried’s FTX is fracturing the link the tokens once had with other financial assets, a sign that Bitcoin’s influence on global markets may be diminishing.

Bitcoin dropped 23% last week, its worst tumble since June, at the same time as the S&P 500 Index soared 5.9%. That helped weaken the correlation between the two to the lowest this year, based on a 20-day study. The performance gap between Bitcoin and the Nasdaq has hit the widest since 2020. 

And while major cryptocurrencies turned higher Monday, the gains did little to lift broader market sentiment damped by comments from Federal Reserve Governor Christopher Waller that policymakers had “a ways to go” with interest-rate hikes.

“That idea of using crypto as a high-beta play on risk is fading, because there are easier ways to play that elsewhere that don’t suffer from the same systemic risk,” said Chris Weston, head of research at Pepperstone Group. “This is a structural issue, it’s about the actual architecture of the crypto system and the confidence you can have in that. Who’s next is the question on many people’s lips.”

The idea that Bitcoin can form a worthwhile part of a diversified portfolio of risk assets is fraying, with massive losses generated by the revelation that even FTX, until recently considered one of the most blue-chip names in crypto, was unsound. That’s a far cry from the optimism at the start of this year, when Bridgewater estimated that 5% of Bitcoin was held by institutional-level investors. 

The latest crypto rout came as investors were already souring on the space and as declines in prices shrank the footprint of virtual currencies. 

The total market value of all tokens has dropped more than 70% from a record peak of just under $3 trillion set a year ago, according to the CoinGecko website. The current worth of $843 billion, as assessed by the tracker, is now less than 1% of the world equities market. Stocks are down a still sizable 16% over the period but a resurgence of broad risk appetite, driven by hopes for a slower pace of central bank interest-rate hikes, sent equities up by more than $13 trillion since they bottomed out Oct. 12.

The stark contrast between sliding cryptocurrencies and ebullient stocks underscores how rapid the turnaround has been for an asset class that was close to winning over mainstream investors less than a year ago. 

Back in 2021 JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou wrote Bitcoin could theoretically reach $146,000 in the long term by crowding out gold — last week he said the current upheavals could send it as low as $13,000. A PWC survey in April found that 42% of crypto hedge funds were predicting Bitcoin to trade between $75,000 and $100,000 by the end of 2022. 

(Updates with latest market moves in third paragraph)

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(Bloomberg) — The distress spread across cryptocurrencies by the meltdown of Sam Bankman-Fried’s FTX is fracturing the link the tokens once had with other financial assets, a sign that Bitcoin’s influence on global markets may be diminishing.

Bitcoin dropped 23% last week, its worst tumble since June, at the same time as the S&P 500 Index soared 5.9%. That helped weaken the correlation between the two to the lowest this year, based on a 20-day study. The performance gap between Bitcoin and the Nasdaq has hit the widest since 2020. 

And while major cryptocurrencies turned higher Monday, the gains did little to lift broader market sentiment damped by comments from Federal Reserve Governor Christopher Waller that policymakers had “a ways to go” with interest-rate hikes.

“That idea of using crypto as a high-beta play on risk is fading, because there are easier ways to play that elsewhere that don’t suffer from the same systemic risk,” said Chris Weston, head of research at Pepperstone Group. “This is a structural issue, it’s about the actual architecture of the crypto system and the confidence you can have in that. Who’s next is the question on many people’s lips.”

The idea that Bitcoin can form a worthwhile part of a diversified portfolio of risk assets is fraying, with massive losses generated by the revelation that even FTX, until recently considered one of the most blue-chip names in crypto, was unsound. That’s a far cry from the optimism at the start of this year, when Bridgewater estimated that 5% of Bitcoin was held by institutional-level investors. 

The latest crypto rout came as investors were already souring on the space and as declines in prices shrank the footprint of virtual currencies. 

The total market value of all tokens has dropped more than 70% from a record peak of just under $3 trillion set a year ago, according to the CoinGecko website. The current worth of $843 billion, as assessed by the tracker, is now less than 1% of the world equities market. Stocks are down a still sizable 16% over the period but a resurgence of broad risk appetite, driven by hopes for a slower pace of central bank interest-rate hikes, sent equities up by more than $13 trillion since they bottomed out Oct. 12.

The stark contrast between sliding cryptocurrencies and ebullient stocks underscores how rapid the turnaround has been for an asset class that was close to winning over mainstream investors less than a year ago. 

Back in 2021 JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou wrote Bitcoin could theoretically reach $146,000 in the long term by crowding out gold — last week he said the current upheavals could send it as low as $13,000. A PWC survey in April found that 42% of crypto hedge funds were predicting Bitcoin to trade between $75,000 and $100,000 by the end of 2022. 

(Updates with latest market moves in third paragraph)

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(Bloomberg) — Tesla Inc. said it will assist a police investigation into a fatal crash involving a Model Y sports utility in China earlier this month, while suggesting the incident wasn’t caused by a malfunction.  

Data taken from the car showed no proof the brake pedal had been applied before the crash, and video showed the brake lights remained off, the electric car maker said in a statement. Instead, the accelerator was heavily engaged in the lead up to the accident, which killed a motorcyclist and high-school student on a bicycle. Tesla said it will “actively provide any necessary aid” to the local police probe, which may involve a third-party investigator.

The Nov. 5 accident in Chaozhou in Guangdong province also injured three people, including the driver. Video circulated on Chinese social media showed a white Model Y speeding until finally crashing. 

The public security bureau in Raoping County didn’t respond to phone calls from Bloomberg News seeking comment.

A verified user on the Chinese Twitter-like platform Weibo, posting under the title of “a family member of the driver,” claimed the driver lost control for the the last 2.6 kilometers (1.6 miles) and though he had tried to apply the brakes, a technical problem must have caused the accident. 

While hundreds of people are estimated to die on China’s roads each day, crashes involving Teslas attract intense public interest, with footage quickly going viral on social media.

Tesla Is Crushing Critics in China by Hitting Them With Lawsuits

In a protest that garnered international attention, a Model 3 owner climbed atop a display vehicle at last year’s Shanghai auto show and yelled that she almost died because her Tesla’s brakes failed. The US carmaker, which initially enjoyed a red carpet welcome in China, finally made a public apology after facing criticism from local authorities and state-run media, without acknowledging any defect to the car.

(Updates with attempts to contact local police bureau.)

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(Bloomberg) —

Crypto.com Chief Executive Officer Kris Marszalek said withdrawals from the platform are working and will continue to work, moving to reassure markets unnerved by the sudden collapse of rival FTX.com. 

Marszalek, speaking Monday in a livestreamed Q&A session, repeated that the company has less than $10 million of exposure to FTX and a “very strong balance sheet.” 

After FTX filed for bankruptcy late last week, markets have turned their attention to the health of other crypto exchanges like Crypto.com. The company’s native CRO token has slumped 45% in the past week, data from CoinGecko show. 

Crypto.com never uses CRO as collateral for loans, Marszalek said. The company, with some 70 million users, has 1-to-1 reserves coverage for all assets and liabilities, he added. Crypto.com will remain an official sponsor for the FIFA World Cup this year, according to the CEO. 

• Read more: FTX’s Freefall Into Bankruptcy Shows Why Case File Is Empty

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(Bloomberg) — You wouldn’t think we were in an economic slowdown if you saw Martin Sorrell’s advertising company’s results this morning – gross profit is up about 73% – although the next few quarters are likely to be tougher than the last. The future health of the UK’s economy may well be in the balance this week ahead of the government’s Autumn Statement. It could possibly the final act of a monetary and fiscal saga that began, can you believe it, in September.

Here’s the key business news from London-listed companies this morning:

In The City

AstraZeneca Plc: The pharmaceutical giant received EU regulatory advances for two of drugs to treat cancer, improving its prospects for future earnings.

• The drugmaker received marketing authorization for a Lynparza combination to treat prostate cancer, and recommendation for approval for Enhertu for patients with advanced gastric cancer

S4 Capital Plc: Martin Sorrell’s media company’s gross profit in the third quarter increased more than 70% compared to a year before, despite the current tech slowdown and “macro political and economic gloom”.

• Sorrell says clients will be focusing on achieving tangible results, moving “down the funnel”, which he says plays to the company’s strengths

Informa Plc: The publishing company boosted its full year guidance due to outperformance in Live and On-Demand Events, alongside growth in academic markets.

Read about the earnings coming up this week:  EMEA Earnings Week Ahead: Vodafone, Siemens, Burberry

In Westminster

The UK Chancellor Jeremy Hunt is expected to delay much of the £55 billion of savings to fill the hole in the public finances until after the next election in an attempt to protect the economy and shore up Tory support as the country heads into recession.

Rishi Sunak arrives in Bali today for the Group of 20 summit. The premier plans to call for the group to help end the war in Ukraine by closing loopholes exploited by Russian President Vladimir Putin for years. Trade Minister Kemi Badenoch will address members of Congress and investors in Washington today, signaling the start of the UK’s latest attempt to boost economic ties with the US. 

In Case You Missed It 

UK home sellers slashed their asking prices at the quickest pace since August this month after a surge in mortgage costs put a chill on the property market.

Shopworkers in the UK are facing more verbal abuse and threats from customers than before the pandemic, as a worsening cost-of-living crisis ratchets up tension in retail stores.

Looking Ahead 

Vodafone Group Plc is due to report first-half results tomorrow.

Bowing to activist pressure, CEO Nick Read has been selling off or merging parts of the sprawling telecommunications company, with deals agreed for the Hungary operations, tower assets in New Zealand, a stake in its Ghana unit, as well as the Vantage Towers transaction. Talks are also underway to merge the UK operations with CK Hutchison Holdings Ltd.’s Three UK. The strategy could “unlock value” despite soft fundamentals elsewhere in the company, Bloomberg Intelligence’s Erhan Gurses writes.

Among the headwinds are protracted revenue weakness in Europe as well as rapidly rising prices. Estimates compiled by Bloomberg point to a slowdown in organic service revenue growth, dragged down in Europe by operations in Spain and Italy. 

For a news fix when the day is done, sign up to The Readout with Allegra Stratton, to make sense of the day’s events.

–With assistance from Leonard Kehnscherper.

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(Bloomberg) — Investors will keep a wary eye on the Group of 20 summit in Indonesia, where US President Joe Biden and Chinese leader Xi Jinping are expected to meet later on Monday, their first in-person conversation since the pandemic emerged.

China’s policy shifts on Covid have injected momentum to export-heavy sectors on hopes the country’s softer stance will help revive flagging sales there, adding to the bullish signals building for European stocks going into the final weeks of a roller-coaster year.

This week marks the last major week of earnings in the current cycle, which has brought respite for some but which leaves corporations facing a final quarter of potential power blackouts and growing labor unrest.

If dealmaking has gone slightly out of fashion lately, nobody told Vodafone Group Plc. Last week’s announcement that the UK telecommunications company is spinning off and selling a stake in its Vantage Towers AG unit less than two years after listing it is a measure of the investor pressure Chief Executive Nick Read is under to lighten its balance sheet. Vantage Towers confirmed its 2023 forecast in a first-half update on Monday. Vodafone is set to follow with its latest report on Tuesday.

Read More: Germany’s Biggest Wage Talks Keep ECB Officials in Suspense

British trenchcoat maker Burberry Group Plc, which also reports this week, has had almost as many executive changes recently as Vodafone has had deals. Its update will be the first since Daniel Lee joined as the company’s new chief creative officer last month.

Read More: Heads Turn to No. 10 as UK Economy Contracts: The London Rush 

Siemens AG on Thursday will be the last top-tier German company to report in the current cycle. Investors are keen for its view of the corporate landscape going into 2023 as the first quarter of its new fiscal year hits full swing.

• To subscribe to earnings coverage across your portfolio or other earnings analysis, run the NSUB EARNINGS function on the Bloomberg terminal.
• For more on what’s going on in other regions, see the US Earnings Week Ahead or the Asia Earnings Week Ahead, and see the ESG Stock Watch for a selection of the environmental, social and governance themes that may come up on this week’s earnings calls.

Highlights to look for this week:

Tuesday: Vodafone (VOD LN) is due to report first-half results at 7 a.m. GMT. Bowing to activist pressure, CEO Read has been selling off or merging parts of the sprawling telecommunications company, with deals agreed for the Hungary operations, tower assets in New Zealand, a stake in its Ghana unit, as well as the Vantage Towers transaction. Talks are also underway to merge the UK operations with CK Hutchison Holdings Ltd.’s Three UK. The strategy could “unlock value” despite soft fundamentals elsewhere in the company, Bloomberg Intelligence’s Erhan Gurses writes. Among the headwinds are protracted revenue weakness in Europe as well as rapidly rising prices. Estimates compiled by Bloomberg point to a slowdown in organic service revenue growth, dragged down in Europe by operations in Spain and Italy. 

• Imperial Brands (IMB LN) is also scheduled to report full-year results, at 7:00 a.m. GMT. The tobacco company is expected to continue its push toward next generation products, such as vaporizers, which generate a growing portion of its income. Additional capital expenditure will be required for the shift into NGP’s, but dividend growth will remain a priority, Bloomberg Intelligence’s Duncan Fox writes. NGP income is expected to be significantly above that reported in 2021, reversing a two-year trend during the pandemic that saw revenue from the products slump.

Wednesday: No major earnings of note

Thursday: Siemens’s (SIE GY) fourth-quarter results are expected at 7:00 a.m. CET. Visibility into fiscal 2022-2023 will be the key area of interest for investors, Omid Vaziri from BI writes. Bloomberg-compiled estimates point to 3.6% organic revenue growth and a gross profit margin of about 36% for the new year. Margins will be in focus as slowing growth and lingering inflation test profitability, although the results may show a positive backlog evolution from generally strong demand across key markets. Easing parts shortages may boost organic sales growth to top 10% in the fourth quarter from 4% reported in the three months prior.

• Burberry’s (BRBY LN) six-month earnings are due at 7:00 a.m. GMT. The signing of Daniel Lee signals the brand’s intention to compete with the likes of LVMH and Gucci. It’s still early days for CEO Jonathan Akeroyd, who took the helm in March, just months before COO and CFO Julie Brown set an April 1 2023 date for her resignation. Burberry upheld its medium-term outlook in its last results despite the management upheaval, but the rapidity of change could still raise challenges, Bloomberg Intelligence’s Deborah Aitken writes. Burberry is particularly sensitive to steps to control the spread of Covid-19 in China, which generates a major chunk of its revenue. The country on Friday reduced the amount of time travelers and close contacts must spend in quarantine, and pulled back on testing, in a significant calibration of its Covid Zero policy.

Read More: Richemont Profit Hits Record as Watches and Jewelry Shine

Friday: No major earnings of note

Read More: Inflation Surprise Isn’t Good News for All Sectors: Taking Stock

–With assistance from Ryan Hesketh, Alexey Anishchuk, Mariajose Vera, Simon Lee, Andrey Biryukov and Sangam Sriram.

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