SEC's crypto lawsuits, Chinese trade data, OECD outlook - what's moving markets

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Investing.com -- Investors attempt to gauge the outlook for the cryptocurrency industry after the U.S. securities regulator sues two major crypto exchanges. Elsewhere, Chinese trade data points to sluggishness in the post-COVID recovery for the world's second-biggest economy, while the OECD marginally upgrades its global growth outlook for 2023.

1. Traders react to SEC's crypto crackdown

The price of the world's top cryptocurrency Bitcoin surged by more than 4% on Wednesday, recovering from some losses in the prior session, as traders digested the impact of two lawsuits brought by U.S. regulators against leading crypto exchanges Coinbase Global (NASDAQ:COIN) and Binance.

Meanwhile, shares in Coinbase edged higher in premarket trading, rebounding slightly from a sharp decline on Tuesday after the Securities and Exchange Commission sued the firm over operating an unlicensed exchange. The dip added on to steep losses seen on Monday that were sparked by similar charges brought by the SEC against rival Binance.

Despite the crackdown, Cathie Wood's Ark Invest has increased its stake in Coinbase, according to data from the website Cathie's Ark, which tracks the Ark group's investment activities. Wood's flagship ARK Innovation ETF (NYSE:ARKK) carried out most of the buying, tacking on more than 300,000 shares.

Wood has repeatedly backed Coinbase and the broader crypto industry, arguing that Bitcoin could prove to be an effective inflation hedge.

2. Chinese exports drop

Chinese exports contracted by more than expected in May, in a fresh sign of the headwinds facing the country's recovery after the lifting of harsh COVID-19 restrictions.

Exports declined by 7.5% during the month from the same period last year, data from the Customs Administration showed on Wednesday, as the world's second-biggest economy was hit by weak overseas demand for its locally produced goods.

The reading had risen for the past three months as local manufacturers raced to meet pending orders after the anti-COVID rules were relaxed. But with that backlog cleared, Chinese firms are facing a dearth of new orders.

Imports also dropped by 4.5%, although this fall was less than estimates and slower than the 7.9% dip in April.

Factoring in both the export and import figures, China's trade surplus unexpectedly slipped to a one-year low in May.

3. OECD lifts annual growth outlook, but headwinds remain

The global economy is now expected to grow at a marginally faster pace than previously anticipated in 2023, according to a new forecast on Wednesday from the Organization for Economic Co-operation and Development.

The Paris-based organization noted that lower energy prices are easing the strain on household budgets, while business and consumer sentiment are also improving. The re-opening of China has also helped to boost global activity.

As a result, in the OECD's latest economic outlook, the group predicted that the world's gross domestic product will expand by 2.7% this year, up slightly from its previous projection of 2.6%. However, when not including the pandemic-hit year of 2020, this would still be the lowest yearly rate since the 2008-2009 financial crisis, the OECD noted.

Meanwhile, growth is seen speeding up to 2.9% next year -- an unchanged level from the OECD's March predictions. During that time, the OECD expects a recent spate of central bank interest rises aimed at corralling inflation to gradually weigh more on private investment.

The OECD's announcement comes after the World Bank also raised its 2023 global growth outlook on Tuesday, but flagged that tight monetary policy and the war in Ukraine are threatening the wider economy. It also slashed its 2024 forecast to 2.4% from a previous outlook of 2.7%.

4. Futures point lower

U.S. stock futures edged marginally into the red on Wednesday, but kept largely near the flatline, after the main indices rose in the prior session as traders looked ahead to the Federal Reserve's all-important interest rate decision next week.

At 04:22 ET (08:22 GMT), the Dow futures contract had lost 62 points or 0.18%, S&P 500 futures dipped by 7 points or 0.16%, and Nasdaq 100 futures shed 43 points or 0.29%.

Strength in financial and consumer discretionary stocks helped boost gains on Wall Street on Tuesday, with the Dow Jones Industrial Average and S&P 500 both closing higher.

The tech-heavy Nasdaq Composite also ended at its best close so far this year despite renewed concerns over the cryptocurrency industry following the SEC's complaints against Coinbase and Binance.

5. Oil volatile amid China recovery worries

Oil prices were choppy on Wednesday after the weaker-than-anticipated Chinese trade data exacerbated fears over a possible slowdown in the country's nascent post-pandemic recovery and undermined hopes that the world's biggest oil importer would be at the forefront of a surge in demand this year.

Meanwhile, industry data late on Tuesday showed that crude inventories in top oil consumer the U.S. shrank by more than expected last week. However, a build in gasoline stocks in the middle of the key U.S. summer driving season weighed on sentiment.

By 04:42 ET, U.S. crude futures traded roughly unchanged at $71.74 per barrel, while the Brent contract also oscillated around the flatline at $76.28 a barrel.