The Highlights
Global equities sold off this week after more hawkish language from the Federal Reserve. The MSCI World Index fell 2.77%, while the S&P 500 dropped 2.92%. The Fed kept rates at 5.25-5.50% but warned additional rate hikes are possible. The NASDAQ declined 3.62%, while the small-cap Russell 2000 finished the five days down 3.78%. As enthusiasm around AI has declined, investors are wondering if valuations of the high-flying tech stocks are overextended. Cannabis stocks fell for the first time in five weeks. The US cannabis MSOS ETF slid 11.36%, while the global YOLO ETF lost 10.43%. There was not any meaningfully negative news, rather it appeared to be profit-taking after a strong four-week run. Curaleaf (CSE: CURA, OTCQX: CURLF) and Trulieve (CSE: TRUL, OTCQX: TCNNF) were hit hardest, down 19.93% and 16.91%, respectively. TerrAscend (TSX: TSND, OTCQX: TSNDF) at -0.94% and Ascend (CSE: AAWH, OTCQX: AAWH) at -3.39% held up best. YTD, TerrAscend is up 86.73% versus 15.02% for MSOS. SAFER Banking Bill Introduced A bipartisan group of Senators introduced a revamped version of SAFE Banking called the Secure and Fair Enforcement Regulation (SAFER) Banking Act. Importantly, the new bill appears to resolve the previously sticky Section 10, including support from Senator Jack Reed from Rhode Island. The Senate markup vote is scheduled for Wednesday, September 27. A strong committee vote will create momentum heading into a potential Senate floor vote. Timing of the floor vote is uncertain, but Senator Chuck Schumer said it will happen with “all due speed.” Senator Chuck Schumer also commented that the HOPE and GRAM Acts will be added to SAFER Banking. HOPE provides states with funding for expunging cannabis offenses and GRAM ends the prohibition of sales to users of cannabis in states where medical or recreational cannabis are legal. If the Senate floor vote is successful, the next step is a vote in the Republican-controlled House. SAFE Banking passed the House seven times, but this was under Democrat leadership.
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