4 Top Fintech ETFs to Watch
I’d be willing to bet you or someone you know uses Apple Pay or Google Pay more often than pulling out a regular credit card. Personally, I’m a big fan of Apple Pay. I love that I don’t have to carry around my wallet and it, sometimes regrettably, makes online shopping extremely easy. The surge in digital payments is part of the global shift away from cash and is all thanks to an emerging sector known as Financial Technology AKA FinTech. If you’re looking to invest in the FinTech world, here’s a list of 4 ETFs with a special focus on the sector. ETFMG Prime Mobile Payments ETF (IPAY) The ETFMG Prime Mobile Payments ETF (IPAY) is owned by ETF Managers Group (ETFMG). ETFMG says this fund is the first to target the mobile payments industry and it “capitalizes on the transition taking place from cash/physical credit card payments to a mobile/digital system”. IPAY was launched on July 15, 2015. At writing, the fund had $908.7 million in assets across 52 stocks. The top 10 stocks in IPAY are: American Express (AXP) Mastercard (MA) Visa (V) Block (SQ) Fiserv (FISV) Adyen N.V. (ADYYF) Fidelity National Information Services (FIS) PayPal (PYPL) Global Payments (GPN) Discover Financial Services (DFS) Global X FinTech ETF (FINX) The Global X Fintech ETF (FINX) is a fund owned by the ETF provider Global X, which is a member of Mirae Asset Financial Group. Global X says this ETF “seeks to invest in companies on the leading edge of the emerging financial technology sector.” The company says that sector “encompasses a range of innovations helping to transform established industries like insurance, investing, fundraising, and third-party lending through unique mobile and digital solutions.” FINX was launched on September 12, 2016. At writing, the fund had $892 million in assets across 55 stocks. The top 10 stocks in FINX are: Intuit (INTU) Fiserv (FISV) Adyen N.V. (ADYYF) Fidelity National Information Services (FISV) SS&C Technologies Holdings (SSNC) Coinbase (COIN) PayPal (PYPL) Bill.com Holdings (BILL) Block Inc (SQ) Xero Ltd (XROLF) Ark Fintech Innovation ETF (ARKF) The Ark Fintech Innovation ETF (ARKF) is a fund owned by Cathie Wood’s ARK Invest. Yes, Wood owns more than just the famed Ark Innovation ETF (ARKK). ARKF was launched on February 4, 2019. ARK Invest defines “Fintech innovation” as “the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works.” At writing, the fund had $1.6 billion in assets across 33 stocks. The top 10 stocks in the ARKF ETF are: Block Inc (SQ) Coinbase (COIN) Shopify (SHOP) Twilio (TWLO) UiPath (PATH) Sea Ltd. ADR (SE) MercadoLibre (MELI) Adyen N.V. (ADYYF) Teladoc (TDOC) Robinhood (HOOD) Ecofin Digital Payments Infrastructure Fund (TPAY) The Ecofin Digital Payments Infrastructure Fund (TPAY) is owned by Ecofin Investments. The fund invests in companies Ecofin believes will benefit from the transition to digital payments from traditional cash. TPAY was launched on January 31, 2019. At writing, the fund had just $10 million in assets across 56 stocks. So as you might expect, it trades very little volume — just about 3K shares per day. The top 10 stocks in TPAY are: American Express (AXP) Fleetcor Technologies (FLT) Mastercard (MA) Discover Financial Services (DFS) Visa (V) Global Payments (GPN) Fiserv (FISV) Fidelity National Information Services (FIS) Henry Jack & Associates (JKHY) Docusign (DOCU) The FinTech world is only expected to grow more as the Metaverse becomes “reality”. Check out this post to learn more about the Top 5 Metaverse stocks you should be watching!
Continue Reading -->5 Top Metaverse Stocks to Watch
As the metaverse becomes reality, you may be looking to add some “metaverse stocks” to your portfolio. Here five names to watch in the sector: Unity Software (U) Unity Software (U) is a video game software development company. Game designers, artists, architects, and engineers have used Unity to build interactive 3D content on more than 20 platforms. The company also has software for Augmented Reality and Virtual Reality developers. Unity has never turned a profit, but CFO Luis Visoso is optimistic about the future. In its Q4 2021 earnings, Visoso said, “The business momentum coupled with the quality of our innovation plans gives us confidence to guide to a revenue growth range of 34% to 36% in 2022 as we continue to improve margins.” An analysis by Motley Fool shows if Unity maintains its revenue growth trajectory of 30%, revenue would surge 271% by 2026 to over $4 billion. Autodesk (ADSK) As more people buy land in the metaverse, they need software to develop that land. That’s where Autodesk (ADSK) comes in. The company describes itself as “a leader in 3D design, engineering and entertainment software.” Autodesk’s programs are already used by architects and engineers to design virtual reality plans for real buildings. But metaverse architects could use the software to construct digital buildings. Nvidia (NVDA) You can’t access the metaverse without a computer, phone, or tablet. And those devices don’t work without computer chips. Nvidia (NVDA) is one of the biggest chipmakers in the world, with a special focus on gaming and graphics processors. In August 2021, Nvidia launched its own open platform for metaverse design – the Nvidia Omniverse. The Omniverse allows metaverse creators, designers, researchers, and engineers to work together virtually, from anywhere. Meta Platforms has agreed to use Nvidia chips for artificial intelligence research. Roblox (RBLX) Roblox (RBLX) is already a metaverse of its own. The online gaming site was founded in 2004 and had 49.5 million daily active users as of Q4 2021. Roblox consists of more than 20 million “experiences” or “worlds” made by online creators for other users to play. The company launched its own digital currency, known as Robux, in May 2007. The coins are used for all transactions between users on the site and to purchase new clothes, accessories, and gear for their avatar. Users purchase Robux like any other digital currency, with cash. Meta Platforms (FB) A list of metaverse stocks wouldn’t be complete without Meta Platforms (FB). The company officially changed its name on October 28, 2021 from Facebook, Inc. to Meta Platforms, Inc. The move was part of CEO Mark Zuckerberg’s belief in the future of a digital world. Since then, Meta has spent big on the shift. In 2021, Meta spent $12.5 billion on the metaverse division, Reality Labs. That’s up from $7.8 billion in 2020. In its Q4 earnings, Meta said it plans to increase that investment in 2022. The stock crumbled after that earnings report, as Meta forecast lower user growth for Facebook. Meta Platforms shares plunged 26% on February 3, 2022. Not only was that the largest one-day drop in company history, it was the largest valuation wipeout in market history. Meta lost over $251 billion in market value that day. The company also owns Oculus VR, which is the leading virtual reality headset around the world. Are You Trading the Metaverse? So what metaverse stocks do you already own? Which are you planning to buy next? Let us know in the comments!
Continue Reading -->5 Top Uranium Stocks You Need to Watch
As the world looks to ditch fossil fuels, nuclear power is re-emerging as a more popular clean energy source. And in order to have nuclear power, you need uranium. Here’s 5 uranium stocks to watch, including one that’s a new player in the game. Ur-Energy (URG) Ur-Energy Inc (URG) is an American uranium mining company. The company owns approximately 48,000 acres for mining in Wyoming, including its flagship property the Lost Creek Project. Ur-Energy also operates the Shirley Basin Project, the Lucky Mc Mine, and the Lost Soldier Project. The company took over the Shirley Basin and Lucky Mc Mine through its acquisition of Pathfinder Mines Corporation in 2013. Ur-Energy was incorporated in 2004 and is headquartered in Littleton, Colorado. Denison Mines (DNN) Denison Mines (DNN) is a Canadian uranium mining company. Its flagship property is the Wheeler River Uranium Project in the Athabasca Basin region of Saskatchewan, Canada. The company also operates the McClean Lake Mill in Saskatchewan. In August 2021, Denison acquired 50% ownership of JCU (Canada) Exploration Company from UEX Corporation for $20.5 million. That acquisition boosted Denison’s interest in Wheeler River to 95%, as JCU owns a 10% interest in the Wheeler River project. The deal also added the Millennium project and the Kiggavik project to Denison’s portfolio. Cameco Corporation (CCJ) Cameco Corporation (CCJ) is a Canadian uranium mining company located in Saskatchewan. As of 2015 it was the second-largest uranium producer in the world. CCJ is the largest publicly traded uranium company in the world. Cameco operates the Rabbit Lake Mine, the Cigar Lake Mine, the McArthur River Mine, and the Key Lake Mill in Canada. It also operates the Crow Butte Mine in Wyoming and the Smith Ranch-Highland Mine in Nebraska through its U.S. subsidiary, Cameco Resources. Outside of North America, Cameco owns the Inkai Uranium Project in Kazakhstan. Rio Tinto (RIO) Rio Tinto (RIO) is the U.S. traded stock of Rio Tinto Group. The company is the second-largest metals and mining corporation in the world and the third-largest global uranium producer. Rio Tinto’s global headquarters are in London with the Rio Tinto Limited headquarters in Melbourne, Australia. Shares are listed on the London Stock Exchange, the Australian Securities Exchange, and the New York Stock Exchange. The Rio Tinto Energy business group is the uranium mining arm of the company. Rio Tinto operated the Ranger uranium mine in Australia until it closed in 2021. It still operates the Rössing uranium mine in Namibia. NexGen Energy (NXE) NexGen Energy (NXE) is a Canadian uranium mining company that is still in the planning stage for its mining operations. The company owns more than 493,000 acres in Saskatchewan’s Athabasca Basin, including 100% of the Arrow Uranium Deposit.Arrow is the largest development-stage uranium deposit in Canada and NexGen is set to build a new underground mine and mill there. This is part of the company’s Rook 1 Project, which also includes the South Arrow, Harpoon, Bow, and Cannon discoveries. NexGen says it is “focused on optimally developing Rook 1 into the largest low cost producing uranium mine globally.” The feasibility study valued the project at $3.47 billion CAD ($2.7 billion USD). What Do You Think? Do you see uranium stocks as a good investment with the shift toward clean energy? Sound off in the comments and let us know what sector you want us to dig into next!
Continue Reading -->Coffee With Greta: Oil Surges, Stocks Rally
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: +154 (+0.5%) SPX Futures: +15 (+0.4%) NASDAQ Futures: +43 (+0.3%) Good morning friends! Futures are higher as oil prices continue to surge and new jobs data beat expectations. Let’s get right to it! Oil, Commodity Prices Soar Oil prices jumped to a 9-year high today as the war in Ukraine intensifies. West Texas Intermediate crude futures rose more than 8% to $112.51 per barrel, the highest price since May 2011. Brent crude futures are also up more than 8% to nearly $114 per barrel, the highest price since June 2014. OPEC+ is set to meet today to discuss April’s output. The group has not yet hinted if it will increase production to offset expected supply shortages from Russia. The International Energy Agency agreed Tuesday to release 60 million barrels of oil from global reserves. That includes 30 million from the U.S. strategic reserves. The U.S. alone consumes more than 20 million barrels of oil per day. Other commodity prices are also soaring, with wheat futures at a 14-year high of $10.59 per bushel. Trading was halted after wheat prices hit limit-up for the second straight day. Private Job Growth Beats Expectations Payroll firm ADP reports U.S. private employers added 475,000 workers in February. That was better than economists’ expectations for 400,000 and a sharp reversal from January’s loss of 301,000. Companies with 500 or more employees added the most jobs at 552,000, while businesses with 50 or less employees lost 96,000. The leisure and hospitality sector added 170,000 jobs. Today’s report comes ahead of the official Labor Department jobs report on Friday. That’s expected to show the economy added 440,000 jobs last month with the unemployment rate dipping to 3.9% Dollar Tree Slips After Earnings Dollar Tree (DLTR) shares are down 2.7% in premarket trade after mixed Q4 results. The discount store reported earnings of $1.78 per share on revenue of $7.12 billion. For the full-year, EPS came in at $5.80 on $26.3 billion in revenue. Analysts expected full-year earnings of $5.57 per share on $26.4 billion. But Dollar Tree’s outlook missed expectations. The company forecast revenue between $6.63 billion and $6.78 billion in Q1 vs analysts’ projections for $6.8 billion. AMC Reports Strong Q4 AMC Entertainment (AMC) shares are down 0.9% ahead of the open despite beating Q4 expectations. The movie theater chain reported a loss of $0.11 per share on $1.17 billion in revenue. That was better than analysts’ expectations for a loss of $0.16 on $1.16 billion in revenue. Attendance at AMC Theaters rose to 59.68 million guests, up sharply from 8.09 million in Q4 2020. SoFi Pops on Outlook SoFi Technologies (SOFI) shares are jumping 15.7% in premarket trade after a record-breaking Q4. The fintech company reported a per share loss of $0.15 at the end of 2021 on $285.6 million in revenue. That was better than analysts’ forecasts for a loss of $0.16 per share on $279 million in revenue. SoFi said it added a record-high 523,000 new members in Q4. The company forecast Q1 adjusted net revenue between $280 million and $285 million with adjusted EBITDA of $5 million. Analysts were projecting adjusted EBITDA of $3 million. For the full-year, SoFi forecast adjusted EBITDA of $180 million vs analysts’ expectations for $147 million. Salesforce Beats Q4 Expectations Salesforce (CRM) shares are up 3.5% ahead of the open after beating fiscal Q4 expectations. The cloud software company reported adjusted earnings of $0.84 per share on $7.33 billion in revenue. That topped expectations for adjusted EPS of $0.74 on $7.24 billion in revenue. Salesforce projected Q1 revenue between $7.37 billion and $7.38 billion, better than analysts’ expectations for $7.26 billion. The company also hiked its full-year fiscal 2023 forecast. Nordstrom Soars on Strong Guidance Nordstrom (JWN) shares are surging 29.1% ahead of the open after issuing strong full-year guidance. The retailer reported Q4 earnings of $1.23 per share on $4.49 billion in revenue. That was better than analysts’ expectations for EPS of $1.02 on $4.35 billion in revenue. Net sales were up 21% year-over-year, but still down 1% compared to 2019. Nordstrom Rack sales continued to improve, down 5% compared to 2019 vs 8% in Q3. Nordstrom forecast revenue growth of 5% to 7% in fiscal 2022, with earnings ranging between $3.15/share to $3.50/share. That topped analysts’ projections for 3.7% revenue growth and EPS of $2.01. Fed Chair to Testify Fed Chair Jerome Powell testifies on monetary policy in the House Financial Services Committee at 10:00 a.m. ET today. Powell must tread a tight line with the war in Ukraine complicating the inflation picture for the Fed. The market has dialed back its rate hike expectations amid uncertainty surrounding the conflict. Most traders now expect a 0.25% hike at the March meeting after previously betting on a 0.5% rate hike. The Fed meets again March 15-16. The Central Bank also releases its Beige book at 2:00 p.m. ET today, which will give the market more clarity on the state of the economy across all 12 Fed districts. Powell testifies in the Senate Banking Committee Thursday. In Case You Missed It Apple (AAPL) halted its product sales in Russia Tuesday. All Apple products listed online through the Apple Store are now unavailable for purchase or delivery in the country. Russia’s state-owned news outlets RT News and Sputnik News are also only available on the App Store within Russia. Mortgage rates are diving as Treasury yields drop amid the Russia-Ukraine war. Data from Mortgage News Daily shows the average 30-year rate dropped to 3.9% Tuesday, after hitting 4.18% Friday. That’s the largest two-day drop since March 2020.
Continue Reading -->Coffee With Greta: Oil Hits 7-Year High on Ukraine Crisis
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -174 (-0.5%) SPX Futures: -20 (-0.5%) NASDAQ Futures: -63 (-0.4%) Good morning friends! Futures are lower as the market gears up for a new month of trade and all eyes remain on Russia’s attack on Ukraine. Let’s get right to it! Oil Prices Hit 7-Year High U.S. crude prices surged to the highest level since July 2014 amid supply concerns as Russia continues its attack on Ukraine. West Texas Intermediate crude futures jumped 5.7% to $101.17 per barrel. At the same time, Brent crude futures rose 6.3% to $104.16 per barrel. Canada became the first country to ban Russian oil imports Monday. The International Energy Agency is meeting today to discuss “the impact of Russia’s invasion of Ukraine on oil supply and how IEA members can play a role in stabilizing energy markets.” Morgan Stanley hiked its oil price forecasts, expecting Brent to average $110 bbl in Q2. Russia Bears Down on Ukraine Capital Russia is continuing its assault on Ukraine with a massive convoy approaching the capital city of Kyiv. Satellite images showed a 40 mile long convoy of Russian military vehicles approaching the city Monday. Ukrainian and Russian officials held talks in Belarus Monday which ended with no resolution. The ruble is down again today after recovering some losses Monday. The exchange rate is over 102 ruble to $1 USD. The Russian Central Bank kept the Moscow Stock Exchange closed again today. Russia-linked ETFs in the U.S. are continuing to plummet today. The VanEck Russia ETF (RSX) is down 15.8% ahead of the open, with the iShares MSCI Russia ETF (ERUS) falling 11.2%. Russians Rush to Crypto Russians flooded the crypto market Monday as the ruble collapsed in response to new sanctions. Trading volume between the ruble and Bitcoin jumped to a nine-month high, pushing BTC’s value above $41,000. The global crypto market cap is up 12.3% over the past 24 hours to $2.04 trillion. Bitcoin is up 17% at $44,600 with Ethereum rising 13% to $2,900. Crypto exchange Binance confirmed Monday it is blocking the accounts of any Russians targeted by sanctions. Binance said it will not freeze the accounts of other Russian users. Target Rallies on Earnings Target (TGT) shares are surging 12.5% ahead of the open after reporting strong fiscal Q4 earnings. The retailer reported adjusted earnings of $3.19 per share on $31 billion in revenue. Analysts had forecast adjusted EPS of $2.86 on $31.39 billion in revenue. Overall sales were up 9% year-over-year last quarter. Target’s online services expanded 45% in the full-year, after surging 235% the prior year. The company forecast revenue growth in the low to mid single-digits this year and earnings growth in the high single-digits. Domino’s Slides on Weak Q4 Results Domino’s Pizza (DPZ) shares are sliding 6% in premarket trade after missing Q4 expectations The pizza chain reported earnings of $4.25 per share on $1.34 billion in revenue. That was short of analysts’ expectations for EPS of $4.28 on $1.38 billion in revenue. Domino’s also announced CEO Ritch Allison will retire. He will be succeeded by COO Russell Weiner. Zoom Warns of Growth Slowdown Zoom (ZM) shares are down 2.2% ahead of the open after the company’s 2022 revenue forecast disappointed. Zoom reported adjusted Q4 earnings of $1.29 per share on $1.07 billion in revenue after the market closed Monday. That beat analysts’ expectations for adjusted EPS of $1.06 on $1.05 billion in revenue. But traders sold off the stock as revenue growth continues to slow. Zoom’s Q4 revenue was up 21% year-over-year, a slowdown from 35% in Q3. The company forecast Q1 revenue between $1.07 billion and $1.075 billion, which would represent growth of just 12%. For the full year, Zoom expects revenue of $4.53 billion to $4.55 billion, lower than analysts’ expectations for $4.71 billion. Zoom is the 4th largest holding in Cathie Wood’s Ark Innovation ETF (ARKK) which is down 0.4% in premarket trade. Lucid Slashes Production Forecast Lucid Group (LCID) shares are tumbling 12.2% ahead of the open after the electric automaker slashed its 2022 production forecast. The company now expects to produce between 12,000 and 14,000 vehicles this year, down from 20,000 previously. The company cited supply chain constraints for the cut. CEO Peter Rawlinson said, “This reflects the extraordinary supply chain and logistics challenges we’ve encountered and our unrelenting focus on delivering the highest-quality products.” Lucid said it has received over 25,000 customer reservations for its vehicles. In Case You Missed It Tesla (TSLA) shares rallied 7.5% Monday as the company’s new factory in Germany appears close to opening. German newspaper Tagesspiegel reported Tesla is expected to receive its final environmental approvals by the end of this week. That is the last hurdle before Tesla can start producing Model Y’s at Gigafactory Berlin. Tesla is said to be planning a grand opening ceremony in the third week of March. A shipment of SpaceX Starlink satellite internet dishes arrived in Ukraine Monday. Ukraine’s digital minister confirmed the deliveries in a tweet, thanking Elon Musk. Musk responded saying “you are most welcome”. SpaceX sent the satellites to Ukraine following a request over the weekend, to alleviate the impact of suspected Russian cyber attacks on the country.
Continue Reading -->Signs of a Recession?
The market had a significant drop last week, and Sami believes that if Thursday’s low doesn’t hold, we could be in for a recession. But knowing exactly where we go from here is a different story. Find out what Sami’s watching in the week ahead. In this video, Sami explains: – The number one pattern showing up on charts right now – Why CIEN looks different from other stocks – Which name he thinks is going to the moon – The oil stocks that are looking bullish – How his bearish idea list compares to his bullish list
Continue Reading -->Scott Redler’s Dog Bytes: Crypto Capitulation
SPX futures are -60 handles after a big 6.5% move from Thursday’s lows. Friday gave nice follow-through to that. Now we’ll see if the 4287 area holds to give some commitment. We have the Fed later this week and a jobs report that will be turned in after the Belarus meeting.Bitcoin: some accumulated into that 1/20-1/21 capitulation decline with me. Others waited for the Feb 3 buy signal when it cleared the downtrend line and cleared the $39K area. It hit $45K. I trimmed a lot, and held some of my alt coins which were up 30%-90%+ in that bounce. But i went back to 50% cash. I’ve traded it a bit since then and it made a higher low at $34k. It acts decent amid the volatility. It would be nice if the double bottom builds to something bigger. Ethereum: some accumulated on the 1/20-1/21 capitulation when it hit a low of $2159. On Feb 3, it broke above the downtrend line to reclaim the 8/21 day. It hit a high of $3250+ where I reduced. I did trade around it. It looks like it made a double bottom last week but we will need time to confirm that.Positions Disclosure as of 2/28/2022 at 8:59 a.m. ET
Continue Reading -->Coffee With Greta: Russia Slammed by Sanctions
Editor’s Note: Coffee With Greta is a FREE morning update from our newest contributor Greta Wall. Want to get it by email every day? Click here. ******** DJIA Futures: -463 (-1.4%) SPX Futures: -67 (-1.5%) NASDAQ Futures: -194 (-1.4%) Good morning friends! Futures are sharply lower as the market assesses the impact of the latest sanctions against Russia. Let’s get right to it! Russian Ruble Plunges The Russian ruble plummeted 29% against the U.S. dollar today after new financial sanctions were imposed against Moscow over the weekend. The ruble hit an all-time low of 119 per dollar but has since pared some of those losses and is now trading at 96 ruble per dollar. Russia’s central bank hiked interest rates from 9.5% to 20% in response and shut down the Moscow Stock Exchange for the day. The U.S. Treasury Department banned transactions with the Russian Central Bank this morning, effectively cutting off the bank from the U.S. dollar. This comes after the U.S., Europe, and Canada imposed limits on the Russian Central Bank’s use of international reserves over the weekend. Officials also removed key Russian banks from the SWIFT interbank messaging system. Russian, Ukrainian Officials Meet Russian and Ukrainian officials are meeting at the Ukraine-Belarus border today. Ukrainian President Volodymyr Zelenskyy has said he does not believe there will be a breakthrough from that meeting. Russia continued its attacks on Ukraine over the weekend, with a focus on the capital city of Kyiv. But Ukrainian forces have so far maintained control of the country. Ukraine’s interior ministry says dozens of civilians have been killed and hundreds have been wounded in the city of Kharkiv. Russian President Vladimir Putin dramatically escalated tensions with the West Sunday, by putting his country’s nuclear deterrence forces on high alert. Putin cited “aggressive statements” by NATO for that decision. Oil Prices Surge Oil prices are rallying again amid renewed uncertainty about how the Russia-Ukraine conflict will impact global supply. West Texas Intermediate crude prices are up 4.6% at $95.74 per barrel. Brent crude prices are up 3.1% at $101 per barrel. Goldman Sachs analysts hiked their forecast for Brent crude prices today to $115 per barrel. U.S. gas prices are expected to hit a new record high amid the surge in oil prices. BP to Sell Stake in Russian Oil Producer BP (BP) shares are down 8.2% ahead of the open after announcing its plan to sell its stake in Russia’s state-owned oil company. BP has held a 19.75% stake in Rosneft since 2013. BP’s CEO is also resigning from the Rosneft board effective immediately.’ Crypto Slips Cryptocurrency prices slid over the weekend amid uncertainty surrounding the financial sanctions against Russia. The global crypto market cap is down 4.4% in the past 24 hours, to $1.8 trillion. Bitcoin is down 3.8% at $38,200 with Ethereum falling 6.6% to $2,600. Trade Deficit Surges to New Record The U.S. trade deficit surged 7.1% in January to a new record $107.6 billion. That’s according to new data from the Commerce Department and is up from $100.5 billion in December. Goods imports jumped 1.8% at the start of the year to a record high $262 billion. Goods exports dropped 1.8% to $154.8 billion. The trade deficit has soared as the U.S. economy opens faster than our global trading partners. The Russia-Ukraine war is expected to make the supply chain issue worse. In Case You Missed It The CDC relaxed its indoor masking recommendations for most Americans on Friday. The agency now recommends wearing a mask only in areas where risk is “high”. The CDC released a new color-coded map for Americans to determine the risk level of their community. About 63% of all U.S. counties are considered low or medium risk. The CDC is now putting heavier weight on hospitalizations and hospital capacity in determining community risk, rather than just case rate.
Continue Reading -->People Still LOVE Oil
Traders remain somewhat cautious towards risk assets, as judged by our latest sentiment survey. And in fact, they seem to view the SPX, Bitcoin, Apple (AAPL), and Tesla (TSLA) as one big asset. But the biggest takeaway is that traders still love oil… which is no surprise given the Ukraine situation. Let’s jump in. IMPORTANT: when we reference “traders” in this article, we are specifically referring to T3 Sentiment Survey respondents. SPX: Bulls Easing Back In Two weeks ago, SPX sentiment fell to an all-time low of 19%. It’s since more than doubled to 40%, which still counts as bearish. Bitcoin Sentiment Bounces Bitcoin sentiment bounced up to 40% this week, exactly matching the SPX. The bounce is to be expected given that Bitcoin came off the lows. Apple: Right in Line Apple (AAPL) sentiment is right in line with the SPX and Bitcoin at 39%. Again, off the lows but definitely not bullish. Tesla: Also In-Line Tesla (TSLA) sentiment fell to 22%, an all-time lows, two weeks ago. It’s since bounced up to 36%, roughly in-line with the SPX, Bitcoin, and Apple. Gold Still Feeling Some Optimism Gold sentiment hit a record high of 81% two weeks ago, and it’s since fallen to 67%. Still, that leans towards optimism. Oil Still Feels the Love Oil has led the market in 2022, with OIH up 31% and XLE up 24%. So as you would expect, traders have been very bullish on oil. And with the Ukraine situation continuing to unfold, oil is up big to start the new week. What Happens Now? Traders are not bullish, but they are definitely not as negative as they were two weeks ago. We’ll soon see if the small rise in optimism is warranted.
Continue Reading -->How Stock Splits Work, and Why You Should Care About Them
10 Things to Know About Stock Splits Alphabet (GOOGL) announced a 20-for-1 stock split on February 1, 2022. And the next day everyone Googled, “what is a stock split?” No, really. You can see the spike in searches in this Google Trends chart: (source: Google Trends) So, let’s break down all the nitty gritty details about stock splits and how they benefit traders! What Is a Stock Split? A stock split is when a company increases the amount of its shares without changing the company’s market value. The most common type is a 2-for-1 forward stock split. But a company’s board of directors can choose any ratio for a split, like Alphabet’s aforementioned 20-for-1 split. How Does a Stock Split Work? Let’s use a 2-for-1 split on a $100 stock. Assume a company has 1,000 shares outstanding that are worth $100 each. That’s a market value of $100,000. (1,000 * $100) The board of directors approves a 2-for-1 stock split. So each $100 share would be split into 2 shares worth $50 each. And the company’s total number of shares outstanding would increase from 1,000 to 2,000. But the market value of the company remains the same: 1,000 shares x $100 = $100,000 market value 2,000 shares x $50 = $100,000 market value Anyone who owned the stock before the split own the same dollar amount worth of stock, just divided into more shares. It’s like slicing a pie into 16 slices instead of 8. If someone had 5 shares worth $100 each ahead of the stock split, they would then have 10 shares worth $50 each after the split. What is the Point of a Stock Split? You may be wondering why a company would do a stock split if there is no change in value. Although a split itself does not make a company more or less valuable, it has the potential to push the stock higher. Splitting a large stock makes it easier for smaller traders and investors to buy and increases the number of shares available to be purchased. What Does a Stock Split Signal About a Company? A stock split signals to the market that a company believes it will continue to grow and attract new investors. By splitting the stock, the company makes it easier for more traders and investors to buy. How Do Companies Typically Perform After a Split? According to Zacks Investment Research, stock prices usually go up after a split. The firm cites two studies which found split stocks outperformed the overall market by 8% the year after the split and 12% the following three years. This could be partly caused by more investors buying the stock, because they feel like they are getting it for a lower price. And more people buying the stock drives the value up over time. Are There Other Kinds of Stock Splits? There is another kind of split — a reverse stock split. In a reverse split, the number of shares is reduced and the share price is increased. Say a company has 1,000 shares worth $100 each, and implements a 1-for-2 reverse split. Every two shares of the stock would be turned into one, leaving the company with 500 total shares worth $200 each. The value of the company stays at $100,000. But the number of shares shrinks and the individual share price is boosted. Why Would a Company Do a Reverse Stock Split? A reverse split is typically used to prevent delisting from an exchange. The New York Stock Exchange, for example, has a minimum share price of $4 for a stock to be listed. If a stock does not maintain that minimum, it can be delisted from the NYSE and sent to an over-the-counter (OTC) market. Reverse splits are also used to boost a company’s image. Many traders and investors look at single-digit stocks as risky investments. So a company can use a reverse split to avoid that stigma. Which Notable Companies Have Done Splits? In the first week of February 2022 alone, there were 60 total splits. Most of them didn’t get any attention. But back in 2020, two of the biggest companies on Wall Street split their stock on the same day. In August 2020, Tesla (TSLA) implemented a 5-for-1 split, while Apple (AAPL) did a 4-for-1 split. Both companies began trading on a split-adjusted basis on Monday, August 31. TSLA shares closed at $2,213.40 on Friday, August 28, making the 5-for-1 split equivalent to $442.68 per share. Tesla’s stock hit new all-time highs of over $1,200 per share in November 2021, up more than 170% from the split. AAPL has also seen success since its 4-for-1 split. The iPhone maker’s stock closed at $499.23 on Friday, August 28, making the 4-for-1 split price $124.81 per share. Apple became the first company in history with a $3 trillion market cap in January 2022 as shares rose to $182.94. The tech giant said the goal of its split was to make the stock “more accessible to a broader base of investors.” What Will GOOGL’s 20-for-1 Stock Split Look Like? Up next for big stock splits is Google-parent Alphabet (GOOGL). In its Q4 earnings report, the company announced a 20-for-1 stock split for Class A (GOOGL) and Class C (GOOG) shares. The decision for such a big stock split comes as Alphabet shares are nearing $3,000 each. To break down what this split will look like, let’s use that price. Alphabet said the stock will begin trading on a split-adjusted basis on July 15, 2022, based on shareholders on July 1. That means one must own the stock on or before July 1 in order to participate in the split. Those who buy shares after that date, will buy based on the split-adjusted price. So if GOOGL shares are worth $3,000 each when the split is implemented, every one share will split into 20 that are worth $150 each. That keeps the value the same for current shareholders, but makes the
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