Trade review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations
21:09
stock micro-strategy Plunges in trading following a report by the Kerrisdale Capital hedge fund according to which it is selling the company’s shares short and at the same time buying Bitcoin.
“Micro Strategy’s stock has risen sharply following the rise in the price of Bitcoin, but as often happens with crypto, sometimes you get carried away too much,” the report said, “the stock price is not justified.”
Micro Strategy’s business model is based on the purchase and holding of Bitcoin, which accounts for about half of the company’s market value. The company now owns about 214 thousand coins, more than 1% of the total coins that will be produced, its market value is about 30 billion dollars while the value of the bitcoins it possesses is about 15 billion dollars, the company’s stock has jumped by 175% since the beginning of the year.
20:02
Shares of Xiaomi soar 12% after launching its first electric car at an aggressive entry price. The smartphone maker hopes to succeed whereDark failed.
The company’s co-founder Li Jun presented in China the company’s strategy and the SU7 model, which costs only $29,900. Xiaomi is aiming for mass sales at the end of April and is even offering discounts for early adopters.
18:53
The stock markets in Europe closed this evening with small gains, and thus the first quarter of 2024 also came to an end, in sum the markets rose by about 6.8%. The Stoxx 600 index rose 0.2% today and broke its record again.
The DAX index rose 0.1%, the French CAC closed steady and the British FTSE added 0.2%.
17:59
Today (Thursday) the founder of the FTX crypto exchange, Sam Bankman-Fried, was sentenced to 25 years in prison for fraud and conspiracy. “They built something beautiful and I destroyed it,” Beckman said of his partners in the crypto exchange. “It pained me to see everything that happened. Our customers deserve more. I was the CEO, so the responsibility is on me.” That’s what Bankman-Fried said when the sentence was handed down.
Last November, a US jury found Sam Bankman-Fried guilty of all seven criminal counts with which he was charged. And the founder of the crypto exchange FTX faced a maximum sentence of 115 years in prison. The sentence set by the judge in the case, Louis Kaplan, is lower than the sentence expected by the prosecutors – which they requested Shabankman Fried will be sentenced to 40-50 years in prison, but significantly higher than the sentence requested by the defense – which was only 5-6.5 years.
17:49
The share of the luxury furniture chain RH Soaring after the company’s management updated its forecast, according to which demand is going to increase significantly in 2024, thanks to, but not only, the expected interest rate cuts. The jump in the stock is happening even though the company missed analysts’ expectations in the last quarter and even provided a disappointing forecast for the first quarter.
The company’s net profit in the last quarter was 11.5 million dollars, the company emphasized that this profit was made even though “the company faced the most challenging housing market in 30 years”.
17:23
Bloomberg notes the commodity market today, “Prices have more than doubled in a little over three months and are forcing traders and chocolate manufacturers to pour in more and more cash to cover commodity trading expenses (hedging)”.
“This phenomenon is reminiscent of the crisis with the energy companies in Europe when gas prices rose spirally and without control while the governments were forced to bail them out. These concerns could get even worse.”
“It’s hard to understand the impact of these price increases,” said Pam Thornton, a commodities trader at Nightingale Investment Management, who previously ran a cocoa hedge fund. “When you have such big changes, there are casualties and I’m shocked that it hasn’t happened yet.” Cocoa is now trading at about $9,800 per ton, slightly below its peak.
Apart from chocolate consumers, two companies that may be affected by cocoa prices are Hershey and Mondelez International , owner of the Toblerone and Cadbury brands. But according to Wells Fargo “the price increase will probably be passed on to the consumers”.
16:32
Bank of America estimates that the Euro Stoxx 600 will lose 15% and interest rate effects will hit later this year. “Circulating stocks in Europe have risen by about 40% compared to defensive stocks since the middle of 2022. This trend was driven by a continuous decrease in the global risk premium and not necessarily due to a unique European economic strength.”
“Compared to cyclical stocks with a high fair value (such as the fields of raw materials and capital equipment), the food and beverage sector is now the most attractive, and this despite a certain decrease in its profits. If the momentum of global growth weakens in the future, the risk premium is expected to rise and cause a sharp rotation from cyclical stocks to defensive stocks Mining – an attractive entry point: There is a significant gap in performance between capital equipment stocks (raw materials and commodities) and mining, even though both sectors have similar exposure to Chinese production and demand.”
“Currently, it appears that capital equipment stocks are underpricing global growth risks while mining stocks are overpricing them. Therefore, the mining sector constitutes an attractive cyclical hedge in light of the bank’s macroeconomic forecasts.”
Bank of America is negative about European stocks, with a non-cyclical vs. defensive weight, “the bank’s macro forecast predicts slower growth and higher risk premiums – a scenario that supports the assessment that the Stoxx 600 index will fall by 15% and that there will be a cyclical underperformance of about 15% vs. Defensive stocks. Food & beverage and pharmaceutical stocks are favored as defensive sectors, while capital equipment and banks are underweight.”
Other key points raised by the bank: “The global risk premium has fallen since mid-2022 – which has supported cyclical stocks and the stock markets in general. The full impact of the interest rate hikes is not yet fully felt, and is expected to hit later this year, which may cause an increase in risk premiums and a slowdown in growth.”
16:04
Amazon invested an additional $2.75 billion in the AI company Entropic. The company had the purchase option until the end of this month after investing 1.25 billion dollars in the company last September.
The price of gold continues to rise and is “holding” above $2,220, $2,236 per ounce heading into tomorrow’s Consumer Price Inflation (PCI) release day tomorrow. At its peak, gold traded at $2,246.
15:49
The US economy grew at an annual rate of 3.4% in the last quarter of 2023, which is the forecast that stood at 3.2%, but a decrease from the 4.9% growth measured between July and September.
15:34
The last trading day for the first quarter of 2024 opened with a mixed trend. The S&P 500, which is now trading unchanged, will try to break its record for the 22nd time this quarter, either way it is probably the index’s best quarter since 2019. The Nasdaq is down 0.1% and the Dow Jones is up by .1%.
The price of gold continues to rise and “holds” above $2,220, $2,236 per ounce for tomorrow, the day of publication of the Consumer Price Inflation (PCI) tomorrow. At its peak, gold traded at 2,246. Tomorrow, Good Friday, there will be no trading on Wall Street and in many other countries around the world.
At the world’s largest bank, JP Morgan, which has repeatedly missed the direction of the market in recent years, they are trying to bet once again on the future forecast of the markets and expect declines. According to JP Morgan’s chief strategist, Dubravko Lakos-Bujas, investors simply won’t know when the declines are coming: “You could be stuck on the wrong side of the market’s momentum,” quoted by the Bloomberg news agency, and read For investors to spread their investments more.
“Decreases in the markets is something that can come one day suddenly, it has already happened in the past that there were flash crashes,” Lakos-Boges said. “One large fund starts to cancel some positions, a second fund hears this and tries to change its positions. The third fund is already caught off guard, and then the momentum starts to fall apart.”
15:11
stock Estee Lauder Jumps by about 5% in pre-trade after Bank of America upgraded their recommendation for the stock from ‘buy’ to ‘neutral’. The bank notes that the new products launched by the company along with the improvement in its share in the luxury beauty sector are expected to support the stock’s performance.
13:33
The Israeli Autotech company Re Automotive , which represents the SPAC trend that has faded on Wall Street, reported its financial results for the quarter last night: the company announced that the net loss in 2023 amounted to $114.2 million, compared to $107.4 million in 2022. The reports stated that the increase in the net loss was mainly due to revaluation of warrants in the amount of 17.5 million dollars and an increase in development expenses. This increase was partially offset by a decrease in expenses for share-based compensation and operational efficiency that resulted in a decrease in salary and related expenses and other operating expenses.
The net loss in the fourth quarter of 2023 amounted to $35.2 million compared to $24.1 million in the third quarter of 2023 and $27.3 million in the fourth quarter of 2022. The increase in the net loss is mainly attributed to an increase in development expenses in the fourth quarter of 2023, which was partially offset by Reduction in expenses for share-based compensation.
At the same time, the reports stated that the company ended the fourth quarter of 2023 with liquidity of 86 million dollars, which includes cash balance, cash value and short-term investments. The burning of free cash flow (cash used for current operations and the purchase of fixed assets) decreased by 25% from 124 million in 2022 to 93 million dollars in 2023. And the value of the backlog exceeded 50 million dollars – a growth of 900% compared to last year.
11:53
The main indices in Europe are currently trading in a positive trend. The Potsi increases by 0.4%, the DAX adds to its value by 0.1% and the KAC increases by 0.4%.
US futures are trading slightly lower.
In early trading on Wall Street, tech stocks are trading lower. Nvidia losing a 0.6% campaign, Tesla down 0.4% Meta andDark decrease at a similar rate andAmazon Mishila estimates 0.2%.
10:20
A positive opening in Europe: the Dax is trading around the base levels, the British FTSE rises by 0.3% and the French CAC adds 0.2% to its value.
UK Macro: The GDP in the fourth quarter of the year 2023 decreased by 0.3% in accordance with early expectations. Also in the previous quarter, Great Britain showed negative growth, which indicates that Great Britain has officially entered a recession.
08:13
This morning in Asia, the leading indices are trading in a mixed trend. The Nikkei falls by 1.4%, the Hang Seng jumps by 1.7%, the Nashgai Stock Exchange adds 0.9% to its value and the Kospi falls by 0.2%.
US futures trade hourly with slight declines.
Last night on Wall Street, the main indices closed in a positive trend. The Nasdaq rose 0.5%, the S&P 500 added 0.9% and the Dow Jones rose 1.2%.
Tesla The negative momentum continues after Morgan Stanley’s senior auto analyst, Adam Jonas, lowered the company’s vehicle shipment forecast by 9% and noted that he estimates the electric vehicle giant will raise prices to compensate for the decline in sales. Jonas predicts that vehicle deliveries in the first quarter will be 425,400, compared to 469,400 in the previous forecast. He also lowered Tesla’s full-year vehicle delivery forecast to 1.95 million, from 1.99 million. Since the beginning of the year, Tesla’s stock has fallen by about 30%.
Investment company Wedbush removed the Netflix From the “Best Ideas List”. The company emphasizes that Netflix will have to find new growth areas to encourage demand: “We think that Netflix will have a much harder time impressing investors in 2024 than in 2023. Some of its growth drivers have already been fully priced, such as the elimination of the password sharing option. We think that Netflix can still generate Benefit from the move, but it is already marginal and expected.” However, Wedbush still gives the company’s stock a high rating, which has risen about 30% since the beginning of the year.
This morning in the US, government bond yields are trading slightly higher. The yield on the 10-year US bond is trading around 4.21%.
Oil prices fell on Wednesday after a strong rise in recent days, with Brent oil trading at $85, with the price of crude easing to $81 a barrel.
Bitcoin continues to weaken and drops this morning (Thursday) to a price of 69 thousand dollars.
In the macro sector, later today (Thursday) the UK GDP data for the fourth quarter of 2023 is expected to be published and at the same time the third estimate for the US GDP data will be published.
Magdalena Tao, Asia analyst at the Julius Baer Wealth Management Bank, estimates that “the poor performance of the yen against the dollar is also due to interest rate differences. So we may see two interest rate hikes in Japan by the end of the year, up to a level of about 2.94%.”
● Both of these currencies are considered a safe haven, so why does one fall and the other soar?
“Without another interest rate increase, we will continue to see weakness in the Japanese yen (a problematic situation for a country that relies on exports, acc.) Because of this, the market expects two interest rate hikes by the central bank by the end of the year. The Japanese Minister of Finance announced that if necessary, the government will intervene in the foreign exchange market and work to prevent sharp fluctuations in the value of the currency by all means.”
In Oppenheimer, technical strategist Ari Wald writes in his weekly review that the American stock market is expected to continue its positive trend throughout 2024, and only reach its peak next year. He bases his assessment on a similar situation in the market in the late 1980s, when the central bank also adopted a restraining policy while the stock market showed recovery “and rose at the same time as the interest rate hike, and continued this trend even after the start of the interest rate cut, reaching its peak only about 12 months later “.
Wald sees a great similarity between the current behavior of the S&P 500 index and its behavior in 1987-1990, when the bull market trend continued at the same time as the process of aggressive interest rate increases. According to him, the trend was broken when the US economy slipped into recession in the early 1990s. Based on this pattern, Wald estimates that the current upward trend has more tailwind, at least until the year 2025.