News and analysis

A short wave of U.S. Dollar's strengthening continues since the beginning of December, yet it would be close to its end, in my opinion, as fundamental reasons for declining Treasuries’ yields are still here. The annual return from 10-year public debt papers has already slipped by almost a full percentage point, from a peak of 5.02% in late October to 4.0990% today. That would more than cover current bets on any potential interest rate cuts by the Federal Reserve in 2024, especially since it is unknown, in what format it will take place, and whether it will take place at all. So, non-Dollars may turn around to rise again at any moment, without waiting for a concrete drivers like U.S. Nonfarm Payrolls this Friday or consumer inflation release on December 12. EURUSD went down from 1.10 to below 1.07, which could be considered oversold enough to start bouncing. Even in case of lowered price pressure indicators, Gold spot and futures have a high chance of getting back into a retest move to fresh all-time highs, which have been set well above $2100 per troy ounce at the opening of this trading week. XAUUSD dug into the lower range of $2,015-2,035, bouncing off the bottom of this $2,000+ area as gold buyers are getting used to the new scale of price values. It seems it is only a matter of time before their minds become mature to make the golden lawn growing higher to form buds and flowers to bloom. Physical bullion and e-Gold are usually a good rival to foreign exchange reserves when monetary policy suggests a dovish reversal and the economy slows down, especially if the stock market rally would be rather limited. Gold transactions are also required to hedge newly accumulated positions in stocks in the broad market. Buying gold moderately above $2,000 is a better choice than doing the same trick above $2,100 or higher, IMHO.

MongoDB was up nearly 220% since the beginning of 2023, as of December 5 closing price, thanks to generative AI world transformation. However, these shares turned out to be partially overbought. A tech company worth $30 billion before the Q3 report far exceeded nominal quarterly expectations by the Wall St expert community, but the stock dropped by nearly 6.5 % on pre-market trading before the next trading session.

Its revenue reached $432.9 million vs analyst estimates of $404 million only, a 7.2% beat and a fresh all-time record, with a 93.5% consensus beat on EPS (equity per share) of $0.96 vs average projections of $0.50. The company's revenue guidance for the current quarter was $431 million at the midpoint, also above analyst estimates of $414.1 million. MongoDB's cash flow was positive at $34.96 million for Q3, compared to a negative number of -$27.3 million in Q2. The company has 46,400 customers, up from 45,000 in Q2, although missing market estimates of 46,870.

So, our first conclusion is that more than 25% extra growth in share price on expectations in November, from $345 to above $440, could play a sick joke with bulls, due to some profit taking despite strong facts. The temporary expansion of losses in market value is likely to be replaced by new waves of growth in the coming weeks.

"MongoDB continued to perform at a high level in the third quarter, as evidenced by 30% revenue growth and better-than-expected profitability. We are pleased by our success in winning new workloads from both new and existing customers across verticals, geographies, and customer segments," said Dev Ittycheria, the company's CEO. Launched in 2007 by the team behind Google’s ad platform, DoubleClick, MongoDB helps corporate customers to store large volumes of semi-structured data. The amount of data is accelerating, so that the importance of its storing in efficient formats would rise further, with focus on high-scale processing of images, audio, and video information.

MongoDB's revenue grew from $226.9 million in Q3 2022 to $432.9 million in Q3 2023, which is highly impressive, even though the pace of expansion became slower, when sales increased by $9.15 million only in the last quarter vs a $55.5 million surplus from April to June. Yet, a one-off price fluctuation could not be a real source of concern in the context. Buying these dips looks attractive to invest for mid-term.

Pinduoduo is a China-based social e-commerce platform that uses true customers' feedback and real pictures of distributed products. Many people call it a hybrid version, which integrates some features of Amazon, Facebook, eBay and Pinterest at the same time, mostly fighting for the part of the audience that enters online from a smartphone or a tablet. Two different prices that are usually indicated in Pinduoduo's product card shows the standard price for one piece of a product added by lower price for joint, or even "viral" purchase, so that a potential buyer could create a group to purchase particular products together on discounted prices or join an already existing group, while the application only fixes the minimum number of each group's participants. PDD Holdings has been traded at the Nasdaq stock exchange since summer 2018 to represent Pinduoduo on Wall Street. Its shares already climbed by more than 75% year-to-date, including a jump from $101 to nearly $147.5 last month, boosted by blockbuster third-quarter earnings on November 28. PDD announced the Q3 revenue of 68.84 billion in Chinese Yuan, which was an equivalent of $9.435 billion at the moment, an increase of 94% from 35.5 billion in Chinese Yuan in Q3 of 2022, while the company's operating profit added 60% YoY to reach 16.7 billion in Yuan. This exceeded consensus expectations by almost 25% for the sales line and about 30% for the profit line. PDD’s market cap soared above $190 billion to eclipse the value of its well-known rival Alibaba, as the latter is still crippled by claims of governmental regulators.

Meanwhile, Pinduoduo is enjoying a lucky year. Its co-CEO Chen Lei commented his company clearly felt the recovery of the Chinese economy. Another pillar of its strength was Temu, a cross-border e-commerce platform to conquer America and the other world. Launched in autumn 2022, Temu successfully adopted a fully managed Chinese model, when both transaction and marketing revenues maintained synchronized growth in early stages, while later the introduction of extra revenue sources provided an accelerated growth of transaction revenues. Unlike other companies with Chinese roots that chose Southeast Asia as their primary destination, Temu targeted the North American market right from the very beginning trying to compete even with giants including Amazon. It is using content-based promotion on public platforms and affiliate marketing to attract customers, getting more space to cut its costs by reducing traditional marketing expenses.

Pinduoduo stock is facing an investing boom unlike other Chinese marketplaces like Alibaba and JD.com. It may contain further upside potential, given that the February 2021 peaking price at $212.6 per share is still 48% higher than the current market price of PDD.

Fantom (FTM) is adding 7.0% to $0.330 since the beginning of the week. Prices are nearing the important resistance at $0.350. However, this rise is primarily facilitated by ongoing Bitcoin rally. The Fantom itself have no reasons to climb.

Bitcoin prices rose by more than 10% this week reaching almost $45,000 per coin. There are no particular new reasons for this rally, while old drivers like spot Bitcoin-ETF approval perspectives and April halving are rather an excuse for such upside. On the other hand, there are no major reasons for Bitcoin prices to drop.

Fantom internal metrics are declining rapidly in the last weeks. Development activity, social media and network activity were declining. This explains the underperformance of the FTM against BTC. If Bitcoin continues to rise, FTM is likely to pass the resistance at $0.350.