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24.11.2022

Tesla is unique in terms of its share price. TSLA stocks rallied long before the company established the production of viable and steady electric vehicles (EV) and also thanks to the reputation of its leader Elon Musk. It is true that Tesla sometimes misses its mark and deadlines to launch new models and products but it seems that the crowd invests in Tesla not for its hit-and-run strategy but because of their belief in Musk’s ability to transform our everyday life in the long run.

Tesla stocks are trading 60% off their peak prices thanks to the market correction that has been squeezing the market since the end of 2021. Nevertheless, market participants are discussing some drivers that may hit the company’s business. For example, lower gasoline prices may hamper EV sales. It is true that Americans are now paying around $3.6 per gallon compared to $5 a few months ago. But this driver is largely exaggerated as gasoline prices is not the major reason for someone to buy an electric car. A move towards green energy and minimising carbon footprints is not a short term affair, but a sustainable long-term trend that is supported by governments, including the United States and China. Besides. oil producers forecast global demand will outweigh the supply side over the coming years while also betting on higher prices of fuel. So, no short-term movements of gasoline prices would affect EV buyers, as well as TSLA stock buyers.

The more serious issue is the declining prices for Tesla’s second-hand EVs. Tesla used cars are now 15% cheaper after a summer peak. If this downtrend is sustained pressure on sales of new model could mount. Tesla is planning to increase EV’s quarterly production to 500,000 by the end of 2022 and it is likely to increase production further after launching new production facilities in Berlin and Austin. But Tesla is not a mass market. So, Tesla fans are unlikely to pay much more to get a brand-new Tesla.

28.12.2022

The Most Generous Corporates: eBay

eBay stocks are trading 50% off their peak prices despite significant progress in key businesses that increase the possibility of an increasing turnover of the auction platform. The dividend yield of the company is at 2.2%, while its buyback yield is at an impressive 24.4%. So, the overall reward for investors is at 26.6% in 2022, a record among public corporates. eBay has bought back shares for $5.3 billion during the last four quarters. So, outstanding shares have been reduced to 551 million from 685 million a year ago.

The company is actively developing collectable trading, including an acquisition of TCGplayer, a marketplace where enthusiasts exchange their collectables like Pokemon, Magic: The Gathering and others. The most important service that the platform provides is guaranteed authenticity of the collectables that ensures the buyers will not be subject to scams and also protect sellers from any malicious fraud. eBay has recently made this service available for jewellery above $500.

The company has published strong forward guidance for Q4 2022 with turnover at $17.8 billion, revenues at $2.46 billion, and EPS at $1.06. The EPS in the Q4 2021 was at $1.05. So, considering the tense situation in the retail market this year, any figures above record values of 2021 should be considered an achievement. eBay stocks will be able to recover rapidly to their peak prices once the market reverses to the upside, and that would mean 100% profit from the current values.

11.08.2022

Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12^th position by market cap with $7.8 billion, which is 4% less than Ethereum’s market cap. AVAX prices dropped by 82% of its peak values, allowing investors to buy it at early 2021 prices. Avalanche’s infrastructure consists of three logically isolated networks, each of these with their own processing, validators, and own set of rules.

This platform is often compared to the existing internet web infrastructure with core connection protocols like HTTP, surrounded by a huge number of networks to their apps. Avalanche allow for the creation of public and private systems as a blockchain or DAG (Directed Acyclic Graph) and for the use of different virtual machines for apps, including EVM engine (Ethereum Virtual Machine) that allows Enthereum network programs to be developed.

Avalanche includes C-chain to create smart contracts that are processed on an advanced EVM engine, P-Chain that coordinates validators that process transactions and also allows for the creation and management of new subnetworks, and X-Chain which is a directed acyclic graph regulating issuance and trade of cryptoassets. DAG systems record new transactions on top of the old ones, allowing for processing speed to be increased and for capacity substantially. It is quite different to other blockchains, where transactions are compiled in blocks in order to be processed.

The advantage of Avalanche is that it provides anyone with the opportunity to create his or her own isolated blockchain with its own set of parameters, including access to apps and the programming language with which it will work. Every subnetwork can process around 4,500 transactions per second compared to 14 processed by the Ethereum network.

28.12.2022

The Most Generous Corporates: Capital One

Capital One Financial corporation shares are trading at 50% off their peak prices. This has inspired the management of the company to deliver a massive buyback program bringing the buyback yield to 19.3%. Together with 2.7% dividend yield, this has made the company one of the most generous in the market. COF shares are in great demand among investors that are focused on value stocks, such as Oakmark Fund with more than $45 billion in assets under management.

The specialisation of Capital One is mostly credit cards, auto loans provided to substandard borrowers, or in other words, people with high credit risk profiles. This business is highly profitable, although it does bear high risks too. The company says it has a reliable risk assessment model in place to run the business. The lender generates not only higher margins compared to its peers, but overruns regulators’ requirements of capital adequacy with 13.6% vs required 6%. Considering these criteria, the company is in line with some of the largest banking institutions in the world, like JP Morgan with 14.1% and the Bank of America with 12.8%.

The company’s capital base, which is built on clients’ deposits, is enough to conduct high-margin lending. Such a model of cheap resources is not only profitable but it is also stable. Capital One has a margin of 10-15% on its tangible equity. The interest for the company’s services is unlikely to decline in the foreseeable future considering the current economic environment. So, COF shares could be selected for long term investments with the upside potential of 30-40% once the market starts recovering.

24.11.2022

Major Risks for Tech Giants: Apple

Apple stocks have had a very impressive performance amid a clearly bearish market while losing only 20% of their peak values. However, investors should be prepared for elevated turbulence in these stocks considering the situation in China.

China’s zero-tolerance policy to COVID-19 led to a massive exit of employees from Zhengzhou city plant amid fears over tightening curbs. Over 200,000 workers are rumoured to have left the plant. If this is true, the production of iPhone 14 Pro and iPhone 14 Pro Max would be very complicated with no clear outlook on when it could be resumed. The delivery delay shown on Apple’s website has already hit six weeks. Americans who ordered the brand new IPhone for Thanksgiving Day will only receive it for Christmas now. Meanwhile the last two months of the year are very valuable for any mass-market company in terms of holiday sales.

Apple is planning to move iPhone production to India. But that would require years. The company has already invested $75 billion in the Chinese market and now this investment may be at risk as the ruling Communist party in China may put a local ban on the sale of Apple products. China is the third largest market for Apple with the United States at the first place with $153 billion and Europe at the second with $95 billion. Wall Street is expecting Apple’s earning to go up by five percent over the next three years. So, any troubles with production in China may alter these forecasts.

Rafael Quintana Martinez

Money Manager de alto rendimiento, con una sólida formación académica, profesional y de campo. Más de 9 años de experiencia especializada en el comercio de mercados financieros internacionales. La devoción, la fiabilidad, la responsabilidad y la ética impulsan mi vida. Actualmente me desempeño como Analista Senior para Metadoro. https://metadoro.com/es https://mx.investing.com/members/contributors/235587671/ https://es.tradingview.com/chart/EURUSD/rE9gVips/

15.11.2024

Dogecoin Is Losing Momentum

Dogecoin (DOGE) surged by 35.5% to $0.3689 this week, retreating from a peak of $0.4394 reached on November 12. The Trump-driven rally in the cryptocurrency market propelled DOGE to remarkable highs, with the token posting an extraordinary 188% increase at its peak. The market euphoria was fueled by Donald Trump’s presidential victory and the appointment of Elon Musk as head of the newly formed Department of Government Efficiency (D.O.G.E), alongside Vivek Ramaswamy, who had endorsed Trump after withdrawing from the Republican primary.

The recent explosive rally has left investors cautious, as Dogecoin reached a strong resistance level at $0.4000. A retracement appears likely, with the next significant support level at $0.3000.

DOGUSD

MetadoroIn-house analytics

15.11.2024

U.S. Dollar Index May Break Above 107.50

The U.S. Dollar rally got held up at a roadblock near the key multi-month resistance. The common measure of the Greenback's strength against a basket of other major currencies was last seen above 107 in November 2022, and it came very close to passing the barrier this week. An intraday technical retracement below 106.50 was launched on Friday, November 15, due to a profit taking after climbing from under 103.50 since the beginning of the month. However, there are compelling fundamental reasons for keeping or even extending the upside pressure after a short interruption. A possible break through 1.0750 later may challenge the area between 110 and 112.

The impact of so-called Trump trades related to tariff fears outside the U.S. is an essential but not the only driver behind the gathering force of a Dollar "cyclone", as market traders also have to relive certain monetary considerations. The Federal Reserve chair Jerome Powell on Thursday night confirmed that the U.S. economy "is not sending any signals that we need to be in a hurry to lower rates". He rationalized that by saying that the strength the central bankers are currently seeing in the labour market gives the ability to approach their decisions more carefully, as the "battle against inflation" remains ongoing. And the latest set of raw data on the consumer price index (CPI) two days ago were exactly in favour of his assumptions, as the CPI rose to 2.6% YoY in October from 2.4% in September, even though it provided a highly expected 0.2% increase MoM in line with the previous month's moderate increase. The U.S. Dollar clearly accelerated its race against the European single currency and the British Pound, as well as the Japanese Yen and the Australian Dollar, immediately after the CPI release, as markets have found evidence for a deceleration in the pace of interest rate reductions.

Nearly 80% of futures traders on Chicago Mercantile Exchange (CME) now expect another 0.25% move down by the Federal Reserve in December and further 0.25% moves to ease the monetary policy in the beginning of 2025. Bets on a December rate cut to the 4.25%-4.50% range saw a substantial rise from the roughly 60% chance priced in before the consumer inflation data release. Broad expectations are that the Federal Reserve may stop or pause its rate cuts as soon as the policy range would be lowered to between 3.75% and 4%. More careful loosening of the interest rate noose helps the U.S. Dollar to strengthen, as most of the currency traders previously relied on a premature concept of faster rate cuts due to recession risks. Jerome Powell referred to the current monetary moves as only "an appropriate recalibration of our policy stance", being aware of the "risks of moving too fast or too slow" on rate cuts. "We know that reducing policy restraint too quickly could hinder progress on inflation. At the same time, reducing policy restraint too slowly could unduly weaken economic activity and employment," Powell argued.

In addition to touching 2-year highs for the U.S. Dollar index after Donald Trump's victory to carry on with potentially inflationary import tariffs, the Federal Reserve's response is another driver for the stronger Dollar to come. Meanwhile, the S&P 500 broad market barometer also retraced to 5,900 area after Jerome Powell's comments, though we see the impact on leading Wall Street stocks remains limited. This would barely impede the further development of the ongoing bullish rally on equities.

Rafael Quintana Martinez

14.11.2024

Bitcoin May Suffer from Overheated Rally

Bitcoin (BTC) has risen by 14.4% this week to $91,200, retreating slightly from a new all-time high of $93,378 set on Wednesday. The Trump-driven crypto rally, which saw Bitcoin surge by 36% since the U.S. presidential election on November 5, appears to be losing momentum as the initial excitement fades.

Options market data points to a projected upper limit of $90,000-100,000 per coin by the end of 2024. While another push toward $100,000 remains possible, the growing presence of retail investors leveraging their trades raises concerns about the rally's durability. Any unexpected negative developments could act as a shock to the market, potentially triggering a significant and painful pullback.

BTCUSD

Bash

13.11.2024

Bought Expectations, Going to Sell Facts. Part II

I believe that Elon Musk may benefit much from his heading up a proposed Department of government efficiency, but the electric-car-building owner would hardly participate in any kind of direct lobbying for Tesla business. I admire him as a great influencer of common sense in this growingly insane world, and I am sure he is able to drive a drastic turn to efficiency in bloated federal agencies. Again, Tesla is less dependent on tax credit for selling electric vehicles as other representatives of the industry, so that his brainchild company may more easily survive in case of regulatory changes in this field. Yet, I am not so sure that Tesla benefits from the whole situation cost more than a $250 to above $350 price jump in a nearly one week period, not to mention the stock is now soaring more than 60% compared to its recent retracement dips below $215 per share in the second half of October.

As I wrote before, Musk's projections for a 20% to 30% pace of growth was very cute, but the current level of it corresponds to 6% YoY. Elon also said it's "pointless" to build a $25,000 Tesla for human drivers at the moment, but it is a good question if a newly presented fully autonomous car can be available for this price, or if it will be more expensive because of the mostly inflation-driven environment. I love my stake in Tesla, but even my recently adjusted range for Tesla share price rise has been surpassed by far, when the stock entered a $350+ area. And I sincerely don't like such kind of volatility when the stock tries to erase 6% to 8% of its recent gains, as happened a day before when Tesla price adjusted according to several doubts, even though it climbs 3% to 5% again the following day. Therefore, I just made an easy decision to take profit partially here and now to half the volume of my current position in Tesla.

Beginning today, this means I converted half of my previous stake into cash, leaving the other half of it in persistent hopes for further mid-term gains. Markets still emanate unbridled optimism on Tesla prospects, which may send the stock higher than $400, yet I cannot exclude the possibility of another wave of a strong bearish correction for Tesla that happened not once or twice after reaching new stratospheric heights.

TSLA