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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. 

11.08.2022
Perspective Peers of Ethereum: Avalanche

Avalanche is ranked by Coinmarketcap at the 12th 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.

24.11.2022
Major Risks for Tech Giants: Tesla

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.

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.

Chasing Tech Race

The Santa rally in tech stocks is already here, with the composite index of more than 3,000 stocks listed on the U.S. Nasdaq stock exchange outpacing the Dow Jones industrials since the beginning of December. It scored a historically record closing high at nearly 19,404 this Monday and managed to set the next intraday peak above 19,450 today. A data set since 1928 shows December as the best performing month of the year, with broad market barometers of Wall Street rising 74% of the time, yet this tendency is even more clear In presidential election years, when December provided gains 83% of the time. What also sounds pretty good is that statistically the strength in December usually extends into January. The only thing, which is typical for such presidential election years, is that the closing month is often characterised with an increased accent on activity during the first ten trading sessions but could be somewhat weaker before the ending days. It's easy to conclude that a reasonably hurried type of the pickup strategy for leading tech giants looks to be an appropriate response to fresh challenges. It is always better to buy still relatively cheaper and then hold longer than to try to chase rising prices later following the bullish trend.

Indeed, some market caps record holders are now setting the tone to give an aerodynamic shape to the quickening move up. Shares of Apple (APPL) has a winning streak consisting of seven consecutive days, so that a previously lagging iPhone-maker climbed onto its newfound top levels well above $240. Microsoft (MSFT) added almost 5% in its market value in a similar seven-day trip, with more than enough space to drive it further upstairs, keeping in mind a still existing discount for the stock compared to its all-time record pricing of July. Meta Platforms (META), which is the owner of Facebook, Instagram and WhatsApp, climbed by more than 5% for the last two days on growing advertising monetization hopes to touch an uncharted territory above $605 per share, while an average 12-month price target by the analyst community is located at $649, but we feel it could easily be achieved long before the end of this winter, if not before Christmas. A second wave of positive response to Q3 quarterly reports released by Amazon (AMZN) and Google (GOOG) in November could also be mentioned in the first page of Wall Street's record book of 2024. Actually, the whole market just creeps higher, but the list of the mentioned tech giants is now the first priority in our concept of how to earn on stocks, as we are seeking for a better risk/profit ratio.

Wedbush analysts are citing positive catalysts including deregulation under Donald Trump’s second term and the “AI revolution" helped by a "$1 trillion+ of incremental AI cap-ex over the next 3 years” as a proper base for 20% or more surge in the tech sector in 2025. In a client's note, Wedbush emphasized that AI initiatives are going to emerge from the Trump administration, so that it could be "substantially" favourable for major tech companies such as Microsoft (MSFT), Amazon (AMZN) and Google (GOOG), with the Department of Defence and other federal agencies "playing a pivotal role" in boosting AI development, positively impacting "companies like Palantir (PLTR) and Oracle (ORCL)". “While the Inflation Reduction Act would see some major changes/revisions under a Trump Administration which would be a negative for Intel (INTC) and others, the focus on AI will be front and center in our view and benefit Big Tech,” the group of analysts said, adding that the potential departure of Lina Khan from the Federal Trade Commission (FTC) is "seen as another positive development for the tech industry" to catalyse more deal flow and remove a significant barrier that has challenged tech sector deals, "including the recent broader investigation into Microsoft (MSFT)".

Again, according to Wedbush, Tesla's (TSLA) "unmatched scale and scope" will give it a "distinct competitive edge" in a non-subsidy EV market after the removal of tax incentives and rebates, while higher tariffs on China imports will "hinder" Chinese EV manufacturers from entering the American market, further benefiting Tesla (TSLA). Moreover, accelerating some of Tesla's (TSLA) full self-drive initiatives are expected once Trump is in the White House. As Tesla (TSLA) maybe looks a bit overbought right at the moment, its futures prospect for the second half of 2025 seem to us very promising.

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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/
Altcoins Could be on a Final Run

Ravencoin (RVN) has surged by 13.3% this week, reaching $0.0322, significantly outperforming the broader market as Bitcoin (BTC) slips by 0.7% to $94,735. Over the past two days, Ravencoin's price climbed 24.8%, peaking at $0.0333—the highest level since April 26. Despite this strong performance, other altcoins have posted even more remarkable gains, with Ripple (XRP) leading the pack. XRP has delivered an extraordinary 450% surge since the start of November, including an impressive 33.0% increase in the last three days.

This altcoin rally stands in contrast to the performance of Ethereum (ETH), the major benchmark for altcoins, which has declined by 3.3% to $3,609 over the last two days. Market speculations suggest the possibility of "mad whales" driving the surge, but such activity may also indicate an overheated rally that could be nearing a potential correction.

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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/
Microsoft Is Ready for a Breakthrough

Microsoft (MSFT) stocks have underperformed compared to the other members of the "Magnificent Seven," which saw gains of 24-70% in 2024. Meta Platforms (META) led the group with the largest growth, while Alphabet (GOOG) posted the smallest increase. Microsoft, however, lags behind even Alphabet, with only a 15.0% rise in its stock price this year. This underperformance highlights significant upside potential, further supported by technical indicators.

Currently, MSFT is trading within a narrowing range, a pattern often indicative of building momentum. This setup could propel the stock back into its ascending channel, with the first target seen at $470-480 per share, where uptrend support aligns. For risk management, a stop-loss order could be placed at $385, providing a balanced strategy for this potential breakout opportunity.

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B
The EU Flagships Rush in Pursuit of Wall St

Markets of the Old World were far from proceeding at a high pace after peaking early in April. However, a day is going to come when some European assets will make up for their previously lost ground. The futures contracts for difference (CFD) for the Euro Stoxx 50 index composed of blue-chip stocks from all leading countries in the Eurozone eventually pushed upward after springing off the psychological support around 4,750 points. The major health barometer of the EU investment sentiment added 0.86% this Monday to approach a 4,850 area for the beginning. Shares of Hermes (+4.75%), Adidas (+3.18%), Munich Reinsurance (+2.93%), Inditex (+2.87%), SAP SE software and business management solutions (+2.73%), Siemens (+2.71%) and BMW (+2.66%) were seen among the best performers of the day, with a Germany-based SAP SE (+65.0%), an Italian multinational banking group Unicredit (+49.3%) and a Dutch-rooted e-commerce operator Prosus (+43.1%) being the top-3 companies in terms of year-to-date price gains. One of my favourite stocks, Airbus Group (AIR), gained for the fourth consecutive days to conquer its €150 barrier.

Rosy prospects for stakeholders and index investors are distinctly noticeable due to the European Central Bank's (ECB) clearer intention to continue cutting borrowing costs before the year-end. A few comments from the Governor at the Bank of Greece and one of the ECB policymakers Yannis Stournaras provided the European bulls with a stark reminder of the regulator's currently firm stance. At the very first working day of the month, he shared a view that the ECB "will continue cutting interest rates in December". This remark freshly made at a conference in Athens luckily coincided with new historical highs in the S&P 500 broad market indicator of Wall St above 6,050, as well as in the tech-heavy Nasdaq Composite during the same trading session. Such synchronization is fundamentally removing the last obstacles for the Euro Stoxx 50 to pave the path for the higher goals, supposedly above 5,100 points, in its simultaneous Santa rally with the US indices, which appears to have already started. Even Trump's tariff threats seem to be powerless to revoke this wave of optimistic mood.

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