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04.08.2022
Ethereum’s Most Important Update

ETH is a native token for the Ethereum blockchain and is one of the two most reliable digital assets in the market along with Bitcoin. Ethereum is the first platform that became a hub for thousands of blockchain apps and other digital solutions. The recovery of ETH prices to November 2021 peaks at $4,900 would bring investors 190% profit.

Second layer solutions (Layer2) were introduced to improve stability and effectiveness of the Ethereum blockchain. These are blockchain network add-ons that are added on top of the primary blockchain. The most popular add-ons are Arbitrum, Loopring, Immutable X, and Polygon that have recently partnered with Meta (Facebook owner). In other words, the Ethereum blockchain network has a much broader use than the native blockchain itself.

Ethereum developers promise to release a new Proof-of-Stake (PoS) consensus protocol in late 2022. This protocol will allow miners to stake tokens to a special deposit to mine blocks. Some networks within the Ethereum blockchain have moved to PoS protocol this summer, while others are expected to move to this protocol in the middle of September.  This move will allow for the increase of processing capacity of the network to almost 100,000 transactions a second from the existing 30 transactions and lower commissions. This would also allow for ETH to switch to the deflation model when coins are algorithmically burned, while some coins would be removed from circulation as they would be blocked by staking - more than 13 million ETH or 10% of overall coins in circulation are blocked by staking. The problem is that coins are blocked for a long period of time and cannot be sold or exchanged for fiat currency.

26.04.2023
Diversification Inside Tech Sector: Taiwan Semiconductor

TMS is the most valuable semiconductor producer in the world. Its stock went down by 40% during the recent market correction, and rebounded slightly after a strong Q1 2023 earnings report. The company reported an operational margin at 45.5% as production of 5 nm and 7 nm chips is increasing. The company continues to generate profit despite decreasing demand for personal computers after surging during the pandemic in 2020-2021. Its financials are looking much stronger than its major peer Intel. In the worst-case scenario TSM’s operational margin is expected to decline to 40%, while Intel is expected to deliver a 39% operational margin with a negative net cash flow in Q1 2023. Taiwan Semiconductor is planning to spent between $32 billion to $36 billion on CAPEX this year, while Intel has cut CAPEX to $20 billion despite being 30% co-funded by the U.S. government.  On the negative side, the company is quite vulnerable to geopolitical risks as tensions between China and Taiwan are mounting. Although, it is hard to believe that Beijing will take the island by force, these threats could not be discounted. China is building its image as a global peacemaker while promoting its roadmap to establish peace between Russia and Ukraine, and the recent China-brokered agreement between Iran and Saudi Arabia. Economic ambitions of China are also a major hurdle for a military solution of the long-lasting conflict as the destruction of the chip production facilities of TSM will make such military operations pointless in the economic sense. In other words, TSM stocks may interest very optimistic investors that are seeking extra profit amid recovering demand for chips in the second half of` 2023.  

16.06.2022
Not Every Tech Stocks are Equally Strong: SAP

SAP stocks have lost 30% since the beginning of 2022. The German tech company develops enterprise software and solutions to manage business operations. For example, one of its services can be used  to manage all business travel financial activities and related spending. In other words, it is quite a routine company with  a stable and strong cash flow. Once SAP software is installed on a corporate level it is hard to do without it as it is deeply integrated into the business core processes. Moreover, SAP is restructuring its business model around its subscription base and this will allow for cash flows to be even more predictable and balanced through the financial year. Such a model is in favourable to Wall Streel investors.

The war in Ukraine has a 300-million-euro negative effect on SAP business, and it is only a marginal 1% of the overall revenue base for the company, while its dominance in the ERP segment is secure. The revenues added 11% year-on-year to 7.08 euros in Q1 2022. The revenues grew by 6% in  Q4 2021.

The company has made some successful M&A deals, acquiring Qualtrics, a cloud-based subscription software platform, that delivered +48% revenue in Q1 2022. This company had a gross margin above 90% in 2021 while SAP’s gross margin was at 70% for the same year.

SAP management promised to triple its cloud-based business by 2025, and boost revenues to 22 billion euros, while operational profit is forecasted to grow by 40% from the current 8.4 billion euros. This is a very extensive growth for the company that has a high P/E ratio at 17. The company may not perform very high growth rates as its younger tech sector peers, but it may certainly recover to new all-time highs in the long-term perspective. However, the sector may require several quarters to recover, and the recovery would be headed by such reliable companies as SAP with a low risk profile.

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.

15.09.2022
Safe Haven Assets for Long-Term Investments: Broadcom

Broadcom is an American semiconductor and infrastructure software development company. Soon it is expected to close a merger deal with VMware, a cloud computing and visualization company, that will open new cross-sales opportunities for Broadcom to boost its revenues. Broadcom stocks are now 25% off their peak values.

According to the Q3 FY 2022 financial report that ended July 31, consolidated revenues grew by 25% year-over-year to $8.46 billion, and EPS went up by 40% to $9.73 per share. The semiconductors segment, that added 32% year-over-year, was the primary driver for the company’s profit. The company’s free cash flows (FCF) topped $4.3 billion, allowing it to spend $1.7 billion on dividends and 1.5 billion on the shares repurchase program. The company is planning to continue spending at least 50% of FCF on dividends that added 43% every year on average since 2016. 

According to the Q4 FY 2022 forward guidance, the company is expecting its revenues to go up by 20% year-over-year to $8.9 billion and for EDITDA to go up by 25% to $5.6 billion. Broadcom has great experience in expanding its product portfolio by M&A operations, and apparently it will continue on this way. The company is also expected to benefit greatly from the $52.7 billion CHIPS bill in the United States.


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/
Dash Is Deteriorating

Dash (DSH) is trading flat at $45.03 this week, underperforming the broader crypto market as Bitcoin (BTC) climbs 4.4% to $107,179, approaching its all-time high of $107,773. While Dash showed initial strength on Monday, its rally was short-lived, following a sharp 44% correction to $40.06 between 5th and 10th December.

Last week, Dash attempted to break above the $50.00 resistance level but failed to sustain momentum. Unlike other altcoins, Dash appears unresponsive to Bitcoin’s push towards new highs, which may reflect its substantial 222.0% rally in November.

The altcoin has yet to establish a clear resistance within its current uptrend, making it difficult to identify precise upside targets or potential entry points at this stage. For now, Dash remains in search of a defined structure to support further gains.

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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/
Going Long on Xerox Rebound

Xerox (XRX) shares have been in a downtrend since March 2021, having lost 68.0% to $8.72 during this period, and even fell by as much as 70.0% at one point in early November. This represents a very sharp decline. However, each time the price reaches trend support, it tends to rebound by 20.0-30.0%. This pattern appears to be repeating now, as XRX has retested the support level and looks poised to continue its recovery. The upside target is set at $11.00-12.00. I plan to open a long position at $8.50-9.00, which presents an enticing upside potential of 30.0% that should not be overlooked. A stop-loss can be placed at $6.00.

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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/
Fantom Upside Potential Is Seen Depleting

Fantom (FTM) is up 2.2% this week, trading at $1.3890, mirroring the broader crypto market where Bitcoin (BTC) has gained 2.0% to $104,800, retreating from its record high of $106,664. FTM recently set a 32-month high at $1.4765 but faces overbought conditions while attempting to hold above the $1.4000 resistance. The token’s upward momentum could push prices to $1.6000, though further gains appear unlikely unless Bitcoin surges to $110,000, which would support a more extreme rally in altcoins.

2709
The Dollar Is Picking Up Steam

The Greenback is set for the third consecutive month of growth, as the U.S. Dollar index to commonly weigh the world's major reserve currency against six others already climbed from nearly 100.5 on last day of September to above 107 by mid-December. The European Central Bank's and the Bank of Canada's decisions to lower interest rates by a quarter-point to 3.00% and by a half-point to 3.25%, correspondingly, certainly made a definite contribution to the U.S. Dollar rally, as well as the European Central Bank head's notice that some policy-setters had proposed a larger, 0.50% cut, with the door clearly opened for further cuts. China's stimulus measures agenda against the country's deflationary flags and global trade war ghosts taking shape under incoming president Donald Trump also work beautifully to the advantage of the U.S. currency dominance. The downside economic risks in the Eurozone and some other regions are here. However, the Federal Reserve's (Fed) cut-now-and-then-wait signals presumably have played a central role in further drop in EURUSD, GBPUSD, AUDUSD, NZDUSD, as well as a sharp increase in USDJPY.

The U.S. Dollar-nominated borrowing costs are still higher, with futures traders on CME pricing a more than 95% chance of decreasing the Fed's target range by 0.25% to 4.25%-4.50% next Wednesday, December 18, but only a 20.7% chance of another one dovish step at the end of January. March 19 March could be the next sticking point for further small rate cuts, yet that cannot be taken for granted, as only 60% are ready to bet on this rate cut scenario for the first half of 2025, according to CME's FedWatch tool. As an example, San Francisco Fed president Mary Daly, represented this typical mind-set this week by saying that she was "comfortable" with possible cutting rates in December, but having "a more thoughtful and cautious approach" on further reductions. Partial and normally intraday retracements above 1.05 in EURUSD due to a profit-taking activity before the end of the week should not lead anyone astray about the general direction on the foreign exchange market.

Such episodes of pointless price movements are seemingly reminiscent of a rather controversial initial response of the crowd of traders to the U.S. non-farm payrolls on the first Friday of December. The latest slice of the U.S. labour data, including 227,000 new jobs after suddenly declining to 36,000 a month ago, and a 0.4% average hourly wages surplus in November to lead to a stable 4.0% growth of personal earnings YoY, are solid pro-inflationary arguments to stop the Fed's policy makers from drastic steps. A small nominally rise in the unemployment rate from 4.1% to 4.2%, with a dip fear of being too late to prevent sliding into recession in the future, are the only drivers for the Fed to keep cutting rates. Therefore, the spike in EURUSD to nearly 1.0630 on the labour data set of December 6 was only a good excuse for selling this uptick to pressure the single currency below 1.0550 during the same trading session and then to drop to the area around 1.0450 in the next few days.

We suppose the market would deal in a similar way with some current upticks above 1.05. Thus, the next target range for EURUSD looks to be between the annual low of 1.0332 and 1.0375, with a retest below 1.25 as a basic scenario for GBPUSD. More annual dips for the Aussie and Kiwi, as well as fresh highs above 1.45 in USDCAD, are widely expected by year-end.

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