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21.03.2024

The Fed Tricked Us by Making Our Minds Even More Bullish

Encouraging verbal signs and interest rate path projections after the Federal Reserve meeting last night clearly provided greater support to the broad S&P 500 indicator than to its leading core consisting of the AI-related businesses. The S&P 500 just ended the regular session on March 20 by nearly 0.9% higher to close above 5,200 points for the first time ever and then added another 0.5% in the pre-market trading today, while most AI-leaders, including NVidia and AMD, stood in the vicinity of their previous heights. At the same time, even some stocks that were lagging behind in recent months like Tesla (+2.5%) or banking stocks cheered up more visibly. The Bank of America added 2% in one day, as an example. Several consumer discretionary stocks rose too. A very much understandable effect, as the AI core, or tech stocks at the bigger picture, represented a major group, which successfully climbed upstairs even without any doping help from central bankers. Meanwhile, most stocks need stronger pillars like lower borrowing costs and soft landing hopes to grow further. And so, the market has been granted that wish.

Surely, the Fed left its fund rates steady for the fifth time in a row, yet it mentioned three "planned" rate cuts before the end of 2024. The chair Powell said before that March was "too soon" to have "enough confidence" from incoming economic data to cut rates, but now most investing houses are betting for June. The Fed also saw more rate cuts to drop to 3.9% in 2025 and 3.1% in 2026. For me, they are using a kind of gaslighting tactic, as initially they pushed the market to suppose up to six rate cut moves this year. In fact, the Fed did zero moves, while inflation is trending up again, and so the Wall Street is now happy with only a suggestion of three rate cuts soon. This is not dovish yet is perceived as being dovish. That was a neat trick with our minds yet it worked well to make almost everybody keep bullish positions. This happens exactly when most households and business owners continue to suffer from too expensive credit money, yet this would not prevent mega caps and now broader markets to enjoy new peaks. Well, all of us will work with what we all have, still expecting the S&P 500 at 5,500 or so in few months. And I will buy and hold when others are buying and holding, why not?

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.

12.04.2024

CarMax Is More Committed to Innovations But Market Conditions Make It Sinking

CarMax (KMX) quarterly report came out on April 11, vividly displaying why any immediate investment into the used car market still sounds like not a good idea. The stock quickly lost ground, wasting a double-digit number of percentage points as a response to its net income drop to $0.32 per share against $0.44 cents per share a year ago, also compared to much stronger $0.52, $0.75 and $1.44 per share in the previous three quarters. Analyst polls estimated a net income per share at about $0.50, which would be 56% better than the reality.

This almost looks like a financial fiasco in the company's efforts to withstand slowing demand in the segment. CarMax Q4 2023 revenue decreased by 1.7% to $5.6 billion, slightly below consensus expectations of $5.8 billion, indicating the lack of gross marginality of the business. This happened even though the total supply of unsold used vehicles on dealer lots grew by 9% YoY to 2.27 million units in March, according to Cox Automotive data. CarMax CEOs delayed their own goal of selling over 2 million units annually, when measuring combined retail and wholesale actions, to between 2026 and 2030, from its prior target of 2026.

A "higher-for-longer" Fed fund rates is demonstrably bad for car sales volumes, be it new generation Tesla cars or just pre-owned vehicles, while operating costs for warehouses are growing. Besides, easing some semiconductor constraints in North America may help marginally improving orders for new cars, leaving used-car sales under the same pressure. Meanwhile, the entrance of Asia players offered significant discounts. Therefore, North American and European operators of the used car market need to sell many great cars at cheaper prices. CarMax already posted its official warning of a potential "hit to profit-sharing revenue" due to inflationary impact to its partners, before last Christmas. "While affordability of used cars remains the challenge for consumers, pricing improved during the quarter," Enrique Mayor-Mora, executive vice president and CFO admitted.

It was only a smaller division of CarMax Auto Finance, which managed to get a 19% better income due to "a lower provision for loan losses" and an increase in average managed receivables. Yet, this was rather news from the side business, which was clearly not enough to be optimistic. The company added that it is now focused on enhancing its omni-channel experience and leveraging data science and automation. Carmax said it delivered "strong retail and wholesale" graphic processors, which helped to increase "used saleable inventory units" more than 10%, but used total inventory units was unchanged despite innovations. The company seeks to achieve efficiency improvements in its core operations, believing that they "are well-positioned to drive growth as the market turns", according to Enrique Mayor-Mora. This may be useful to strengthen competitiveness in better times for the segment. Yet, the current challenges are too heavy to be ignored by market crowds.

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.

12.05.2022

Perspective ETFs in the ESG energy segment: Invesco Global Clean Energy Portfolio ETF

This ETF invests in green energy ventures. The pandemic led to a 300% increase of its share price. But since the beginning of 2022 they have lost 30%, twice as much as the S&P 500 SPY ETF. The net capital which has outflown from the Fund has reached $31.5 billion over the last 12 months, while the major outflow was recorded in December 2021. However, its shares are still seen to be overbought as P/E multiplier is at 24 that is well above the average of 20 for the EFT’s that are linked to the S&P 500, while the dividend yields are above PBD’s numbers.

Inflation in the United States is rising negatively affecting all shares with a high P/E ratio. So, we may expect a further decline of the PBD share price and other similar assets that cannot be protected from rising risks. Traditional energies are looking more attractive on this background and could be a perfect hedge asset amidst geopolitical uncertainties.

MetadoroIn-house analytics

10.06.2025

Will Target Restore Its Status of a Value Stock?

Shares of Target (TGT), the seven-largest big-box retailer in the U.S., which is well known for its trendy yet affordable range of everyday items, have surfaced back from below the $100 water line after rising by 3.5% on June 10. This happens despite recent price hikes leaks from the U.S. consumer segment, which could form potential headwinds for further bounce of the stock. Walmart and Target employees were reportedly sharing photos of some toys' sticker prices up to 40% higher than previously, according to observations of social media sources since early June.

Keeping prices as low as they can for as long as they can was the pillar for holding consumer visits high but restrained retail margins on limited levels. While Walmart was doing much better thanks to e-commerce, Target was focusing on fast deliveries with offline sales still prevailing, which did not allow the chain's profits to grow at a sufficient pace. Again, Target traditionally has greater exposure to discretionary goods than groceries or other essentials compared to its rivals. All this led Target shareholders to face a decline of stock prices by approximately 30% since the beginning of 2025, on even higher concerns to follow its Q1 earnings report on May 21, when Target missed consensus estimates with EPS (equity per share) of $1.30 vs $1.65 expected on revenue of $23.85 billion vs $24.35 billion expected. Net sales were down 2.8%, comparable sales dropped by 3.8% YoY, and the stocks continued to dive. But on the positive side was a delayed "prize" that Target CEOs maintained their full-year guidance of $7-$9 for EPS despite all the listed challenges.

Investing crowds now may get the sense that very selective price hikes in hypermarkets can bring more profit margins in some key problem areas of trans border supply without alienating the bulk of loyal visitors at the same time. The U.S.-Sino trade talks began being extended into the rest of the week. Wall Street hopes the trade progress will help retailers in avoiding larger import cost increases. Overall, the tariff shock to U.S. stocks is now lessening if not fading, which is providing support for consumer staples firms, including Target. The current moment could be very good for a rebound with an improving bullish momentum if Target shares break the immediate resistance barrier near $105.

Target management is doing a number of things to boost confidence, including launching 10,000 new summer items, expanding brand collaborations as well as improving its image in eyes of ordinary and rather conservative families by pulling back all long-held DEI (Diversity, Equity, Inclusion) agenda initiatives like retracting its support for NYC Pride this year, even though Target still trotted out its annual Pride merch collection for not to miss queer customers. Target swapped out rainbow flags to stars and stripes during the Pride month. Whether all those measures will ultimately have a good or bad effect on sales, we will soon find out, but it seems that investors anticipate improvements in financial indicators before the end of the summer season, which is translated in sentiment already. A 54-year dividend increase streak also looks impressive. Target announced its major strategic initiative of a multi-year Enterprise Acceleration Office to improve its operational effectiveness, simplify internal processes and better leverage technology and data. This roadmap for growth could help improve earnings and restore the stock’s value as a consequence in the longer-run.

If only the stock would break through $105, it could accelerate further climbing ahead of the company's next earnings call on August 13. Some investment houses are improving their projections on Target, but there are hidden caveats within them. As a good example, analyst John Heinbockel at Guggenheim cut his price target for Target stock to $115 from $155, while still maintaining a Buy rating, saying, “challenging fundamentals have prevailed over a modest valuation during the past year”. As everyone surely understands, $115 is much lower than $155, so it seems like the mid-term goals have been lowered, but maintaining the fund's recommendation to Buy even up to achieving $115 per share still means Buy, because even $115 per share is almost 10% higher than current prices for Target. Some analysts also cite potential buyback efforts. Wall Street's pool of experts has a Moderate Buy consensus rating on Target stock, which is now based on 10 Buys, 20 Holds, and only 1 Sell recommendation.

TGT

2413

Bash

10.06.2025

Tesla Bulls Always Come Home Early

Well, things are going on exactly as I wrote six days ago: "Tesla has fallen to almost $275, but I bet in a couple of weeks, if not a couple of days, it will be worth $50 more". Three business days later, Tesla closes above $325. That's it. Tesla bulls are always come home early! Good luck to everyone who kept faith in me and Tesla. And who dared to invest in suddenly discounted Tesla for a quick profit, of course.

TSLA

2257

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/

10.06.2025

Ethereum Classic Is Looking to the Upside

Ethereum Classic (ETC) is up 4.2% to $17.80 this week, outperforming the broader crypto market where Bitcoin (BTC) has gained 2.9% to $109,388. The recent Olympia update, which increased inflation on the ETC network, has been viewed as a positive catalyst and sparked a 30% rally to $20.96 in early May. The subsequent pullback appears to be driven more by broad market sentiment than by any ETC-specific weakness. With Bitcoin nearing its all-time high of $111,995 and signaling a potential breakout, conditions are favorable for ETC to revisit the $20.00 level and potentially push higher toward $25.00.

ETCUSD

2344

Bash

10.06.2025

No Disregard to Laggards. Part 2.

Another company that is in a similar situation to AMD, both technically on the charts and fundamentally in terms of business is probably Applied Materials (AMAT). AMAT's major customers include Taiwan Semiconductors, Samsung Electronics and Intel, among others, so it is well diversified in terms of partnerships. Not being tied to only one gadget or semiconductor manufacturer, but working with different ones. AMAT's main markets include China, Taiwan, South Korea, the United States, Europe and Japan, and so it is geographically integrated into different regions of the world. AMAT also produces components for such giants like Apple, which has been slightly losing ground on the Asian market in the last year, but an important advantage of AMAT in this aspect is that AMAT is not exposed too much to any of its large partners, even including non-critical exposure to Apple. However, the recent developments in trade talks between the United States and China have given hope to shareholders of this company with its global presence in various markets.

AMAT shares have not yet come so close to their May 15 peak of $176.38, which is technically similar to the $120 area for AMD. However, the technical patterns of the last five or six weeks look so similar on the AMAT and AMD charts that it seems only a matter of maybe another 10 or 20 days before the two companies reach roughly the same growth rate. AMD is up 4.8% after the weekend, while AMAT is up only 1.8% so far, but the chart analysis showed that AMAT also has more to come. As soon as AMAT rises to $180, its further horizon will open immediately to the next nearest target price of at least $200.

Still, waiting for a move higher to $180 before ramping up investments in Applied Materials seems like an important addition, as analysts at Morgan Stanley freshly upgraded Applied Materials to Equal-Weight from Underweight, citing "de-risked outlook" for China but warning that weakness in leading-edge logic and DRAM remains a concern heading into 2026. Morgan Stanley sees revenue from China and ICAPS chips (which stands for Internet of Things (IoT), Communications, Automotive, Power and Sensors), a segment catering to mature semiconductor nodes, "stabilizing through October 2025 but not recovering". Another risk is decreasing forecasts for foundry logic and DRAM (Dynamic Random Access Memory) investments, which weighed on overall estimates. Morgan Stanley now expects Applied Materials’ DRAM revenue may fall 5% in FY25 and 12% in FY26.

AMAT

2307