Investors Should Be Watching Guidance During This Earnings Season

Earnings season kicked-off on Tuesday with concerns over the lingering trade dispute between the United States and its trading partners in China and the European Union, taking a backseat, at least temporarily.

According to FactSet, S&P 500 second-quarter earnings are expected to grow by 20 percent. This would put them in a position to challenge the 24 percent jump reported during the first calendar quarter.

On Monday, the first day back from the extended Independence Day holiday, the blue chip Dow Jones Industrial Average posted a more than 300 point gain, mostly on the back of a strong financial sector, led by bank stocks.

It’s fitting that the banks finished the strongest because they benefit the most from a rising interest rate environment.

Today’s price action is being drive early by the results of more than 20 companies in the S&P 500 Index. The surprise of the day so far has been the results of PepsiCo. The soft drink and snacks manufacturer posted better-than-expected earnings, sending its shares higher by more than 2 percent. PepsiCo also provided positive guidance, saying it expects “substantially higher” earnings growth for fiscal fourth quarter.

While Pepsi came out hot right from the box this morning, other companies should be overlooked. According to The Earnings Scout CEO Nick Raich, 86 percent of the companies that have already reported exceeded their quarterly earnings expectations, posting 24.08 percent year-over-year growth.

Raich said, “Those are phenomenal numbers, but as we said they do not matter for current stock prices.” “This is why we are looking at the changes in earnings estimates after companies report and comparing them to prior periods to determine if the underlying trend in profit expectations can stay on an improving path.”

This is a very important point because earnings actually represent stale data. They represent the earnings from last quarter. The third and fourth quarter results will be the first during the period of full tariffs from the U.S. on Chinese goods and the retaliatory tariffs on U.S. goods from China. They will tell the actual story about the impact of the tariffs on company earnings.


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So at this time, investors should be looking beyond last quarter earnings and at any guidance from companies that mention the impact of the tariffs. It is possible that the market may not have fully priced in the possibility of a full-blown trade war just yet.

We do know from the way the three major indexes have performed that there have been asset allocation plays going on in the market. We also know that the weightings of the indexes have had a major influence on their performances so far this year.

The NASDAQ Composite, for example, faces little exposure to the tariffs, so it is up substantially this year and threatening a new all-time high this morning. The Dow Jones Industrial Average, however, is being weighed down by several stocks that face exposure from tariffs. The Dow is trading barely higher this year.

If the market begins to fully price in the impact of the tariffs then the Dow is likely to turn negative for the year, followed closely by the S&P 500 Index. Investors shouldn’t wait for third or fourth quarter earnings to tell them to bailout of certain stocks. They should be watching the future guidance during this current earnings season.

10 Places Where You Can Use Bitcoin, Online and Offline

Acceptance and widespread adoption has seen Bitcoin evolve from being a domain of the tech-savvy to being a preferred means of settling transactions around the world. Amidst restriction in the usage of the digital currency in some jurisdiction, e-commerce platforms have taken the lead in accepting bitcoin payments as a way of addressing customer needs.

Places To Spend Bitcoin Online

Online Shopping: Overstock

For those who like doing online shopping, Overstock is the place to be as the online retailer was among the first to add support for bitcoin payments.  With a simple click of a button, you should be able to pay for everything, right from electronics to furniture, jewelry, bedding using Bitcoin holdings.

In addition to Bitcoin, the e-commerce retailer also allows customers to make payments using other cryptocurrencies in the name of Ethereum, Dash and Bitcoin Cash. To use cryptocurrency in the e-commerce site, you have to transfer your preferred virtual currency, and the system will do the conversion automatically.

Making Travel Arrangements: Expedia, CheapAir, SurfAir Virgin Galactic, AirBaltic, Webjet

For those always on the go, Expedia is the site to visit when planning to make travel arrangements. The online travel agency allows visitors to pay for hotel bookings using Bitcoins. However, Bitcoin can only be used to pay for Hotel Bookings.

In case you wish to book air tickets with Bitcoin then CheapAir and Surf Air are some of the sites to visit. Once you chose all your flights, CheapAir will provide payment options of which Bitcoin is one of them.  The site accepts bitcoin payments for both domestic and international flight.

AirBaltic and Webjet also accept bitcoin payments for a variety of flights as well as for hotel, cruises and car hire.

Virgin Galactic allows people with a loftier bitcoin holding to pay for space travel.

Buy Gift Cards: eGifter and Gyft

EGifter and Gyft have beaten the likes of Amazon and Best Buy on the integration of Bitcoin payments for Gift Cards. You can use Bitcoin in these two sites to buy gift cards and then redeem them in hundreds of other popular retailers Including Amazon and Best Buy.

Games and Movies Purchases:  Microsoft

Microsoft is among the very few tech giants that seem to have embraced cryptocurrency as a form of payment. The software giant allows customers to deposit bitcoin into their Microsoft accounts to be to buy games, movies, and apps in Windows and Xbox Store.

The service should be of great benefit to the movie and game lovers. Microsoft could take the service to another level by accepting such payments in its online store.

In addition to Xbox, you can also purchase Zynga mobile and online games using Bitcoin as well as Green Man Gaming, Humble Bundle and PlayStation Network.

Pay For TV: Dish Payments

Satellite TV provider Dish has been accepting bitcoin payment since 2014. The network provider allows people to pay for their favorite TV subscription packages using Bitcoin in addition to other payment options.

Bitcoin Payment is also available for DISH Customers who wish to make one-time payments on mydish.com. The company has partnered cryptocurrency exchange Coinbase to accord its customers a smooth payment process.

Charity and Tipping

If you are into charity or returning gratitude as a sign for good gesture, then you can use some for your Bitcoin holdings for tipping and charity. There are a number of sites online that accept Bitcoin payments for donations.

Wikimedia Foundation is one such charitable organization that accepts Bitcoin donations that go towards the development and distribution of free, multilingual education content.

Bitcoin for Charity List contains a growing list of verified charities that accept Bitcoins.

Places To Spend Bitcoin Offline

Currently, there are very few places where one can spend Bitcoins while offline. However, it is still possible to spend the cryptocurrency in brick and mortar stores as well as on some services.

Food Beverage Joints

There a number of food and beverage joints around the world, that have been accepting Bitcoin payments for some years.

PizzaForCoins located in California U.S allows people to buy Pizza using Bitcoins.  Pemburry Tavern Pub in London, on the other hand, allows revelers to pay for drinks using Bitcoin.

Burger Bear, a food joint located in London also accepts Bitcoin payments as well as The Pink Cow a dinner joint in Tokyo Japan.

Pay For Taxi Services

Depending on location, there are Taxi services around the world that accepts Bitcoin payments. One of the largest taxi companies in Italy Cooperativa RadioTxi 3570 accepts Bitcoin for fares. Taxis in Budapest Hungary have also started accepting Bitcoin payments as part of a service supported by CoinPay.

Merchants

Merchants around the world have started accepting Bitcoin payments in brick and mortar store with the integration of apps that allows them to receive such payments.  In Japan, for instance, there are about 260,000 commercial facilities made up of food establishment’s, drugstores and retail locations that accept BTC payments.

Some of the business installations in the island nation that accepts Bitcoin payments include Comicap and Anshin Oyado as well as electronics retail chain Bic Camera.

Paying For Tuition

Even though Bitcoin is yet to find its way into the mainstream industry, a University in Cyprus, The University of Nicosia became the first higher learning institutions to accept such payments for its Master of Science in Digital Currency’ Course.

Nebula-AI (NBAI): The convergence of AI and Blockchain

The blockchain space is full of projects without a clear use case and clear value, but, as we’ll see, there are also projects which are quite the opposite. Nebula-AI (NBAI) is creating a decentralized AI computing platform which will make AI DAPPS (which they call DAI Apps) a reality. The first product and demo that they released is Quant-AI: A cutting-edge trading price prediction tool. In this article, we’ll dive into the specifics of this project and take a look at Quant AI and the broader concept of DAI Apps.

Thanks to the use of GPUs and parallel computing for algorithms like machine learning (ML) AI has finally become widely viable. This created a huge industry which infiltrated into our daily lives. Every time you are talking to your virtual personal assistant (Alexa, Siri or Google assistant) or Facebook suggests you which friends to tag in your photos, AI is working behind the scenes.

AI is more than one of the many buzzwords we hear in the tech world. AI is often proposed as some sort of panacea for all sort of problems, which it is not. Still, its potential is so great that the estimated value for the AI market worldwide in 2018 is over $7 billion, in 2020 it is expected to grow to $17 B and in 2025 it is estimated to hit $90 B.

This technology is already overwhelmingly used in many industries. In medicine it is used to predict heart attacks or diagnose mental health problems from speech patterns (and AI actually seems to manage both those things better than human experts), in finance it is used for quantitative financial analysis and price prediction (an example of this is Quant AI itself) and the list could go on. AI is not only Alexa and Google Assistant, it is going to be a really important part of our modern lives way sooner than most expect.

Current issues of the AI industry

There are some big issues with how AI services work nowadays which Nebula-AI is trying to solve. Before explaining how those are being addressed let’s take a look at what are the problems that the AI space is currently struggling with.

Centralization and control

Since the infrastructure, which provides the service is completely centralized, it is also completely dependent upon the hosting company. Cloud providers such as Google or Amazon could decide to cease offering their services at any given moment. That means there is no guarantee that the service that you are using will exist in the future. This could jeopardize your business processes.

Data privacy

Since AI development is linked to cloud services the data is completely centralized. Giving too much of your data to one single company can lead to great problems when this data is exploited. This topic has been brought into mainstream discussion lately after Cambridge Analytica has used the data it obtained from Facebook to influence the outcome of the US elections. This incident gives great insight into how broad the consequences of Big Data misuse can be.

Lack of talent and a high barrier to entry

This technology is demonstrating its ever-growing potential and its development is actually rapid, but it could be exponential. Two major issues are slowing down the development of this space: the lack of AI talent and the high cost of AI development.

The lack of talent in this space means that the top talent is reportedly paid up to 1.9 million dollars. No startup can afford to pay that much. This means that only big, established and well-funded companies can afford to recruit good AI researchers which limits not only the speed of development but also the democratization of this technology. And that, given the great potential of AI is a serious issue in and of itself.

AI deployment is very expensive, in part because of the need for great amounts of computing power needed. The maintenance of large data centers is pretty costly. A high cost creates a high barrier to entry for startups, researchers, and developers that are trying to get started in this space.

How Nebula AI addresses the problems of the AI industry

Democratizing AI computing and storage

NBAI lets people pay for distributed computing power on shared machines with their tokens. This solves a number of issues. The most apparent among those is the efficiency since in this system no idle resources are being paid for. That’s in part obtained by sharing the resources with other users. But that’s not the only advantage of decentralization.

Decentralized encrypted data storage

With NBAI no central organization has access to all your data. That is obtained by the combined usage of IPFS, multiple private keys for access control and data verification which makes sure the data cannot be tampered with. This way you can be sure that your data won’t be misused or even accessed by who shouldn’t have access to it.

AI engineer training center in Montreal

NBAI has established an AI training center in Montreal where people with a background in mathematics or programming can learn fundamentals about artificial neural networks and how they’re being used for machine learning, as applied to speech and object recognition, image segmentation, modeling language etc.

A blockchain for AI computing

Most of us already do know that blockchain mining consumes lots of electricity and computing power. Actually, Bitcoin mining consumes more electricity than Ireland and it has been predicted that this blockchain mining will account for 0.5% of worldwide electricity use by the end of 2018. What many people don’t know is that this computing power is used only for the purpose of securing the blockchain.

That is a really huge amount of computing power that could be put to better use. That being said, the inefficiency of Proof-of-Work based blockchains is beyond the scope of this article. What I wish to point out is that such blockchains create a distributed computing network which is already really efficient at what it is doing. Sure, there are ways to operate a blockchain with way less computing power using other consensus algorithms. Still, the amount of computing power obtained by those networks is quite remarkable.

That’s the case because miners themselves profit more if their nodes are efficient. What NBAI envisions is that such miners could actually perform AI calculations instead simple hash calculations in order to obtain tokens.

Another big advantage of this approach is that many GPU mining machines can be converted to NBAI AI computing machines. This can potentially accelerate the network growth because many miners hold potential future nodes of the network. Still, since building decentralized networks takes time, NBAI has deals in place with large-scale third-party data centers in Quebec. This will ensure the system will be operational immediately when launched.

NBAI system architecture

Helix (Until 2018 Q3)

The first Ethereum independent blockchain (and phase) of the NBAI project is called Helix. Proof-of-Work (Ethash algorithm) will be used to secure this blockchain. Using an independent chain has many advantages. For the most part, with its own chain, the project will suffer from fewer traffic delays and some fundamental underlying proprieties of the blockchain can be tailored specifically for the very peculiar needs of such a system.

That means that the Gas (transaction) cost will be different in order to motivate miners to get profit through AI calculations instead of traditional Proof-of-Work mining. The way that it will work for nodes is that they can obtain tasks from the task pool by smart contracts. Then, after they performed the task, they submit the result and receive the token rewards. Another fundamental propriety which will be altered is the mining difficulty. This will be done in order to increase the speed of generating blocks and adjust the token production.

Still, PoW is really inefficient and has a limited scalability. Also, nobody ever solved Proof-of-Work’s 51% attack vulnerability. Those are probably the main reasons why this consensus algorithm is only used in the first phase of the project.

Orion (2019 Q1 onwards)

A fundamental property of distributed computing is that the closer the distance between nodes, the lower the cost of communication and the higher the computational efficiency. This propriety is the basis for the new consensus algorithm which is being developed by NBAI: Proof-of-Group (PoG). In PoG consensus systems and token incentives are used to ensure both efficiency and security.

In the PoG system, there are two different kinds of nodes: work nodes and ledgers. The role of a work node is to compute artificial intelligence tasks. The ledger, in addition to normal calculation, can also be responsible for allocating subtasks to all work nodes in the area (called a virtual working group). The task results are then written onto IPFS. After that is done the completed contract is verified by the ledger.

Self-organized efficient network architecture

In order to ensure an efficient communication between nodes of the virtual working groups an algorithm which creates a self-organized network topography which is efficient has been developed. Here is how it works.

When a new work node joins the system, it searches for nearby nodes. If it finds nodes with fast response time it joins them and becomes one of the worker nodes of the virtual working group. If the node doesn’t find any nodes with an acceptable response time it elects itself as a ledger. Nearby nodes will have a faster response time and will work together under a single ledger that coordinates them. Such a system ensures the highest possible network efficiency and generates an efficient network design.

No 51% attack vulnerability

The working groups compose a ledger network which uses the Byzantine consensus system for the joint ledger. This solution ensures complete safety against 51% attacks (which PoW doesn’t) and higher efficiency. Such attacks recently had some pretty bad effects on some cryptocurrencies. The most notable example is Bitcoin Gold (BCG).

Nebula AI use cases

There are a lot of potential applications for a more efficient and privacy-conscious AI computing service. Some possible applications are biomedical imaging, protein structure calculation (a generating task), computational marketing and various kinds of analysis of big data like social media feeds.

What’s more, this project offers more than just potential to speculate about. The team has developed some functional demos which run on their testnet that can actually show us some examples of what the system is capable of. Those are the aforementioned Quant AI and the Sentiment Analysis DAI Apps.

Demos offered by Nebula AI

Quant AI

One demo that the NBAI team has developed to demonstrate the potential of the system that they are creating is called Quant AI. Quant AI is a DAI App on the NBAI testnet which predicts the Ethereum trading price. This tool analyzes time series and trains deep learning models based on AI algorithm to forecast real-time trends and implement automatic trading of cryptocurrencies.

Advanced AI trading price prediction is something that has been accessible only to few people so far and now thanks to this initiative will become widely available and will be developed further. That’s the potential of blockchain democratization applied to AI.

Sentiment Analysis

The sentiment analysis DAI App is a natural language processing DAI App developed by NBAI. This tool helps users classify the polarity of a given text and extract the attitude of the writer. It is currently used as a price prediction model for trading, evaluation of consumer inclination, online conversations positioning and content inclinations.

Social media are gold mines of public opinion on any given topics. Such data can be monetized in various ways amongst which predicting market movements is the most obvious one. An example of how this tool can be used is given by this sentiment analysis of the subreddits of the main cryptocurrencies (the example given has actually been obtained using a less accurate algorithm which isn’t based on an artificial neural network).

Analysis

This is one of the projects that look promising from the get-go but only get better as you continue getting to know them more. AI is a huge industry which is currently booming and is still so new that has a lot of space for improvement and suffers from various issues. NBAI sure won’t solve all the problems that this space is facing right now but it is actually addressing some of them.

Speculative value

From a speculative point of view, their token is just as promising as their project in general. Computing power is constantly getting cheaper (both from a hardware cost and electricity consumption standpoint) so the amount of work that you will be able to get done with the same number of tokens is going to grow over time. At the same time, also the number of users willing to pay for such a service is probably going to grow drastically. That is also confirmed by the AI service market value estimates.

More AI applications are going to be developed over time and more AI applications become possible as the amount of processing power available increases. It is hard to imagine how the NBAI token could become worthless. Sure, there is always the possibility that the whole system fails for some reason but the presence of actually functional product demos on the testnet makes it appear way less likely for this project than for most other ICOs. The ICO concluded on 20th April with $5,874,054 gathered.

No investment is 100% safe

Still, this system is under development and a lot of things can go wrong (Cryptocurrency and ICOs are always really speculative and risky investments. The NBAI whitepaper actually explains it pretty well at the very beginning in the “Risk statement” section.

One thing worth pointing out is that the very presence of such a detailed risk statement is a big plus since it demonstrates responsibility on the team’s part. You should never trust a project that claims your investment will be 100% safe and guarantees returns. That being said, the risk statement still says the truth and you should only invest what you can afford to lose.

Another thing to keep in mind is that there are some other projects that bring AI to the blockchain. Sure, every one of them has its own strengths and weaknesses but there definitely is some overlap. So, to put it shortly there are two main things that can go wrong with this project:

  1. The system could fail or an unsurmountable issue could stop the development.
  2. Too much of the market could be lost to the competitors or could not be “taken” from the centralized counterparts.

Walgreens Drags Dow Lower Just Days After Replacing GE

The Dow is down sharply early Thursday with the headlines blaming lingering concerns over an escalating trade war between the United States and its major trading partners, China and the European Union for the triple-digit, 0.48% loss.

However, if you dig deeper into the cause of the sell-off and the size of the move, you may want to place the blame on the performance of Walgreens.

Just days after Walgreens (WBA) replaced General Electric Company (GE) in the Dow Jones Industrial Average after the close on Monday, it is the biggest drag on the stock market.

The catalyst behind the weakness in Walgreens, or for that matter the health-care sector today is the news that Amazon is acquiring online pharmacy PillPack in a deal that could shake up the prescription drug industry.

Although both Amazon and PillPack did not disclose the details of the pact, traders expect the move to be completed during the second half of the year.

According to Walgreens Boots Alliance CEO Stefano Pessina, “Yes, it’s a declaration of intent from Amazon.”

This is significant to the health-care industry because it may lead to lower prices for pharmaceutical prescriptions over the long-run. On the surface, the deal is a major sign that Amazon is serious about its intent to move further into the health-care industry.

Analysts are saying that the move threatens to remove one of the few distinguishing factors pharmacy chains have relied on to fend off Amazon, the sale of prescription drugs.

Shares of Walgreens, CVS Health and Rite Aid all tanked after the announcement along with drug distributors Cardinal Health, AmerisourceBergen and McKesson.

Not only is the prescription of the three major retails being threatened, but also their so-called “front of store” sales, which have already suffered from weaker sales due to the impact of Amazon’s main business.

The move by Amazon is important because it represents an aggressive attack on the status quo of the healthcare system in the U.S., which could eventually lead to lower prices for consumers across the board.



Earlier in the year, Amazon announced an alliance with Berkshire Hathaway and JPMorgan Chase to form their own healthcare insurance provider to help their companies get better control over employee and company healthcare costs. Today’s acquisition of PillPack may be part of the retail giant’s overall play to lower healthcare costs.

The weakness in the healthcare sector today is just another concern for investors who are already facing challenges this week from escalating trade war tensions.

Facebook, Inc. (NASDAQ:FB) In Trouble For Sharing Data With Chinese Company

The social media giant has data partnerships with four electronic manufacturers from China including Huawei which has been flagged as a security threat by U.S Intelligence officials. Huawei is believed to have a close relationship with the Chinese government which is why it is seen as a national security threat by U.S officials who have been worried about Huawei devices being used to spy on American secrets.

Facebook entered into the data sharing partnerships as early as 2010 and the other Chinese companies involved are TCL, Oppo and Lenovo. The partnerships are still ongoing despite the concerns expressed by security officials in the U.S but Facebook reported in a recent interview that it will terminate its deal with Huawei.

Facebook also provides data access to other companies including Samsung Electronics, Amazon.com, Inc. (NASDAQ:AMZN), BlackBerry Ltd (NYSE:BB), and Apple Inc. (NASDAQ:AAPL) among others. Most of the companies are smartphone manufacturers while others such as Amazon collect data to improve their digital and online services.

Such deals allowed Facebook to secure an early lead in the mobile market as early as 2007 even before mobile phone apps became popular. However, things really took off well when the onset of smartphones Facebook officials revealed that the deals with Chinese manufacturers granted provided it with access that is similar to what Blackberry had been offering. This means the company could collect detailed information on user devices and also on all their friends. The information collected includes relationship status, education history, work and interests.

The social media giant also told U.S intelligent officials that the data it provided to Huawei was stored on phones and not on its servers. According to Virginia’s Senator Mark Warner, this is not the first time that there has been concerns about Huawei. He stated that there was a previous report by the House Intelligence Committee in 2012 regarding the close relationship between electronic manufacturers such as Huawei and China’s Communist Party.

Huawei reportedly received millions of dollars in funding from China’s policy banks in order for it to expand its business across Africa, Europe, and South America. Huawei’s founder Ren Zhengfei also happens to be a former engineer for the People’s Liberation Army.

Warner stated that he was eager to know more about how Facebook made sure that user information was not sent to Chinese servers. Facebook vice president Francisco Varela defended the company stating that all of the integrations between Facebook and the four Chinese companies were controlled from the beginning and that the company made sure that it approved everything that was constructed.

The recent concerns about how Facebook has been handling data come just a few weeks after its CEO, Mark Zuckerberg was questioned by government officials about the firm’s involvement with Russians who are believed to have meddled with the U.S Presidential elections. However, the company managed to get out of that situation although Zuckerberg had to answer a lot of questions.

Is EOS the Most Promising Cryptocurrency in Development?

EOS is a project who has drawn much attention to itself lately. In part because of the recent sudden increase in the value of its native token and its Weiss rating.

In this article, we will analyze the potential of the EOS project and its probable future. It is my personal opinion that this cryptocurrency is a serious contender for the title of “Most promising DAPP/smart contracts platform”.

What is EOS?

EOS is a project belonging to the same category as Ethereum (platform for DAPP and smart contracts) but substantially different. In fact, EOS seems to have two main objectives that it seeks to achieve through its development: Scalability and ease of use.

Scalability

Scalability is the term used to refer to the number of transactions a blockchain is able to handle in a given period of time. A blockchain that can handle a large transaction load per second without any problems is called “scalable”. EOS faces this challenge mainly through two implementations: DPOS and interoperability between blockchains (achieved with the Dawn 3.0 upgrade).

DPOS

DPOS, Distributed Proof Of Stake, is the consensus algorithm of EOS (Steemit and BitShares use the same algorithm, after all, they had the same technical director, Dan Larimer). This algorithm sacrifices a certain amount of decentralization for a big advantage in terms of scalability. In fact, in the worst-case scenario, it is estimated that a single native EOS blockchain will reach 1000 transactions per second. But, in reality, it is to be expected that these will initially be around 3000 and then increase as the protocol is updated. For comparison, Ethereum handles about 20 per second, Bitcoin mind about 7.

The price of this is that only the 21 so-called block producers can validate the blocks, which substantially reduces decentralization. This is not the most resilient or incensurable blockchain, but it is the most suitable for mainstream use on a large scale. In fact, unlike what many believe, EOS will not “kill” Ethereum. Of course, as I previously suggested, it will probably get a good slice of its market. But Ethereum will continue to have its own niche. In particular, ETH will thrive where immutability, security, and decentralization are of utmost importance.

The blocks on the EOS network are also generated every half second. This means that transactions will always be confirmed within a few seconds if not just one. On the Ethereum network, an average transaction on press time takes about a minute and a half to be confirmed with one block added to the blockchain every 10-19 seconds based on network congestion. The Bitcoin blockchain instead takes on average just under an hour and a half to confirm a transaction with a block added every 10 minutes.

EOS seems a very good long-term investment
EOS seems a very good long-term investment

Inter Blockchain Communication

The other, even more noteworthy, way in which EOS seeks to increase its scalability is communication between blockchains. This allows, according to the reports, two or more blockchains to communicate (and collaborate to manage a greater load than single chain could). Particularly noteworthy is the statement that this standard is as secure as are interactions between smart contracts on a single chain.

This means that a transaction on one chain becomes automatically available on another. The only disadvantage is that this becomes visible only after this transaction has been confirmed on the other chain (that should happen in under 3 seconds). This feature of EOS is the basis of the statement that EOS can handle unlimited transactions per second.

Ease of use

Another not to be underestimated feature of EOS is how much attention has been dedicated to making it easy to use. The system includes features such as humanly comprehensible addresses, password recovery systems or the lack of transaction fees (which allows you to interact with DAPPs without owning tokens). These, together with its speed, make it possible to interact with the blockchain without even knowing that what you are using is not just a normal website.

To understand what is described, just look at steemit. This social/blogging platform, although it has some peculiar features, doesn’t seem to have a blockchain and some tokens at its base at all. This is the kind of DAPPs that are going to be hosted on EOS.


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Airdrops for EOS hodlers

Airdrop has become now a typical buzzword that we hear in the blockchain industry with the intention of attracting attention. This term simply refers to the free distribution of tokens. Often this is done in order to draw attention to the project, for example by giving tokens to those who have participated in other ICOs, so that they look for the project from which they derive. Other times just to trigger network effects. But in the EOS ecosystem, Airdrops have a different motivation, which is why I have said in the past that this may be the best investment in the long term.

“What’s the reason?” is the question that spontaneously arises in the mind of any person with common sense. This is because everyone knows that you should never expect anything for free. The answer to this question brings us to our attention something that is actually even better news.

Block.one has raised several billion dollars so far through the EOS ICO. These funds are intended to finance projects for which there will never be an ICO. In fact, more funds have already been announced for this purpose, including the USD 100 million joint venture between Block.one and the German Fintech incubator FinLab AG.

Projects financed by these funds, collected during the ICO, do not, therefore, need to finance themselves by selling their tokens. Their tokens are then distributed free of charge (hence as an airdrop) to all holders of EOS tokens. This means that investing in EOS is investing in a whole ecosystem in a much more direct way than investing in other similar projects (e.g. NEO or ETH). An analogy would be to buy ETH and consequently, in the coming months, receiving also the tokens of all the major projects realized on the platform for free.

Some Numbers

The EOS page on Coinmarketcap indicates that, with a total market capitalization of 10,590,855,420 dollars, this token is the fifth cryptocurrency by market cap. In fact, the latter has recently surpassed Litecoin (LTC) which has a market capital of 6,596,457,497 dollars (therefore now just over half that of EOS) at the time of printing. As far as price is concerned, EOS has grown by more than 1800% in less than a year (since July 2017) and then sustained a drop. (The graph renders the image previous to the drop in price.)

1

The features described above, once tested by real software have attracted a large number of investors. In fact, initially, the product has been subject to countless criticisms due to its ICO, which lasted nearly a year and will end in just a couple of days. But those who believed in the project when most accused it of being a scam enjoyed a low-price entry and substantial gains.

Analysis

It should be considered that the value of the EOS token at this time is purely speculative. In fact, until the EOS network is launched in three days, the token is completely useless. Ten billion dollars is a very high estimate for a platform still in development. We can, therefore, draw two logical conclusions:

  1. The price of the token at this time is mostly linked to the enthusiasm due to the upcoming launch.
  2. Consequently, a price correction is underway.

It is a Bubble, But that’s Not an Issue

EOS seems a very good long-term investment. That said, like any investment in this space, it is subject to high risk. The reason for this is that the sector is immersed in a huge speculative bubble. It is not by chance that this is often compared with the dot-com bubble that burst at the beginning of the millennium.

Indeed, just like at the beginning of the millennium it is to be expected that the vast majority of companies in the sector will fail. But that bubble was also a primordial soup in which companies such as Google and Amazon developed, the stocks of which at the time were worth only a fraction of what they are valued nowadays. In the same way, this time too, we can expect that the revolutionary technology such as blockchain, just like the Internet did, will lead to the birth of companies of similar relevance. My opinion is that EOS may be one of them.

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4 Triggers for the Next Bitcoin Boom

As the founder and COO of BitcoinIRA.com, the first and largest Bitcoin IRA platform, I have witnessed this year’s significant Bitcoin price drop firsthand which has caused potential investors to approach the market with trepidation. Both current and prospective customers frequently ask me when the market will be rebound again. And while prices across digital currencies have dropped heavily in the first quarter of this year and nobody has a crystal ball to predict the future, I believe the start of our next big bull run is just around the bend.

Experts agree as well. For example, Thomas Lee, managing partner at the popular financial firm Fundstrat Global Advisors, anticipates a record peak for Bitcoin by July. Lee’s prediction is based on analysis from the currency’s 22 corrections since 2010, but here are some additional factors that could contribute to Bitcoin’s eventual spike.

SEC Approval & Regulation

Why is regulation needed?

When an industry scales and grows at lightning speed, increased regulation is inevitable. I believe that this is a good thing, as it is indicative of cryptocurrencies’ long-term staying power, and continued prevalence at the mainstream level. Regulating a once notoriously unregulated industry is undeniably nuanced territory, and for many in the space, it may require an attitude adjustment. We should stop looking at regulation as a hamper to the crypto space, and instead put that energy into working alongside the regulations to make this industry more compliant, transparent, and reliable than ever before.

I believe that SEC approval of crypto as a regulated security could drive walls of new institutional money, and is indicative of greater mainstream adoption of cryptocurrencies as a whole.

What’s the latest progress?

In early March, the U.S. Securities and Exchange Commission (SEC) issued a statement declaring that all cryptocurrency platforms that meet the definition of a “security” must register with the SEC as a national securities exchange. While this likely contributed to Bitcoin’s price decline in the short term, I believe this increased regulation ultimately serves the consumer’s best interests in the long term, as it provides a necessary level of oversight in safeguarding against scammy ICOs and hacks.

At least one regulatory body confirmed publicly that it does not want to prevent the growth of cryptocurrencies and the chairman of the U.S. Commodity Futures Trading Commission (CFTC) recently confirmed that by stating recently the need for balance and a “do no harm” approach when regulating cryptocurrencies.

Image: Chairman of CFTC, Christopher Giancarlo, stated a “do not harm” approach is needed when regulating cryptocurrencies
Image: Chairman of CFTC, Christopher Giancarlo, stated a “do not harm” approach is needed when regulating cryptocurrencies

I believe this new oversight will increase the trust in cryptocurrency transactions and will directly contribute to the next Bitcoin boom.

ETF approvals

What is an ETF?

ETF’s, or exchange-traded funds, are marketable securities that track an index, a commodity, bond, or a basket of assets like an index fund. An ETF is a type of fund that owns the underlying assets (shares of stock, bonds, oil futures, gold bars, foreign currency, etc.) and divides ownership of those assets into shares. The actual investment vehicle structure (such as a corporation or investment trust) will vary by country, and within one country there can be multiple structures that co-exist.


Hate Risk and Want to Invest in Bitcoin? ETF’s, Cryptocurrency Index, and Hedge Funds Are Here to Help


Why could it drive up the price?

Traditionally, ETFs were created for products that are difficult for investors to hold (such as oil and gas). Similarly, setting up crypto wallets and executing trades can be considered difficult for average investors, so the potential of crypto-related ETFs may allow for simpler trading through brokerage accounts.

What’s the latest progress?

According to the SEC, “the agency has started the process to approve or disapprove a change in its rules that allows two Bitcoin ETFs to be listed on the NYSE Arca Exchange.” SEC approval for a Bitcoin ETF exchange will only further cement Bitcoin’s mainstream presence and likely also contribute to a massive price increase.

Lightning Network

What is the Lightning Network?

The Lightning Network is a decentralized network that uses smart contract functionality in order to enable instant payments across a network of participants. An “off-chain” solution that is built on top of the blockchain, the Lightning Network ahs transactions and scripts that are parsable and can be enforced on the blockchain if needed. The blockchain’s off-chain solution, however, allows transactions to be processed in a faster and with much lower fees than ever before.

Why could the Lightning Network drive up the price?

Elizabeth Stark, co-founder of Lightning Labs, says that the goal of the Lightning Network is to process “many thousands of transactions per second and maybe someday even millions of transactions per second,” surpassing the capabilities of traditional credit card companies like Visa.

With this kind of technical innovation in the works, Bitcoin prices have potential to soar. But it may take a little bit of time. As Stark said herself: “Bitcoin is a marathon, not a sprint. People wanted it to be a sprint.”

What’s the latest progress?

On March 15, Lightning Labs launched a beta version of its Lightning Network (LND) software specifically available for the developer community. Designed to tackle some of the legacy blockchain’s obstacles surrounding high fees and slow transaction times, LND uses smart contract functionality to enable payments and process transactions of the blockchain.

Retailer Acceptance (e.g. Amazon)

How many retailers currently accept Bitcoin today?

Bitcoin is currently accepted at several major retailers, including Overstock.com, Expedia, Microsoft, and about another 100 stores with more growing very quickly.

I believe that more retail acceptance will increase the number of transactions, wallets created and overall Bitcoin holdings as consumers purchase Bitcoin in order to pay for goods and services.

What’s the latest progress?

Coinbase is aggressively moving into the retail space with the launch of their new product: Coinbase Commerce. This enables retailers to accept bitcoin alongside traditional choices such as credit card or PayPal.

Image: Coinbase commerce
Image: Coinbase commerce

Also, Amazon has secured some cryptocurrency domains, and Starbucks CEO Howard Schultz has expressed his interest in using cryptocurrency for large-scale retail adoption. “I personally believe that there is going to be one or a few legitimate trusted digital currencies off of the blockchain technology. And that legitimacy and trust in terms of its consumer application will have to be legitimized by a brand and a brick and mortar environment, where the consumer has trust and confidence in the company that is providing the transaction.” Schultz said. With Starbucks’ mobile app already redefining the customer experience in its brick and mortar stores, adding cryptocurrency seems like a natural progression and one that has potential to contribute to the next Bitcoin boom.

 The writing is on the wall: with so much momentum surrounding Bitcoin and other digital currencies, in my opinion, it’s only a matter of time before prices rebound again.

This article was written By Chris Kline, Co-founder, and COO at BitcoinIRA.com

Bitcoin is Evolving Just Like Amazon

Volatility, however, is an indicator that a potentially powerful force is coming into its own. In this regard, one might think of Bitcoin as a new Amazon: navigating some growing pains but developing innovative solutions to help solve them.

At this point, it’s safe to say that Amazon has achieved retail dominance, and while Bitcoin’s story is in a much more formative phase, its monumental upward trajectory points to its increasingly dominant role in the global financial landscape.

bitcoin amazon 1

Amazon’s Early Struggles Mirror Bitcoins

Amazon, established in 1994, was originally born out of Jeff Bezos’ vision to establish “the world’s most consumer-centric company, where customers can come to buy everything they want online.” Given Amazon’s larger-than-life presence in the retail landscape today, it can be hard to remember the company in its infancy, when it was merely an online bookseller. Like most companies intent on scaling their vision, Amazon faced its fair share of growing pains and challenges in the early days, as many customers were initially wary of online shopping and additional shipping costs. While Amazon Prime, a subscription-based service offering free two-day shipping alleviated some of these concerns, it still took time for the company to gain steam and build credibility at the global level.

Meanwhile, Bitcoin, which was born in 2009 out of the financial crisis and established in order to “create a purely peer-to-peer version of electronic cash that [would] allow online payments to be sent directly from one party to another without going through a financial institution,” has also encountered its share of obstacles scaling its vision. Particularly, the legacy Bitcoin blockchain that powers Bitcoin transactions faces slow transaction processing times and high transaction fees.

But much like the developers at Amazon working tirelessly to develop new, innovative solutions, a passionate group of developers in the crypto community have been actively involved in refining old platforms and building new ones in order to present a growing number of solutions to meet a wide range of technical issues.

Amazon Pivoted to Succeed and Bitcoin Is Too

Amazon may have begun as an e-tailer marketplace, but the company quickly expanded its range of offerings by creating many of its own niche products and services, ranging from the Amazon Kindle to personal assistant Alexa. The company has also demonstrated its desire to tap into other sectors, whether by acquiring Whole Foods and reimagining the experience of shopping at a grocery chain or working with Berkshire Hathaway and JPMorgan to control costs and reduce spending on health insurance.

Similarly, the cryptocurrency community has also been hard at work implementing platform changes to meet a growing array of user needs. The Lightning Network, a decentralized network that uses an “off-blockchain” solution in order to enable instant payments across a network of participants, is expected to launch sometime in the new future, solving the legacy Bitcoin blockchain’s scalability problem.

Furthermore, just as Amazon staked its claim as a company with versatile offerings that far surpassed its e-commerce platform, the cryptocurrency community has been actively developing technical platforms with offerings that stretch far beyond alternative payment systems. Two particularly noteworthy examples? Ethereum and Ripple.

Ethereum And Ripple Are Evolving Like Amazon’s Alexa

While Amazon may be leading the charge in cutting-edge fields like artificial intelligence, Ethereum is paving the way for a new relationship with Amazon as well as smart contract technology and decentralized applications.

Ripple, too, which has two primary products for banks (xCurrent and xRapid), has demonstrated its wide range of capabilities that far exceed its function as native cryptocurrency XRP.

Indeed, the constant innovation and implementation in the cryptocurrency community ensures that, much like Amazon, the digital currency space is continuing to grow, improve, and reshape business and commerce as we know it.

The New Amazon: Bitcoin Moving Past Its Infancy

The fact that Bitcoin has moved from a mere concept in a white paper drafted during the 2008 financial crisis to one of many influential digital currencies over 10 years later is a testament to the fact that cryptocurrency is more than just a fad. Like Amazon, it will demonstrate that disruption of an industry is never without its speed bumps along the way.

This article was written By Chris Kline, Co-founder, and COO at BitcoinIRA.com

Alphabet Inc (Google) Is Pursuing the Pentagon’s Giant Cloud Contract Quietly, Fearing An Employee Revolt

Google leaders used the two meetings and described the way in which company’s transition cloud computing as well as how it has been positioning itself as a powerhouse for research and development of artificial intelligence. In particular, the company’s founder was keen on showcasing how they were about AI every day and how they intend to implement cloud. This is according to one former and one current senior official from the Defense Department.

According to the officials, who spoke on condition of anonymity, this was not an overt sales pitch as such. However, the effect of the trip was transformative for the company. During the trip, Mattis also met a number of representatives from Amazon.com, Inc. (NASDAQ:AMZN). Mattis went west with a lot of reservations concerning the department’s shift to cloud and by the time he returned to Washington, he was fully convinced that the military needed to import a big portion of its data to a commercial provider of the cloud. The move would go beyond just managing emails, files or paperwork.

In September last year, officials from the Defense Department announced that the department would be moving into a cloud on a large scale. The Joint Enterprise Defense Infrastructure, or JEDI, the program has since been combined into a single contract and is worth $10 billion over a decade and will be awarded by the end of this year.

The competition for the contract is still in its early stages and the department is expected to announce the request for proposals any time this week. However, according to officials from the department, the race is shaping up into a three-horse race between Google, Microsoft Corporation (NASDAQ:MSFT) and Amazon. Oracle Corporation (NYSE:ORCL) comes in a distant fourth among the companies eying the deal. Although Microsoft and Amazon have been active participants in many events that are related to the deal, including an industry event which happened on March 7, Google has kept its interests in the deal away from the media and out the public gallery. The company’s management is even working hard to ensure that the details of their interest in the deal are kept away from its own employees.

The company has not responded to any comments regarding their interest in the JEDI deal. Google’s spokesperson in charge of cloud business recently said that they had secured the FedRAMP certification, which clears the company to compete for government contracts. Officials from Pentagon expect those who will lose the contract to protest so public conversation is being limited in a bid to reduce perceptions of favoritism. According to reports from several officials, Mattis is not concerned so much about who wins the contract. He has appointed Deputy Defense Secretary Patrick Shanahan to manage the entire process.  According to the officials, Mattis prefers the JEDI cloud to be secure and resilient and must be able to deliver any needed information fighters in combat. He also prefers a cloud that will not take long to build.

“A Fresh Fear is Lurking on Global Financial Markets”

The message from Tom Elliott, deVere Group’s International Investment Strategist, comes as market volatility has increased in recent weeks.

Mr. Elliott comments: “A fresh fear is lurking on global financial markets – and it is not about trade wars.

“It is that global GDP growth may have peaked in the current growth spurt, that began in early 2016.”

He continues: “Add to this three other key factors to add to investors’ nervousness.

“One, the ongoing fear that a trade war will break out between the U.S. and other major economies. Although the trade dispute with China has eased a little in recent days, largely due to Xi Jinping, the Chinese President, making a conciliatory speech last week.

“Two, the apprehension that a new wave of regulation will impact on the business models of some of America’s largest quoted companies, such as Facebook, Google, and Amazon.

“And three, growing tensions between the U.S., the UK, and France with Russia, and others, following Friday night’s attack on Syrian installations.”

He goes on to explain: “However, fundamentals remain supportive for stocks. Consensus estimates for global corporate earnings growth in the first quarter are at 15 percent over the previous year, while for the S&P 500 index it is 17 percent.

“The beleaguered U.S. tech sector is expected to see 22 percent earnings growth, which will help soothe investors’ nerves.

“Despite the prospect of two, maybe three, more rate hikes from the Federal Reserve this year, and probably one from the Bank of England in May, monetary policy remains loose by historical standards in all the main economies.

“This supports risk assets, buy keeping borrowing costs low for companies and their customers, and by keeping ‘risk-free’ rates low and unattractive relative to the expected returns from stocks.”

Mr. Elliott concludes: “Despite new geopolitical concerns, our investment positioning remains unaltered.

“We favor a long-term, multi-asset approach to investing, whereby investors choose a suitable combination of global equities and bonds – depending on their risk profile and investment horizon – and leave the portfolio unchanged. Too frequent rebalancing ensures winners are sold and losers are bought – which financial history, and common sense, supports.”

Amazon Ready To End Alphabet and Facebook Advertising Duopoly

According to, Alex DeGroote, a media analyst at Cenkos Securities, the e-commerce giant advertising business is growing at an impressive rate and could be worth $20 Billion by 2020.

Growing Search Ad Business

Amazon advertising business is currently valued at about $3 billion amounting to about 1.5% of North America Advertising business. Given the strength at which its search business is growing, the tech giant could amass a substantial amount of market share by 2020.

According to the analyst, Amazon’s competitive edge in the advertising business look set to continue growing, given the massive amount of products listed in its platform. An increase in the number of companies listing products in the platform should continue strengthening the company’s search business, a key to growing the advertising business.

“I think Amazon will do a retail search and take Google to the cleaners on retail search using their estate. Slowly over time, you will use Amazon as your retail search engine rather than Google,” said Mr. DeGroote.

Amazon faces an uphill task to dethrone Google given that its search ad business could account for about 80% of the overall market. However, recent developments indicate that the retailer could soon put the search giant at ease as the race of search ad revenues heats up.

Amazon’s Search Ad Threat

Reports indicate that Amazon has stepped up ad products in search and video as it moves to break status quo at the top. Its efforts appear to be paying off, having emerged that one of the world’s largest advertising firm is planning to increase its advertising spending on Amazon by $100 million, to $300 million this year.

Amazons ambitions in taking Google and Facebook head-on, cannot be taken lightly. The tech giant has been known to have a disruptive effect in industries it sets foot in. It has already made a name for itself as a book-seller. If the amount of time it took to be a heavyweight in the cloud computing space is anything to go by, then Google and Facebook should be worried.

Unlike other companies, Amazon has the financial muscle to take on the big players in the advertising business. The fact that it owns a site that attracts millions of people from all over the world also gives it access to the much-needed traffic, needed to build a profitable advertising business.

Stock Rating

Growing ad revenues is one of Amazon’s core objective this year, seen as a critical contributor to sales in North America. The sentiments have been received well in Wall Street with major brokerage firms remaining confident about the retailers advertising ambitions.

Analysts at Citi Research have since increased their share price target of Amazon’s stock to $1600, from $1400, buoyed by the way the company is moving to diversify its business and revenue streams. Analysts at J.P. Morgan also remain upbeat about the e-commerce giant’s advertising aspirations which they say could make it a $1 trillion company.

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Has Amazon Found Its Competitor?

Coupang is the largest e-commerce site in South Korea and entered the market in 2010. Its annual sales revenues are more than $3 billion. With a value of more than $5 billion and $1.4 billion in venture capital investment, this company considers as one of the fastest-growing company in South Korea, and it is growing in a very competitive market. Based on CNBC, it is a strong candidate for an IPO in 2019 or 2020.

A competitive advantage of Coupang over Amazon is the refund. For example, in case you bought an item from Coupang and you want to return it for any reason, you can do it with just a few clicks on their app. Then you place the item outside your door with no invoice or boxes and they will come and pick it up in few hours. After, you get your refund. There is no doubt that this is an awesome service! Another considerable competitive advantage against Amazon is that Coupang usually delivers within the same day or the next day the latest. The considerably cheap delivery service gives Coupang another advantage.

Bom Kim, founder and CEO of Coupang, stated: “The way we’ve approached it is integrating from end to end, we’ve built our own last mile”. Currently, Coupang has more than 10,000 employees, including 4,000 delivery drivers. Moreover, the company keeps records of all customers’ interactions for a more refined service.

The Bank of America Merrill Lynch is telling their customers that mutual funds have greater and larger stakes in Amazon and Netflix compared to the market indexes. A possible outcome of this could be a hit on the Amazon stock. Additionally, President Trump has tweeted about Amazon many times in recent days. Among others, the President claimed that Amazon had not paid the post office for its delivery services. According to CNBC, Amazon and Netflix shares dropped more 11% over the last week. Both stocks fell more than 5% on Monday but bounced back on Tuesday.

Amazon: Technical Analysis

Based on the Ichimoku system, it could be noticed that, at the moment, the Amazon stock seems to be in a bearish mode. The price, the lines Kijun Sen and Tekan Sen, and Chikou Span appear below the cloud. We could probably wait to see the price reaching the Tekan Sen and bounce for a potential bear signal.

Amazon 1H Chart
Amazon 1H Chart

This article was written by Marios Athinodorou, TeleTrade’s market analyst, and commentator. Among others, Marios is delivering weekly trading webinars. Sign up for upcoming webinars here.

Robust Jobs Report Underpins Crude Oil, Drives NASDAQ to Record High

Copper prices spiked to their lowest level since February 9 on Friday before rebounding to close higher for the session. The wicked price action was fueled by escalating tensions over U.S. metal imports.

May Comex High Grade Copper settled at $3.1360 up $0.0570 or +1.85%.

Comex High Grade Copper
Daily May Comex High Grade Copper

Traders were primarily reacting to U.S. President Donald Trump’s signing of a 25-percent import tariff on steel and 10-percent tariff on aluminum, with initial exemptions for Canada and Mexico.

Reactions to Trump’s tariffs, which are expected to begin within 15 days, was mixed, triggering the wide two-sided trade.

According to Reuters, International Monetary Fund Managing Director Christine Lagarde said she feared a “tit-for-tat” escalation of trade retaliation over the U.S. tariffs that would sap business confidence and investment, while Chinese metal associations called on Beijing to retaliate.

Reuters also reported that investment bank Nomura, played down the impact on exports from top steel and aluminum maker China, noting that the “U.S. share of China’s total steel and aluminum exports was only around 16 percent.”

U.S. Economic Reports

The U.S. Bureau of Labor Statistics reported the economy added 313,000 jobs in February, well above the 200,000 estimate. The unemployment rate was unchanged at 4.1%. Traders were looking for a drop to 4.0%. Average hourly earnings remained a concern, coming in at 0.1%, below the 0.2% forecast. Essentially, wages grew less than expected, rising 2.6 percent on an annualized basis.

U.S. Equity Markets

The major U.S. stock indexes surged on Friday, driving the NASDAQ Composite to a record high after February jobs growth soundly beat expectations.

E-mini NASDAQ-100 Index
Daily June E-mini NASDAQ-100 Index

The tech-weighted index rose by 1.8 percent to 7.560.81 and hit intraday and closing records, erasing all of last month’s correction. The NASDAQ-100 Index, which is composed of the 100 largest companies in the NASDAQ Composite, also hit a record high. Friday’s session marked the first time since January 26 that either index reached a record high.

The NASDAQ’s strength was driven by strong performances in Facebook, Amazon, Netflix and Google.

Comex Gold
Daily April Comex Gold

Gold

Gold prices rebounded on Friday to close higher after initially dropping following the release of nonfarm payrolls data that far exceeded expectations. The price action was essentially driven by a two-sided trade in the U.S. Dollar.

Gold was also driven lower early in the session on the news that President Trump was prepared to meet North Korea’s Kim Jong Un sometime before May in what would be the first face-to face encounter between the countries’ leaders and could mark a breakthrough in a stand-off over the North’s nuclear weapons.

WTI Crude Oil
Daily May West Texas Intermediate Crude Oil

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil settled sharply higher, finishing up 3.10% and 2.88% respectively. Investors temporarily cast aside worries over rising U.S. production to focus on the strong jobs data, and optimism that Trump’s proposed meeting with North Korea’s Kim Jong Un could ease geopolitical tensions.

While the jobs data reflects the country’s strong economic conditions, and growth, which should lead to increased energy demand, the market was also supported by the news that Libya’s 70,000 barrels per day El Feel oilfield stayed shutdown despite the Petroleum Facilities Guard saying it had reached a deal to reopen it, according to a field engineer and local mediator.

FAANG Stocks Keep Rising: Is It a HODL?

What is “FAANG”?

FAANG is the acronym given to the world’s five topmost tech stocks according to market performance and capitalization. These tech giants are Facebook, Apple, Amazon, Netflix, and Alphabet (Google’s parent company).

The term FAANG is an expansion of FANG, the original acronym coined by CNBC’s Jim Cramer in 2013, but which at the time did not include Apple.

What are FAANG stocks?

FAANG stocks refer to the combined stock value of the five companies that are publicly listed on the NASDAQ stock exchange in New York. The companies are so referred because Wall Street sought to capture the impact these companies would have on the overall markets

The tech giants had a phenomenal 2017. The FAANG stock returns for each of the five were 53%, 56%, 46%, 55% and 33% in that order. Comparatively, the stock market NASDAQ had a 28% return. 2018 seems to have started on a high note with experts in agreement that two of the five are definitely a “buy” and the others a “hold”. We will have a look at what the experts are saying in our section on 2018 price outlook and prediction.

In terms of their market capitalization, the companies add up to a total of $2.5 trillion dollars.

  • FB $ 545 billion
  • AMZN $607 billion
  • AAPL$900 billion
  • NFLX$ 94 billion
  • GOOG$767 billion

When you combine their market value, it came to about $2.5 trillion; a value many believe is roughly 15% of the entire US economy. What’s more interesting is that these five companies have a market capitalization equaling France’s economy.

Apart from their trillion- dollar worth, the spectacular growth of the FAANG companies in 2017 saw prominent investors in the US and elsewhere buy into companies like Facebook and Amazon to increase their own funds.

The FAANGs prominence comes from their growth as seen in their increased year-over-year earnings. It is this growth that has secured the tech giants’ reputation as the best company stocks for investors.

Is FAANG in a bubble?

The FAANG stock market keeps on rising with its super performance for the last 4-5 years, and especially in 2017, being compared to the performance of the tech stocks that preceded the 2000 dotcom bubble burst.

There have been fears before that the tech stocks could be in a massive bubble. In June 2017, CNBC ran a commentary in which Goldman Sachs released a report on the FAANG group with a warning on valuation and concerns that the tech giants’ volatility had by then become extraordinarily too low.

However, Goldman’s report explained that the FAANG stocks have certain advantages over the tech firms in the 2000 dotcom bubble burst. It noted that the stocks of the five companies have a better cash flow, cash balances, and valuation.

Furthermore, analysts note that there is a big difference between today’s tech giants and those of the dotcom era that went burst. For instance, UBS points out those current trends in spheres like social media, e-commerce, cloud computing and machine learning gave the FAANG group a lot more room to wiggle because these are areas that are yet to be fully explored.

However, there are still fears out there that what we are witnessing are signs of a bubble. Alberto Gallo, of Algebris Investments, has a belief that $2.5 trillion tech-titans’ valuation and irrational behavior points out to a possible bubble. In his valuation assessment, he points out the stock pricing and unlimited earnings as bad indicators.

Although extremely loved by investors, the tech giants can’t be considered flawless.

Goldman analysts have noted that if there was low volatility, people would end up underestimating the inherent risks that include cyclical exposure, antitrust concerns or potentially, regulations that targeted online activities. The analysts have said that momentum in the FAANG group has seemingly built a kind of “valuation air pocket” leading to “cause for pause”.

In fact, Gallo ranks FAANG 6th on his list of top 10 bubbles to happen in the near future, meanwhile, Bitcoin bubble is ranked 5th.

More importantly, as the FAANG bears put it, growth stocks markets have been there before.

While many believe this won’t happen, it is noted by many experts that FAANG cannot lead the market forever. In fact, European tech firms just unveiled plans to de-FAANG the dominance of the US tech giants.

Now, compare that with the fast-rising cryptocurrency landscape where altcoins like Ethereum and Litecoin among others, look set to overtake Bitcoin, BTC and the FAANG share one very clear characteristic: they have completely dominated their respective fields. For instance, Bitcoin is the benchmark in the cryptocurrency market, and every one of the more than 1400 crypto coins aims to be better than Bitcoin. Less than 5% of the myriad cryptocurrencies will eventually go on to be big. Analysts have compared the FAANG stocks and how they dominate NASDAQ to what one or two altcoins would do in the crypto technology should Bitcoin burst.

Having said that, it is clear that the tech stocks of the five companies have picked up in 2018 where they left off in 2017. All, except Apple, are in positive territory.

For the last five years, the FAANG stocks have had an annualized return of 41%, compared to 16% return posted for the S&P’s 500. And the trend seems to be the same in 2018.

As FAANG stocks keep rising, is it advisable to HODL?

Hodling originated from a 2013 BitcoinTalk thread by a user named GameKyuubi. It basically means you sit tight on your stock even when the market trends indicate otherwise. When a stock value drops, a hodler rides the wave and avoids losing the stack by getting into emotional day trading. FAANG sticks had a remarkable bull run in 2017. Even if the bears are gearing up for the worst, 2018 figures indicate that the stocks are yet to hit ATHs. So, it is a HODL.

FAANG stocks predictions

2017 is behind us and the big question right now is where these companies will go in 2018 and beyond. Already, indications are that FAANG is off to a great start in 2018. Analysts had put valuations for the S&P 500 Index at 18.5 to 19.0 times as the expectation in per-share earnings. However, it is important for the investor to note that analysts are a bit cautious when calling the FAANG predictions. It is anticipated that the uptrend will be slow, but will surely pick up over time.

Apple Inc.

Apple is the biggest of the five FAANG. Apple’s stock is trading at a modest 15 forward price-to-earnings multiple against this year’s expected earnings. Apple has a trailing price-to-earnings multiple of roughly 19. Market analysts are saying that they expect Apple to actually return 6.90% to investors for the year. There is also a prediction for there to be a return of 1.45% in the form of dividends, so that comes to roughly 8.35% for the year.

The 52-week trading range is at a target of $118.21 to $177.20. If you look at that, you realize the predictions are pretty robust for Apple Inc. with a market cap of $900; Apple is the top-ranked company on the S&P 500 Index.

Facebook

For Facebook, the stock trade is put at a 28 forward P/E multiply projected earnings for 2018. Furthermore, analysts give it a trailing price-to-earnings multiple of 36. In terms of the price targets, industry experts have a consensus $210.79 as its price target.

Analysts are also looking at Facebook returning 12% to investors by close of the year.

Facebook’s 52-week trade range is put at $ 124.84 to $ 188.90 and that the social media giant has a market capitalization of $546 billion that is expected to grow. At the moment, Facebook is ranked 5th on the S&P 500 Index. Except for something unforeseen, Facebook’s growth is expected to have an uptrend in 2018.

Netflix

Netflix is the smallest company of the big five. Netflix’s stocks are trading with a 93 forward price-to-earnings multiple against its 2018 expected earnings. The company has a trailing price-to-earnings (P/E) multiple of 212. Stock market analysts are giving a prediction of Netflix returning about 2 percent to investors in 2018. This figure is based on the targeted consensus price of $217.70.

Netflix has a 52-week trading range put at $128.50 – $213.64. The current market cap of $94 billion is expected to grow in 2018 with increased subscriptions.

Amazon.com

Amazon’s stock is trading with a 156 forward price-to-earnings multiple against the 2018 market expected earnings. Market analysts have given it a trailing price-to-earnings multiple of about 320. With its robust business strategy, experts have called that Amazon will yield a 4% return on investments for its investors in 2018.this is based on the target of $1,300.87.

Amazon’s 52-week trading range is put at $799.50- $1,259.33, which is pretty good for any investor. It is expected that Amazon’s market cap of $607 billion will grow to keep it position four on the S&P 500.

Google (Alphabet)

The company is ranked 2nd on the S&P 500 Index. The company has two stock listings on the market; GOOG and GOOGL. Alphabet’s GOOGL stock is trading with a projected 26 forward price-to-earnings (P/E) multiple against its 2018 expected earnings.

Analysts predict a trailing price-to-earnings multiple of about 37. As such, experts are calling for Google (Alphabet) to break even during 2018’s trading period. The predictions are based on a target of $1,100.86.

When we look at the yearly trading range, Alphabet has a 52-week range with a target of $790.52 to $1,111.27 The Ad giant has a market capitalization of $769 billion, which is expected to grow when the company rolls out its self-driving cars.

Bottom line!

There is a lot that suggests that FAANG may see another bull run in 2018. Experts believe all five are yet to achieve their “ATH”. So, if you are looking to sell, now would not be the best time to do so.