S&P 500 Pulls Back As Traders Worry That China’s COVID Curbs May Hurt Global Growth

Key Insights

  • Rising coronavirus cases in China and the pullback in commodity markets put pressure on S&P 500.
  • Tesla stock tested yearly lows as traders bet that demand for the company’s cars in China would decline.
  • S&P 500 needs to settle back above the 3960 level to have a chance to gain sustainable upside momentum. 

S&P 500 Is Losing Ground At The Start Of The Week

S&P 500 pulled back towards the 3940 level as traders feared that rising coronavirus cases in China would hurt global growth and create additional supply chain problems. The tech-heavy NASDAQ Composite was down by more than 1% amid a strong sell-off in the tech segment.

Today’s pullback was led by energy stocks, which have found themselves under strong pressure after a WSJ report indicated that Saudi Arabia and other OPEC+ members may discuss a production increase of 500,000 bpd.

This report has been officially denied by Saudi Arabia, and WTI oil rebounded towards the $80 level after touching lows near $75.50. However, energy stocks remained under pressure. Diamondback Energy, Halliburton, Marathon Oil were down by 3% – 5% in today’s trading session.

Leading tech stocks have also moved lower today. Tesla, which is sensitive to news from China, was down by 6% and tested yearly lows below the $170 level.

Disney opened near the $100 level after Bob Iger retured as CEO. The stock declined towards the $97 level due to profit-taking after the strong move.

From a big picture point of view, S&P 500 needs additional positive catalysts to continue the rebound. It remains to be seen whether traders will find such catalysts ahead of Thanksgiving, as this period is characterized by slower trading activity.

S&P 500 Remains Stuck Below The 3960 Level

S&P 500

S&P 500 has settled below the 3960 level. The nearest support for S&P 500 is located at 3920. If S&P 500 gets below 3920, it will move towards the next support level at the 20 EMA near the 3885 level. A move below the 20 EMA will push S&P 500 towards the support at 3865.

On the upside, a move above the 3960 level will open the way to the test of the resistance at 4000. In case S&P 500 manages to climb above this level, it will head towards the resistance at 4015. A successful test of the resistance at 4015 will open the way to the test of the next resistance level, which is located at 4040.

For a look at all of today’s economic events, check out out economic calendar.

Bob Iger Back in Charge as Disney CEO; Shares Jump 9%

Disney shares are bucking the early negative trend in the U.S. stock market on Monday rising more than 9% after the media giant announced that Bob Iger would return as CEO, effective immediately.

The move was announced late Sunday after Iger’s hand-picked successor as CEO, Bob Chapek, came under fire for his management of the entertainment giant.

Iger Back at the Helm at Disney

“It is with an incredible sense of gratitude and humility – and, I must admit, a bit of amazement – that I write to you this evening with the news that I am returning to The Walt Disney Company as Chief Executive Officer, Iger wrote to employees in an email, which was obtained by CNBC.

Iger has signed on to work as CEO for two years, Disney said Sunday, “with a mandate from the Board to set the strategic direction for renewed growth and to work closely with the Board in developing a successor to lead the Company at the completion of his term.”

How Iger Got His Former Job Back

The wheels for Iger’s return were likely set in motion on November 8 when Disney fell short of expectations for profit and key revenue segments during the fiscal quarter and warned strong streaming growth for its Disney+ platform may taper going forward.

After that announcement, shares of the company fell roughly 8%.

The company’s quarterly results missed Wall Street expectations on the top and bottom lines, as both its parks and media divisions underperformed estimates.

At the same time, Chief Financial Officer Christine McCarthy tempered investor expectations for the new fiscal year, forecasting revenue growth of less than 10%. The company reported 2022 fiscal revenue growth of 22%.

Fourth-quarter revenue in the media and entertainment division fell 3% year over year to $12.7 billion during the year-earlier period, as the company’s direct-to-consumer and theatrical business struggled. Analysts has expected segment revenue of $13.9 billion, according to StreetAccount estimates.

Disney+ growth is expected to slow in the fiscal first quarter, Disney executives warned in a conference call.

For a look at all of today’s economic events, check out our economic calendar.

Benchmark S&P 500 Index Struggles as China COVID Cases Rise; Disney Soars

The major U.S. stock indexes are drifting lower shortly before the cash market opening on Monday at the start of this holiday shortened week.

Helping to cap gains are concerns over slowing growth due to increasing COVID cases in China and uncertainty over Fed policy. The Dow and S&P 500 Indexes, however, are getting a slight lift from a jump in shares of Disney.

At 13:30 GMT, blue chip Dow Jones Industrial Average futures are trading 33757.00, down 18.00 or -0.05%. The benchmark S&P 500 Index is at 3961.00, down 13.00 or -0.33% and the tech-heavy NASDAQ Composite is trading 11650.75, down 57.25 or -0.49%.

S&P 500 Index

COVID-Fueled Demand Destruction in China Pressuring Stocks Overnight

Rising COVID cases in China and reports of three deaths in the country are raising concerns over economic growth. Some investors are worried that a lengthy shutdown of certain regions could drive China into recession and consequently the United States, its biggest trading partner.

Reuters is reporting that New COVID case numbers in China remained close to April peaks as the country battles outbreaks nationwide and in major cities. Schools in some districts in the capital Beijing switched to online classes on Monday after officials asked residents to stay home, while the southern city of Guangzhou ordered a five-day lockdown for its most populous district.

Uncertainty Over Fed Policy Encouraging Investors to Trim Positions

U.S. stocks are consolidating near the low end of its five-day trading range on Monday as uncertainty builds regarding the size and duration of future Federal Reserve interest rate hikes.

After rallying to a multi-month high early last week on bets of a 50-basis point rate hike by the Fed at its December meeting, prices are drifting sideways-to-lower. The catalyst behind the potentially bearish price action is hawkish comments from several Fed officials, especially St. Louis Fed President James Bullard.

Bullard spiked prices lower last week when he said the Fed’s target policy needs to rise to at least a range between 5.00% and 5.25% from the current level of just below 4.00% to be “sufficiently restrictive” to curb inflation, though he would defer to Fed Chair Jerome Powell regarding how much higher to move rates at upcoming policy meetings.

That comment alone was enough to encourage investors to take a little of their money off the table.

Daily Walt Disney

Disney Shares Jump 9% in the Premarket Session

Helping to give the Dow and the S&P 500 Index a slight boost on Monday is a sharp rise in shares of Disney.

Walt Disney Company soared 9% in premarket trading as Bob Iger returned as CEO less than a year after he retired.

The move was fueled by the need for the entertainment company to boost investor confidence and profits at its streaming media unit.

For a look at all of today’s economic events, check out our economic calendar.

S&P 500 Retreats As Traders Reduce Risks Ahead Of U.S. Inflation Reports

Key Insights

  • S&P 500 moved towards the support level at 3760 amid unclear results in U.S. elections. 
  • Traders have also paid attention to the major sell-off in crypto markets, which hurt market sentiment towards riskier assets. 
  • Energy stocks declined as WTI oil pulled back towards the $86 level.

Disney Falls As Quarterly Report Misses Estimates

S&P 500 is under strong pressure as traders evaluate the unclear results of the U.S. midterm elections and worry about the huge sell-off in crypto markets.

The sell-off is led by energy stocks, which are moving lower due to the strong pullback in oil markets. Stocks like Occidental Petroleum, Hess Corporation, and Devon Energy are down by 5-7% in today’s trading session.

Disney is down by 13% as its quarterly report missed analyst expectations. The market is also disappointed by the near-term outlook for the company’s business.

Tesla is down by 6% as traders react to Elon Musk’s sales of the stock. To raise money for his Twitter deal, Musk sold roughly $4 billion worth of Tesla stock in recent days.

NVIDIA is down by 5% as traders are worried that the sell-off in crypto markets will reduce demand for company’s products.

From a big picture point of view, the sell-off is broad, and all market segments have found themselves under material pressure.

Traders Prepare For U.S. Inflation Reports

S&P 500

Traders should keep in mind that the U.S. will release inflation data tomorrow. Analysts expect that Inflation Rate declined from 8.2% in September to 8% in October. It looks that some market participants have decided to reduce their risks ahead of this important report.

S&P 500 is currently trying to settle below the support level at 3760. In case this attempt is successful, S&P 500 will move towards the next support at 3725. A move below this level will open the way to the test of the support at 3690.

On the upside, the nearest resistance level for S&P 500 is located at 3805. If S&P 500 climbs back above this level, it will move towards the resistance at 3835. In case S&P 500 manages to settle  above 3835, it will head towards the resistance level at 3885.

For a look at all of today’s economic events, check out our economic calendar.

Hurricane Ian Spells Trouble for the Fed and Its Inflation Goals

Today, the US State of Florida woke up to the devastation of Hurricane Ian. As residents of the worst-hit parts make the journey home, residents and businesses will begin to assess the financial impact of a storm that peaked at a category four before heading back out to sea.

With parts of the State of Florida still under water and facing high winds and heavy rain, news media outlets report that more than two and a half million are without electricity.

President Joe Biden declared a major disaster, releasing federal-level disaster relief funds to help the State tackle the destruction.

While businesses in the path of Hurricane Ian will face the battle of rebuilding, there will be the indirect effects of the storm on some of the country’s largest multinationals.

Supply Chain Disruption, Fuel Prices, and Inflation

One immediate effect of Hurricane Ian will be on supply chains in and out of Florida.

Across the State, fuel terminals are closed, with oil companies evacuating employees ahead of the storm’s arrival. As reported by Reuters, BP Plc (BP), Chevron Corp (CVX), Occidental Petroleum Corp. (OXY), and Hess Corp (HES) shut down operations in the State.

In the aftermath of the storm, infrastructure is an issue. Reportedly, fuel trucks can’t reach affected parts of the State, with lengthy waiting times likely to impact businesses reliant upon diesel-fueled generators. Shortage concerns were significant enough for the White House to issue a warning to Oil Companies. President Biden reportedly said,

“Do not – let me repeat, do not, do not – use this as an excuse to raise gasoline prices in America.”

According to the US Joint Economic Committee, gasoline prices surged by 46 cents a gallon immediately after Katrina. The JEC noted that ‘some consumers paid almost twice what they paid the year before.’ Higher gasoline prices would spell more trouble for the US economy and the FED grappling with inflation.

Elevated prices would extend beyond the pump, with businesses having to pass on running costs to consumers. The JEC report noted that ‘fuel prices increased quickly after the supply disruption. However, the JEC also observed that prices decreased more slowly after capacity was restored.’

One other area of interest is the Sunshine State’s citrus industry. According to a CNN report, Ian threatened 75% of the citrus belt with heavy rain and floods. With citrus production reportedly under pressure ahead of the storm, supply shortages would lead to higher food prices, another headache for consumers and for the Fed.

Retailers and the Services Sector Likely to Bear the Brunt of the Pain

Reuters reported that Amazon.com (AMZN) paused operations in some sites, with Walmart (WMT) and Sam Clubs closing down more than 100 stores. Walt Disney (DIS) also shut down theme and water parks on Wednesday and Thursday.

With food and fuel prices keeping US inflation at four-decade highs, retailers will likely add to the inflation problem. As water levels decline, supply issues, and strong demand, will drive prices higher.

While the global equity markets may not have reacted to news updates from the State of Florida, the impact may be evident in the months ahead. Florida is among the top five US states by GDP, with a GDP equivalent to Mexico.

US Equity Markets Tumble as Inflation and Economic Woes Hit Sentiment

At the time of writing, the Dow and the S&P 500 were down 1.64% and 1.88%, respectively, with the NASDAQ 100 sliding by 3.01%.

Amazon.com was down 3.34%, with Disney and Walmart seeing losses of 1.73% and 0.50%, respectively. Oil companies were also in the red, with Chevron down 1.41% and BP PLC falling by 1.28%.

US Indices Pare Back from New Multi-month Highs on Fed Tightening Reservations; Nasdaq 100 Drops 0.65%

Key Points

  • The major US indices pulled back from mid-session highs after initially rallying on another downside US inflation surprise.
  • The S&P 500 ended the session flat just above 4,200 while the Nasdaq 100 ended 0.65% lower.
  • Tesla was hit as lawmakers pushed for it to be investigated. Disney rallied after Disney+ overtook Netflix for subscribers.

Indices Pull-back From Multi-Month Highs Amid Fed Tightening Reservations

Having surged by as much as 1.15% when it hit fresh highs since early May in the 4,250s earlier in the session, with sentiment bolstered after further evidence alluding to an easing of US price pressures, the S&P 500 fell back to close the session flat just above 4,200. Fed policymakers speaking in the last few days have been keen to emphasize that the Fed’s inflation fight remains far from won, despite the latest CPI and PPI figures suggesting that US price pressures are now past their peak.

The continued hawkish tone of Fed policymakers discouraged investors from getting too aggressive in chasing stocks higher and, by the latter half of the US session, profit-taking had set in, pushing the major indices lower. According to the CME’s FedWatch Tool, markets were on Thursday assigning a 59.5% probability that the Fed hikes interest rates by 50 bps in September and a 40.5% chance that they go with a 75 bps rate hike.

Recent data (like last week’s ISM surveys and official jobs report) have shown that US growth remains solid at the start of Q3. A few analysts have been expressing concerns that, whilst peak inflation may be in as so-called “cost-push” inflationary pressures fade, demand in the US economy could remain hot enough to keep inflation elevated above the Fed’s 2.0% target for some time (reffered to as “demand-pull” inflation).

Some analysts fear that equity markets may be getting complacent to the risk that the Fed still needs to take interest rates above 4.0% in 2023 in order to snap demand. Data showing another small rise in the weekly number of initial jobless claims in early August will do little to ease these concerns as the weekly jobless claims number remains at levels that have historically been consistent with a healthy labor market.

Tesla Leads Nasdaq 100 Decline, Disney+ Overtakes Netflix in Subscriber Numbers

The big tech/growth stock-heavy Nasdaq 100 index, which also hit its highest levels since early May midway through the session, ultimately finished Thursday trade down 0.65%. The decline was led by the likes of Tesla, Amazon, Alphabet and Microsoft. Tesla’s stock price was probably weighed by a Reuters report on Thursday that US lawmakers have asked the US National Highway Traffic Safety Administration about whether it is considering an investigation into the “mounting number of fatalities involving Tesla vehicles crashing into tractor trailers” while using autopilot.

A jump in crude oil prices meant that the S&P 500 GICS Energy sector was the best performer of the bunch, gaining over 3.0% on the day. Health Care, Consumer Discretionary and Information Technology were the worst performing sectors, losing between 0.5-0.7% each. In terms of notable earnings, Disney’s share price surged nearly 5.0% to its highest since mid-April after it revealed that its Disney+ subscription streaming service surpassed Netflix for the first time after reaching 221.1 million as of the start of July.

Coca-Cola Celebrates International Friendship Day with Polygon (MATIC)

Key Insights:

  • Polygon (MATIC) slipped by 0.08% on Sunday to end the week with a 2.34% loss.
  • The Sunday loss came despite Polygon announcing the Coca-Cola launch of sharable collectibles on Polygon to celebrate International Friendship Day.
  • Technical indicators are bullish, with MATIC sitting above the 50-day EMA.

On Sunday, Polygon (MATIC) slipped by 0.08%. Following a 2.15% slide on Saturday, MATIC ended the week down by 2.34% to $0.9071.

A bearish start to the session saw MATIC slide to a low of $0.8928 before making a move.

Finding support at the First Major Support Level at $0.8936, MATIC rallied to a late high of $0.9253. However, falling short of the First Major Resistance Level at $0.9316, MATIC fell back to end the day at sub-$0.91.

While down for the week, the July news of Walt Disney (DIS) including Polygon in the 2022 Accelerator gave MATIC a new lease of life. At $0.90, MATIC sits well above the June 18 current year low of $0.3159.

On Sunday, Polygon was back in the news.

Polygon Studios Announces Coca-Cola Digital Collectible Drop on Polygon

Polygon Studios took to Twitter (TWTR) on Sunday, announcing a Coca-Cola (COKE) digital collectible drop on Polygon.

In a series of tweets, Polygon Studios tweeted,

“@cocacola just launched first-of-a-kind, generative, and shareable collectibles #onPolygon to celebrate International Friendship Day.”

Polygon Studios went on to say,

“The collectibles have a unique share-to-reveal functionality where each artwork will reveal after being shared with a friend.”

The Coca-Cola Company shared the news with the headline “Coca-Cola Marks First Anniversary in the Metaverse with Collectibles Drop on International Friendship Day.”

Coca-Cola went on to say,

“We will continue to learn in this fast-moving space through limited-edition collectible launches tied to key cultural moments, with a focus on building our virtual ecosystem by surprising and delighting fans.”

Coca-Cola has reportedly created more than 4,000 digital collectibles, starting on International Friendship Day 2021. The soft-drinks company has celebrated a series of cultural moments with digital collectibles, including

For Polygon and MATIC, collaborations and partnerships with companies such as Disney and Coca-Cola can only be positive.

Polygon (MATIC) Price Action

At the time of writing, MATIC was up 0.20% to $0.9089

MATIC finds early support
MATICUSD 080822 Daily Chart

Technical Indicators

MATIC will need to avoid the $0.9084 pivot to target the First Major Resistance Level (R1) at $0.9240 and the Sunday high of $0.9253.

A broad-based crypto rally would support a return to $0.92.

In the event of another extended rally, the bulls could target the Second Major Resistance Level (R2) at $0.9409 and the Saturday high of $0.9411.

The Third Major Resistance Level sits at $0.9743.

A fall through the pivot would bring the First Major Support Level (S1) at $0.8915 into play. Barring an extended sell-off, MATIC should steer clear of sub-$0.89 and the Second Major Support Level (S2) at $0.8759.

The Third Major Support Level sits at $0.8434.

MATIC pivot level the key
MATICUSD 080822 Hourly Chart

Looking at the EMAs and the 4-hourly candlestick chart (below), it was a bullish signal. This morning, MATIC sat above the 50-day EMA, currently at $0.9054.

The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA widening from the 200-day EMA, both bullish MATIC price signals.

A hold above the 50-day EMA would support a return to $0.92 to target the Major Resistance Levels. However, a fall through the 50-day EMA would leave S1 in play. However, MATIC should avoid the 100-day EMA, currently at $0.8780, and S2 ($0.8759).

EMAs bullish
MATICUSD 080822 4-Hourly Chart

AMTD Digital: Mysterious Stock Gets Bigger Than Disney

Key Insights

  • AMTD Digital touched highs at $2555 a few days after an IPO priced at $7.80.
  • There were no news to move the stock. 
  • In the longer-term, AMTD Digital will fall from current levels. 

Is Meme Stock Trading Back In Fashion?

While some traders have already forgotten about meme stocks, miracles still happen in the market. ADS (American Depositary Share) of AMTD Digital, a digital solutions platform from Hong Kong, soared from $7.80 to $2555 (!) after the IPO. The stock has already pulled back towards the $1000 level, but the rally is still enormous.

There were no news to trigger the huge rally. As a response to the abnormal price action, AMTD Digital published a “thank you note” to investors on its website. The company stated: “To our knowledge, there are no material circumstances, events nor other matters relating to our company’s business and operating activities since the IPO date.”

Even after the major pullback, AMTD Digital has a market cap of more than $203 billion. AMTD Digital is more expensive than Oracle, Nike, Disney, or McDonald’s!

What’s Next For AMTD Digital?

Not surprisingly, traders from social media forums like WallStreetBets have already noticed the stock. However, there were no active discussions at the start of the rally, so it is not clear what served as the key catalyst behind the move.

Traders should note that AMTD IDEA is a majority shareholder of AMTD Digital. Shares of AMDT IDEA soared on August 2, but quickly found themselves under pressure and started to pull back. Judging by the market action in AMTD IDEA, traders do not expect that the gains in AMTD Digital will hold, as the market capitalization of AMTD IDEA is just $1.93 billion.

This is not surprising as a little-known company with yearly revenue of less than $200 million has suddenly received a valuation that exceeds the market cap of huge global corporations.

Trading in AMTD Digital will remain highly volatile in the upcoming days. In the longer-term, the stock will move towards the IPO valuation. Traders who want to sit through all the volatility should note that they are risking losing most of their money.

For a look at all of today’s economic events, check out our economic calendar.

Top 5 Crypto Pairs to Watch this Week BTC, ETH, LDO, MATIC, and SOL

Key Insights:

  • Last week, Bitcoin (BTC) saw red, though the loss was modest, with bullish sentiment creeping into the crypto market.
  • However, headwinds lingered, with Fed monetary policy, economic uncertainty, and a likely shift in the regulatory landscape testing investor support.
  • Despite the headwinds, technical indicators are bullish, with the EMAs for BTC, ETH, LDO, MATIC, and SOL all delivering bullish signals.

In the week ending July 17, the total crypto market cap increased for a second consecutive week. On Wednesday, a sharp pickup in investor appetite delivered much-needed support. The broader crypto market had seen deep red on Wednesday before a four-day rally reversed losses from early in the week.

Market reaction to US economic indicators and Fed chatter delivered the broader crypto market moves in the week.

This week, the US economic calendar is on the quieter side. Investors will need to wait until Thursday and Friday for key stats to provide direction.

FOMC members will also be silent, with the Fed now in the blackout period that extends from July 16 to July 28.

The lack of external market forces could see the NASDAQ influence, while network updates from the crypto market will also draw interest.

Amidst the uncertainty and lengthening crypto winter, a number of coins stand out from the pack, with technical indicators delivering bullish signals.

Bitcoin (BTC)

Last week, bitcoin fell by 0.26% to end the week at $20,793. The choppy week saw BTC fall to a Wednesday low of $18,919 before striking a Sunday high of $21,658.

Steering clear of sub-$18,000 and the current year low of $17,601 was the key, though BTC also failed to return to $22,000, last visited on July 8 and June 16 before that.

This week, BTC will likely remain the broader crypto market barometer.

With the Bitcoin Fear & Greed Index sitting deep within the “Extreme Fear” zone, a bitcoin breakout has looked unlikely, with investors locking in profits early to avoid the risk of a slide back to sub-$20,000.

However, a BTC move through to $22,000 could shift sentiment and give the bulls a look at $25,000.

At the time of writing, BTC was up 2.39% to $21,289.

Crypto barometer
BTCUSD Daily Chart 180722

Looking at the 4-hourly chart and the EMAs, the signal was bullish. On Monday, bitcoin moved towards the 200-day EMA, currently at $21,847.

The 50-day EMA converged on the 100-day EMA, with the 100-day EMA narrowing to the 200-day EMA, both positive BTC indicators.

A bullish cross of the 50-day EMA through the 100-day EMA would bring $22,000 into play to give the bulls a run at $25,000.

However, a failed bullish cross would likely see BTC slide back to sub-$20,000 before any meaningful recovery.

EMAs BTC bullish
BTCUSD 4-Hourly Chart 180722

Ethereum (ETH)

Last week, Ethereum rallied by 14.7% to end the week at $1,338. A bearish start to the week saw ETH fall to a Wednesday low of $1,010 before striking a Saturday high of $1,400.

A shift in sentiment towards Fed monetary policy and the US economy supported a breakout from the Wednesday low. Going into the weekend, updates on the Ethereum Merge delivered a bullish Saturday session, with ETH visiting $1,400 for the first time since June 13.

For Ethereum, news updates on the Merge will remain the key driver though price volatility is unlikely to ease. Ethereum could succumb to crypto market forces should investor appetite wane.

There is also the risk of a retracement to the Wednesday low should developers announce a delay to the September Merge.

At the time of writing, ETH was up 5.31% to $1,409.

Crypto support
ETHUSD Daily Chart 180722

Looking at the 4-hourly chart and the EMAs, the signal was bullish. On Monday, Ethereum broke clear of the 200-day EMA, currently at $1,265, to target a return to $1,500.

The 50-day EMA narrowed to the 200-day EMA, with the 100-day EMA closing in on the 200-day EMA, both positive ETH indicators.

A bullish cross of the 50-day EMA through the 200-day EMA would support a breakout from $1,500 to bring the June high of $1,972 into play.

However, a fallback through the 50-day EMA would likely see ETH retest support at $1,000.

EMAs bullish
ETHUSD 4-Hourly Chart 180722

Lido DAO (LDO)

Last week, LDO surged by 155% to end the week at $1.626. A bearish start to the week saw LDO fall to a Tuesday low of $0.5709 before striking a Sunday high of $1.832.

LDO enjoyed five bullish sessions in the week, with US inflation and hawkish Fed chatter having a muted impact mid-week.

Progress towards the ETH Merge remained the key driver for LDO. According to Dune Analytics, staking Ether was on the rise, driving LDO towards $2.00 levels.

The LDO correlation with ETH leaves LDO in the hands of ETH price action, which hinges on Merge updates. However, staking figures will also draw investor interest in the week.

At the time of writing, LDO was up 5.16% to $1.7215.

LDO on the move
LDOUSD Daily Chart 180722

Looking at the 4-hourly chart and the EMAs, the signal was bullish. On Monday, LDO continued to move clear of the 50-day EMA, currently at $1.0649 to target a return to $2.00.

The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA breaking clear of the 200-day EMA, both positive LDO indicators.

A further widening of the 100-day EMA from the 200-day EMA would support the continued run to $2.00. However, LDO should avoid sub-$1.50 and the 50-day EMA to support the current bullish trend.

EMAs LDO bullish
LDOUSD 4-Hourly Chart 180722

Polygon (MATIC)

Last week, MATIC jumped by 31.8% to end the week at $0.7525. Tracking the broader crypto market, MATIC fell to a Wednesday low of $0.5212 before striking a Sunday high of $0.7891.

While succumbing to crypto market forces early in the week, MATIC bucked the broader market trend through the second half of the week.

While finding the support of the broader market, news of Walt Disney (DIS) selecting Polygon to join the 2022 Disney Accelerator put MATIC front and center.

In the week ahead, MATIC should continue to find strong support, though downside risks remain. A broad-based crypto sell-off could test investor support should fears of a US economic recession resurface. However, technical indicators signal a bullish trend formation, which should support a MATIC return to $1.00.

At the time of writing, MATIC was up 6.27% to $0.7997.

MATIC on the move
MATICUSD Daily Chart 180722

Looking at the 4-hourly chart and the EMAs, the signal was bullish. On Monday, MATIC continued to move clear of the 50-day EMA, currently at $0.6675, to target a return to $1.00.

The 50-day EMA pulled away from the 100-day EMA, with the 100-day EMA breaking clear of the 200-day EMA, both positive MATIC indicators.

A further widening of the 100-day EMA from the 200-day EMA would support the continued run to $1.00. However, MATIC will need to avoid sub-$0.70 and the 50-day EMA to support the current bullish trend.

EMAs bullish
MATICUSD 4-Hourly Chart 180722

Solana (SOL)

Last week, SOL rose by 5.35% to end the week at $38.62. Tracking the broader crypto market, SOL fell to a Wednesday low of $31.85 before striking a Sunday high of $41.07.

A bearish Sunday afternoon session left SOL at sub-$40 and with a relatively modest weekly gain.

While steering clear of sub-$30 and the current year low of $25.84 was key, SOL also failed to hold onto the $40 handle.

SOL tracked the broader crypto market through the week, with news of Solana Mobile inviting pre-orders for the SAGA phone adding to the upside.

SAGA pre-order numbers, project news updates from the Solana ecosystem, and the NFT news will need to support a breakout from current levels.

This week, SOL will likely continue to track bitcoin and the broader crypto market. However, technical indicators signal a bullish trend formation, which could give SOL a run at $50.

At the time of writing, SOL was up 5.02% to $40.56.

Crypto support
SOLUSD Daily Chart 180722

Looking at the 4-hourly chart and the EMAs, the signal was bullish. On Monday, Solana broke clear of the 200-day EMA, currently at $37.69.

The 50-day EMA pulled away from the 100-day EMA and narrowed to the 200-day EMA, both positive SOL indicators.

A bullish cross of the 50-day EMA through the 200-day EMA would bring $45 into play to give the bulls a run at $50.

However, a fall through the 200-day EMA would bring sub-$35 back into play.

EMAs bullish
SOLUSD 4-Hourly Chart 180722

Crypto Market Daily Highlights – ETH Leads the Crypto Top Ten

Key Insights:

  • It was another bullish session for the crypto top ten, with Ethereum (ETH) leading the way.
  • The upside came despite a spike in US wholesale inflation, with FOMC member chatter of a 75-basis point rate hike easing fears of a 100-basis point hike later this month.
  • The total crypto market cap rose by $23 billion to log the second increase of the week.

It was a bullish Thursday session for the crypto top ten. Bitcoin (BTC) consolidated the Wednesday rebound, while ETH bounced back to revisit $1,200.

A spike in US wholesale inflation and weak jobless claims figures tested support for riskier assets.

The US wholesale annual rate of inflation accelerated from 10.9% to 11.3% in June, beating a forecasted 10.7%. In the week ending July 8, jobless claims rose from 235k to 244k, adding to the bearish sentiment.

Later in the US session, however, riskier assets found support from Fed Governor Christopher Waller, who supported a 75-basis point rate hike in July. The latest consumer price and nonfarm payroll figures have brought a 100-basis point rate hike onto the table.

Market reaction to Waller’s comments was evident, with the crypto market rising in response.

The NASDAQ 100 avoided a fourth consecutive day in the red, eking out a 0.03% gain ahead of US retail sales figures due later today.

crypto - NASDAQ
Total Market Cap – NASDAQ – 150722 5 Min Chart

At the time of writing, the NASDAQ 100 Mini was up 61 points, with the retail sales figures likely the final piece of the jigsaw for the Fed. Solid numbers would support the more hawkish rate hike bets. Amidst increased sensitivity to FOMC member chatter, Fed commentary will also draw plenty of interest.

The Total Crypto Market Cap Returns to $900bn

A mixed Thursday session saw the crypto market cap fall to a day low of $855 billion before finding support. Investor reaction to the US wholesale inflation and jobless claims figures weighed before a jump to a high of $914 billion.

While a late pullback limited the upside, investors poured a further $23 billion back into the market to take the crypto market cap up $37 billion for July.

Crypto market cap
Total Market Cap 150722 Daily Chart

The Crypto Market Movers and Shakers from the Top Ten and Beyond

ETH rallied by 7.04% to lead the way, with BNB (+3.47%) and SOL (+6.31%) finding strong support.

ADA (+0.68%), BTC (+1.71%), DOGE (+0.87%), and XRP (+2.93%) trailed the front runners.

From the CoinMarketCap top 100, Uniswap (UNI) and Polygon (MATIC) were among the front runners, with gains of 14.70% and 10.94%, respectively.

At the other end of the table, TerraClassicUSD (USTC) and Decred (DCR) fell by 11.25% and 1.22%, respectively, to buck the broader market trend.

Total Crypto Liquidations Slip Back in Bullish Session

On Thursday, 24-hour liquidations eased back as the crypto market brushed aside wholesale inflation numbers from the US.

This morning, 24-hour liquidations stood at $180 million, down from $230 million on Thursday.

Liquidated traders over the last 24 hours declined to also reflect improving market conditions. At the time of writing, liquidated traders stood at 51,568 versus 72,955 on Thursday.

One-hour and four-hour liquidations showed improving market conditions at the turn of the day.

According to Coinglass, one-hour liquidations stood at $2.41 million, down from $7.12 million on Thursday. Four-hour liquidations stood at $9.20 million, down from $13.28 million on Thursday.

Crypto liquidations
Total Crypto Liquidations 150722

Daily News Highlights

  • CEL Token price plunged 50% in response to Celsius filing for bankruptcy.
  • Walt Disney (DIS) selected Polygon (MATIC) to join the 2022 Disney Accelerator.
  • The crypto winter hit Open Sea, which announced a 20% reduction in headcount
  • Uniswap surged in response to Robinhood (HOOD) listing.
  • The UK’s Financial Conduct Authority (FCA) called for global crypto rules to keep the markets clean.

Disney selects Polygon (MATIC) to Join the 2022 Disney Accelerator

Key Insights:

  • Polygon (MATIC) rallied by 19% on Wednesday, with the broader crypto market delivering support.
  • News of the Polygon inclusion in the Walt Disney (DIS) 2022 Disney Accelerator also delivered support.
  • Technical indicators are bullish, with MATIC sitting above the 50-day EMA.

On Wednesday, Polygon (MATIC) rallied by 19.21%. Reversing a 4.83% slide from Tuesday, MATIC ended the day at $0.6385.

A choppy session saw MATIC slide to a low of $0.5212 before making a move.

Steering clear of the First Major Support Level at $0.5157, MATIC rallied to a late high of $0.6451.

MATIC broke through the First Major Resistance Level at $0.5741 and the Second Major Resistance Level at $0.6126 to end the day at $0.6385.

While US inflation figures for June sent MATIC into the deep red, a broad-based crypto rebound delivered support.

Adding support was news of Walt Disney including Polygon in the 2022 Accelerator.

Polygon (MATIC) Joins the 2022 Disney Accelerator

On Wednesday, Walt Disney announced six companies joining the 2022 Disney Accelerator.

The Disney Accelerator is a business development program that supports the growth of innovative companies globally.

According to the announcement,

“This year’s Disney Accelerator class is focused on building the future of immersive experiences and specializes in technologies such as augmented reality (AR), non-fungible tokens (NFTs), and artificial intelligence (AI) characters.”

The announcement went on to say,

“Over the course of the program, each participant company will receive guidance from Disney’s senior leadership team, as well as a dedicated executive mentor.”

The companies listed in the 2022 Disney Accelerator include Flickplay, Inworld, Lockerverse, Obsess, Polygon, and Red 6.

Polygon CEO Ryan Wyatt took to Twitter, saying,

“We are the only blockchain selected.”

Wyatt added,

“It speaks volumes to the work being done here, and where we’re going as a company.”

Polygon (MATIC) Price Action

At the time of writing, MATIC was up 0.31% to $0.6405

MATIC on the move
MATICUSD 140722 Daily Chart

Technical Indicators

MATIC will need to avoid the $0.6016 pivot to target the First Major Resistance Level at $0.6821.

A broad-based crypto rally would support a breakout from the Wednesday high of $0.6451.

In the event of another extended rally, the bulls could target resistance at $0.70 and the Second Major Resistance Level at $0.7253.

The Third Major Resistance Level sits at $0.8494.

A fall through the pivot would bring the First Major Support Level at $0.5582 into play. Barring an extended sell-off, MATIC should steer clear of sub-$0.55 and the Second Major Support Level at $0.4774.

MATIC resistance levels in play
MATICUSD 140722 Hourly Chart

The EMAs and the 4-hourly candlestick chart (below) send a bullish signal. This morning, MATIC sat above the 50-day EMA, currently at $0.5594.

The 50-day EMA pulled away from the 200-day EMA, with the 100-day EMA narrowing to the 200-day EMA, both bullish signals.

A hold above the 50-day EMA and a bullish cross of the 100-day EMA through the 200-day EMA would signal a breakout session.

EMAs bullish
MATICUSD 140722 4-Hourly Chart

Disney Is Testing Yearly Lows, Here Is Why

Key Insights

  • Disney’s fiscal Q2 report missed analyst estimates, and the stock made an attempt to settle below the $100 level. 
  • Traders are worried that the company will not be able to show strong growth in the near term. 
  • The stock has already lost about half of its value from the highs that were reached back in 2021, which could attract speculative traders. 

Disney Stock Falls After Quarterly Report

Shares of Disney gained additional downside momentum and tested yearly lows after the company released its fiscal second quarter report.

Disney reported revenue of $19.24 billion and adjusted earnings of $1.08 per share, missing analyst estimates on both earnings and revenue.

The company noted that it added 7.9 million Disney+ subscribers in the quarter, but this growth failed to provide any support to the stock.

Meanwhile, Disney’s park segment continued to rebound. The revenue in this segment has more than doubled on a year-over-year basis.

Nevertheless, the market is worried about Disney’s ability to grow its revenue and earnings at a sufficient pace. These worries are caused by the general nervousness in the market amid rising interest rates and the potential slowdown of the economy.

What’s Next For Disney Stock?

Currently, Disney is expected to report earnings of $4.15 per share in the current year and $5.4 per share in the next year, so the stock is trading at 25 forward P/E.

S&P 500 remains under significant pressure, and traders are worried about the general health of the economy amid high inflation. In this environment, it is not clear whether the current Disney valuation is cheap enough to attract more investors.

At the same time, the stock has already lost roughly half of its value from the highs that were reached back in 2021. As the revenue of the park segment continues to grow while Disney+ subscriptions increase, analyst estimates may move higher, which could provide more support to Disney shares after the strong pullback.

For a look at all of today’s economic events, check out our economic calendar.

Walt Disney Near Two-Year Low Ahead of Report

Dow component Walt Disney Co. (DIS) reports Q2 2022 results next week, with analysts looking for a profit of $1.19 per-share on $20.04 billion in revenue. If met, earnings-per-share (EPS) will mark a 51% profit increase compared to the same quarter last year, when renewed Covid restrictions delayed reopening plans. The stock rallied to 157 after beating Q1 estimates in February but that buying spike marked the highest high in the last three months, ahead of a major decline that’s relinquished 25% of its value.

Politics vs. Profits

The Mouse has lost nearly 45% in two months since posting an all-time high above 200 in March, close to repeating 2020’s 49% somersault. Worse yet, the company is entangled in hot-button social justice issues, practically ensuring that half of its diverse customer base is angry with its actions. That’s no way to protect an American brand that’s defined wholesome family entertainment since “Steamboat Willie” was released in 1928.

Disney rallied in 2020 on the rapid growth of its streaming service but recent subscriber numbers have been mixed, for the same reason that Netflix Inc. (NFLX) recently warned about subscriber losses in the second quarter. Many who were stuck at home with kids in the first year of the pandemic subscribed to Disney+ to keep them engaged between Zoom school sessions. That phenomenon ’pulled forward’ future sales, generating a classic saturated market for streamers.

Wall Street and Technical Outlook

Wall Street has been asleep at the wheel during the Disney decline, generating an ‘Overweight’ consensus based upon 21 ‘Buy’, 2 ‘Overweight’, and 8 ‘Hold’ recommendations. Worse yet, price targets currently range between a low of $130 and a Street-high $229 but the stock will trade on Friday more than $20 below the low target. This huge disconnect highlights the failure of analysts to measure the financial impact of the Netflix warning and social justice controversy.

Walt Disney finally cleared 2015 resistance at 122 in December 2020, entering a brief uptrend that hit an all-time high at 203.02 in March 2021. The subsequent decline sliced through the 2019 high in January 2022, signaling a failed breakout that’s dropped the stock to levels first struck in April 2015. Disney pays no dividend so that horrific performance translates into a zero seven-year return, making it one of the Dow’s worst performers.  Accumulation has dropped to a 10-year low at the same time, further darkening the long-term outlook.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Netflix Is Down By 39%, Here Is Why

Key Insights

  • Netflix stock dives after the company reports that net subscribers decreased by 200,000 in Q1 2022. 
  • The company’s subscriber forecast for Q2 2022 shocks the market. 
  • Netflix’ growth story is busted, and the company needs to come up with positive catalysts to break the current downside trend. 

Netflix Stock Collapses As The Company Predicts A Loss Of 2 Million Subscribers In Q2 2022

Shares of Netflix found themselves under strong pressure after the company released its first-quarter report. Netflix reported revenue of $7.87 billion and earnings of $3.53 per share, beating analyst estimates on earnings and missing them on revenue.

The market focused on the company’s subscriber data as Netflix said that it lost 200,000 subscribers in Q1 2022. More, the company believes that net subscribers will decrease by as much as 2 million in the second quarter of 2022.

The market is clearly shocked by this news, and Netflix stock is down by 39% during the current trading session. Other stocks in this market segment, like Disney  and Paramount, are also moving lower.

What’s Next For Netflix Stock?

Netflix has been a classic growth stock for years, so investors were focused on the company’s subscriber numbers and potential revenue opportunities rather than the company’s valuation.

Currently, analysts expect that Netflix will report earnings of $10.96 per share in 2022 and earnings of $14.17 per share in 2023, so the stock is trading at 15 forward P/E.

Such valuation levels look cheap for one of the leading tech stocks, but earnings estimates have been moving lower in recent months and they will decline after the earnings report.

Recent market action shows that tech stocks get severely punished if the market has doubts about their ability to grow. Examples include Roku (from $490 to $98), Zoom (from $588 to $95), Peloton  (from $171 to $20).

In this light, it remains to be seen whether speculative traders will rush to buy Netflix shares after the huge pullback which took the stock from the $700 level to the $215 level.

Netflix promised to monetize shared passwords and explore a move into advertising, but the company will have to come up with tangible evidence of the success of such initiatives before the market is ready to view it as a growth stock again.

For a look at all of today’s economic events, check out our economic calendar.

Walt Disney at Monthly Support

Dow component Walt Disney Co. (DIS) has rallied over 9% on low volume since February, lifting into 50-day moving average resistance. The entertainment giant has struggled with this barrier since March 2021, highlighting a bear market impulse that’s now undercut the price level traded when the company rolled out Disney+ in November 2019. The stock is down more than 8% so far in 2022 and is still showing no signs of attracting new shareholders.

Where’s the Blockbuster?

COVID-19 lockdowns and restrictions shut down production studios, theme parks, cruise ships, and sporting events. Things are back to normal but Disney hasn’t produced a single blockbuster since Avengers: Endgame in 2019. Accusations of political woke-ness and lore destruction have plagued marketing efforts, encouraging a legion of former fans to pass on new offerings. The $1.9 billion earned by 20 Century Fox’s Spiderman: Homecoming has been a slap in the face in this regard, given the sub-par performance of Disney’s newest Marvel movies.

Disney+ added 11.8 million streaming subscriptions in the fourth quarter, higher than expectations, but the service isn’t expected to make money for another two years. In addition, accounting tricks padded the quarterly metrics, with bean counters adding two million Hulu Live subscribers to the domestic total.  Disney has also announced a new ad-supported subscription tier, raising fears the slimmed-down service will bastardize paying customers.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 20 ‘Buy’, 2 ‘Overweight’, and 8 ‘Hold’ recommendations. Price targets currently range from a low of $132 to a Street-high $229 while the stock is set to open Thursday’s session about $50 below the median $191 target. This dismal placement highlights a major disconnect with Main Street investors, who have been sitting on their hands for more than a year now.

Walt Disney mounted the 2019 peak at 153.41 in November 2020, entering a strong uptrend that hit an all-time high at 203.02 in March 2021. The subsequent decline completed a double top breakdown in November, also violating the 50-day and 200-day moving averages. January and February 2022 rally attempts failed to remount those resistance levels, consistent with a bear market impulse that’s now settled at the 50-month moving average near 138. Stochastics has now entered a monthly buy cycle but, so far at least, there’s been no sign of accumulation.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Healthcare Giant CVS Files for NFT and the Metaverse-Related Trademarks

Key Insights:

  • CVS files NFT and Metaverse-related trademark applications.
  • Drugstores could follow in the footsteps of Walmart and deliver virtual shopping.
  • The healthcare sector could also benefit from blockchain, NFTs, and the Metaverse.

Interest in NFTs and the Metaverse has surged in recent months. A range of industries has taken to NFTs and the Metaverse. These include art, fashion, film, music, and sport.

In some countries, one sector that has been slow on the uptake is the healthcare sector. In the early days of Bitcoin (BTC), blockchain and crypto, the crypto sector identified blockchain attributes that would benefit the healthcare sector.

The COVID-19 pandemic and administrative burdens likely delayed the sector’s exploration of the digital world. This week, U.S healthcare giant CVS Health may be looking to break the mold.

CVS Health Applies for NFT and Metaverse-Related Trademarks

This week, CVS reportedly submitted a trademark application to sell “downloadable virtual goods” in the Metaverse.

According to the report, U.S. drugstore chain CVS aims to sell prescription drugs and other drugstore products in a virtual drugstore. CVS would then authenticate the products and sales with the use of NFTs.

The move by CVS comes after Walmart filed trademark applications in a move towards virtual stores in the Metaverse.

Virtual Drugstores and Healthcare Decentralization the Future Healthcare

As the U.S looks to return to some semblance of normality in the wake of the COVID-19 pandemic, the healthcare sector will likely need to take a close look at the benefits of blockchain, cryptos, NFTs, and the Metaverse.

In 2020, we explored how blockchain would change lives, the global economy, and the world. At the time, immediate healthcare sector benefits included the removal of the paper trail, making patients’ medical records available on a decentralized ledger, which would provide data points to support the fight against virus and disease.

As the healthcare sector looks at lessons learned from the COVID-19 pandemic, dissemination of information and access to critical data points could have arm healthcare workers with the necessary facts to combat viruses.

In October 2021, Forbes published an article exploring how blockchain could revolutionize healthcare. The report looks at reduced costs and new ways for patients to access healthcare. Forbes discusses one healthcare company called “Patientory.” Patientory sees blockchain networks capable of delivering a combination of transparency and privacy. Blockchain technology could give the healthcare sector access to medical data while withholding sensitive patient information. “Up-to-date patient histories and data, pandemic tracking and reporting, secure communication with verified healthcare personnel” form part of Patientory’s solutions.

For the healthcare sector, general practitioners and medical specialists could ease the strain by going Metaverse. While physical examinations need to be in person, some elements of the work could go virtual, which would reduce hospital traffic.

CVS Follows in the Footsteps of Other Mainstream U.S Corporations

In recent months, other major U.S corporations submitting NFT and Metaverse-related trademark applications include:

When considering the demise of department stores and the sharp increase in online retailing, the Metaverse could be the next best thing for online shoppers. Virtual stores could use NFTs to authenticate online sales.

One risk for the healthcare sector is the marked increase in illicit activity. Appropriate controls would need to be in place to protect personal data and personal privacy.

Indie Movie Targets NFTs for Fund Raising

Key Insights:

  • Indie film director Miguel Faus turns to the NFT market to fund his debut film.
  • Independent filmmakers see NFTs and DAOs as a new avenue to fund films.
  • BlockbusterDAO, Quentin Tarantino, and platform FF3 have led the way.

NFT activity has been rampant since the start of the year. The surge has been industry agnostic, with music, film, fashion, and art taking a greater interest in digital assets and the Metaverse.

It hasn’t just been NFTs and the Metaverse that have seen activity spike. This year, DAOs have become another source of fund-raising.

Indie Movie Makers Find Ideal a Partner in NFTs

Historically, major film studios have called the shots in the movie industry. However, independent filmmaking has been on the rise in recent years, supported by streaming platforms such as Netflix Inc., Hulu, Disney+, and Prime Video. Streaming platforms have given independent film audiences access.

The latest Indie film to go NFT is reportedly ‘Calladita.’ Director Miguel Faus has turned to crypto to fund his debut feature film.

Crowdfunding for ‘Calladita’ commences on 2nd March. NFTs and other rewards are on offer to those who contribute. In addition, financiers of the movie are to receive NFTs that will include stills and videos.

One film character is an art gallery owner who has an NFT collection. Backers of the movie can have their NFTs displayed as part of the NFT collection shown in the film.

Web3 and the End of Film as We Know It

Since the start of the year, several events suggest a seismic shift in the film industry.

Quentin Tarantino went ahead with an auction of 7 NFTs that included never-seen-before footage from Pulp Fiction. Tarantino went ahead with the auction despite a Miramax lawsuit. The first of the seven “TarantinoNFT” sets, based on the Ethereum (ETH) blockchain, fetched $1.1m in January before Tarantino hit pause due to market volatility.

While Tarantino was not raising money for an indie film, news of a BlockbusterDAO drew plenty of interest in late December. The DAO is looking to revolutionize the film industry by turning Blockbuster Video into the “first-ever DeFilm (Decentralized) streaming platform and a mainstay of both Web3 brands and products”.

One other platform also looking to revolutionize the film industry is FF3. FF3 aims to give filmmakers a platform to finance movies with NFTs.

Aligned with Miguel Faus’s vision, investors would have ownership of collectible NFTs that owners could sell in the NFT marketplace. On FF3, investors would also have a share of film revenues.

For indie moves, cryptos, NFTs, and new platforms could deliver a new era for the broader film industry.

The highest-grossing independent film of all time was reported to be Mel Gibson’s 2004 “The Passion of the Christ,” which had worldwide ticket sales of $622.3m, at the time of release and a production budget of just $25m, fully funded by Mel Gibson himself.

ViacomCBS Sells Off After Mixed Quarter

ViacomCBS Inc. (VIAC) is trading lower by more than 11% in Tuesday’s pre-market after posting a Q4 2021 profit of $0.26 per-share, missing estimates by $0.19. Revenue beat expectations by more than $500 million, rising 16.4% year-over-year to $8.0 billion. Paramount+ and Showtime streaming services added 9.4 million subscribers, reaching a global total of 56 million. New subs beat 6.4 million estimates by a wide margin. The free Pluto service posted strong growth as well, adding 10 million new users.

Investments Overpower Revenue Growth

The cost to obtain subscribers rose, similar to headwinds faced by rivals Netflix Inc. (NFLX) and Walt Disney Co. (DIS), who are also chasing a dwindling pool of potential customers. The company failed to disclose bottom line results for its streaming business, leading analysts to conclude the divisions are still losing money. That isn’t good news because VIAC profits remain dependent on stagnating legacy media that includes Nickelodeon, MTV, and Comedy Central.

KeyBanc Capital Markets analyst Brandon Nispel upgraded the stock to ‘Sector Weight’ ahead of the report, simultaneously sounding the alarm about tough market conditions. As he notes “VIAC fundamentals going forward are poor and expectations are high for EBITDA/FCF, both of which are likely to decline in 2022 given ramping streaming investment. However, we worry that accelerating subscriber growth and breakdown of profitability between legacy Media and DTC could lead to improving sentiment and overenthusiasm could ensue à la 2021.”

Wall Street and Technical Outlook

Wall Street consensus stands at a modest ‘Hold’ rating, based upon 10 ‘Buy’, 1 ‘Overweight’, 13 ‘Hold’, 0 ‘Underweight’, and 3 ‘Sell’ recommendations. Price targets currently range from a low of $32 to a Street-high $67 while the stock is set to open Tuesday’s session on top of the low target. This dismal placement highlights investor dissatisfaction with ViacomCBS’s progress-to-date, fueled by the 69% decline since the stock topped out at 102 in March 2021.

ViacomCBS was created in December 2019 by the merger of Viacom and CBS, keeping the old CBS chart going forward. It rose more than 60 points into March 2021, and turned tail, crashing 60% in just four sessions. Aggressive sellers returned in October after six months of sideways action, breaking support in the upper 30s. A test at the 200-day moving average has failed twice, giving way to a selling spiral that could now break the 2021 lows in the upper 20s.

Catch up on the latest price action with our new ETF performance breakdown.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Coinbase Welcomes Former SEC Official Scott Bauguess

Regulation is very important when it comes to new investment assets, such as cryptocurrencies because it gives investors regulatory clarity. 

The U.S. Securities and Exchange Commission (SEC) ex-employee announced on his Twitter account that yesterday was his first day at Coinbase. He is now the new VP for Global Regulatory Policy in the cryptocurrency exchange, as you see below:

In his new position, he will work with the authorities in order to have a better regulatory environment for new investors that want to enter the crypto world.

Coinbase keeps investing in its global adoption, last Sunday, Coinbase paid $14 million on a commercial ad during the Super Bowl game. 

The ad was a QR bouncing for 1 minute that gets you to a Coinbase’s webpage. The commercial got so much attention that the ad got 20 million visits in just 1 minute and crashed the website, but moments later Coinbase announced that they were back online.

About Scott Bauguess

Scott Bauguess graduated in 1992 as an Electrical Engineer from the University of Illinois Urbana-Champaign. 

His previous experience before Coinbase was working 12 years in the SEC.

He was the Deputy Director of the Division of Economic and Risk Analysis for 6 years. Before that, he worked as an Assistant Director and as a Senior Financial Economist in the SEC.

In his earlier days, he worked six years as an electrical engineer at Motorola Solutions. Then he was a Doctoral Candidate at Arizona State University for five years. 

Besides his new position at Coinbase, he is a faculty member at the University of Texas’s McCombs Business School.

It’s Not the First Time That a Former SEC Employee Joins Coinbase

Last month, Thaya Knight, the former counsel to Commissioner Elad Roisman at the SEC, joined Coinbase to work as its senior public policy manager. Knight was also the counsel of the SEC Commissioner Hester Peirce between 2018 and 2019.

Earlier this month, Brian Rocha, a former Netflix, Warner Bros, and The Walt Disney Company employee joined Coinbase as the new Head of Content Strategy. 

In September 2021, Shalin Pei, a former Facebook employee, joined Coinbase as its Senior Product Design Manager.

Considering the huge attention of Coinbase’s Super Bowl commercial, there is no doubt Coinbase will keep growing.

Why Disney Stock Is Up By 5% Today

Disney Stock Rallies As Parks Rebound

Shares of Disney gained solid upside momentum after the company released its quarterly report. Disney reported revenue of $21.82 billion and adjusted earnings of $1.06 per share, beating analyst estimates on both earnings and revenue.

The company managed to exceed analyst estimates thanks to the strong performance of Disney’s Parks, Experiences and Products division. According to Disney, domestic parks are “generally operating without significant mandatory COVID-19-related restrictions”, while the international segment is still facing restrictions in some locations.

Disney+ subscriber growth also exceeded analyst expectations. The company managed to add 11.8 million subscribers to reach a total of 129.8 million.

What’s Next For Disney Stock?

Disney exceeded analyst expectations in the two key segments, which provided material support for its stock. The robust rebound of the domestic parks segment indicates that a similar rebound should be expected in the international segment when the pandemic-related restrictions are lifted.

Meanwhile, the continuation of growth for Disney+ serves as an additional bullish catalyst. The recent Netflix results raised worries about the future performance of all streaming services, but Disney+ managed to grow at a healthy pace.

Currently, analysts expect that Disney will report earnings of $3.77 per share in fiscal 2022 and $4.93 per share in fiscal 2023, so the stock is trading at 31 forward P/E for 2023. This is not cheap, but the market looks ready to focus on future profits. In addition, analyst estimates will likely move higher in the upcoming weeks, providing additional support to Disney stock.

It remains to be seen whether the recent inflation data will put any material pressure on Disney stock as the company should have the ability to increase prices if necessary due to the strong demand for its products.

At this point, it looks that the stock would have an opportunity to gain additional upside momentum in the upcoming trading sessions in case S&P 500 does not suffer from a major pullback after inflation reports.

For a look at all of today’s economic events, check out our economic calendar.