S&P 500 (SPY) Retreats As Recession Fears Grow

Key Insights

  • S&P 500 is under strong pressure ahead of the weekend as traders sell riskier assets. 
  • The pullback is broad, and there are no safe-havens in the stock market. 
  • Energy stocks retreat as WTI oil tests multi-month lows. 

The Sell-Off Continues

S&P 500 is under strong pressure amid global market sell-off. Today, traders are selling everything and buying U.S. dollar, which is testing multi-decade highs.

Not surprisingly, all market segments are under strong pressure today. Energy stocks suffered a strong sell-off as WTI oil moved below the $80 level on recession worries. APA Corporation, Marathon Oil, Halliburton, and Schlumberger are down by more than 10% in today’s trading session.

Basic materials stocks have also been hit hard. The leading copper producer Freeport-McMoRan is down by 7% today. Fertilizer producers CF Industries and Mosaic are losing 6% in today’s trading session. Gold stocks, like Newmont Corporation, are also under pressure as gold tests new lows.

Among leading tech stocks, Meta, NVIDIA, Microsoft, and Alphabet are testing yearly lows. Treasury yields keep moving higher, which is bearish for tech stocks.

From a big picture point of view, the current sell-off is close to a real panic. Traders are moving out of various asset classes and transfer their funds into the U.S. dollar.

It should be noted that S&P 500 has lost more than 10% of its value in less than two weeks, so speculative traders will likely try to search for bargains. Even if the market is headed lower, sell-offs rarely go in a straight line, so traders should expect that the market will stay extremely volatile.

S&P 500 Tests Support At 3660

S&P 500

S&P 500 settled below the 3700 level and tested support at 3660. In case S&P 500 manages to settle below 3660, it will head towards the next support level, which is located at 3635. A move below this level will open the way to the test of the support at 3600.

On the upside, the previous support at 3700 will serve as the first resistance level for S&P 500. RSI is in the oversold territory, so the chances for a rebound are increasing. In case S&P 500 manages to climb back above 3700, it will head towards the resistance at 3725. A successful test of this level will push S&P 500 towards the resistance at 3750.

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

S&P 500 (SPY) Declines Towards 3900 As Treasury Yields Rise

Key Insights

  • Higher Treasury yields put material pressure on stocks today. 
  • Energy stocks declined amid a strong sell-off in the oil and natural gas markets. 
  • A move below 3900 will push S&P 500 towards the support at 3885.

S&P 500 Is Moving Towards September Lows

S&P 500 is losing ground today as Treasury yields continue to move higher ahead of the Fed Interest Rate Decision, which will be released on September 21.

Energy stocks have found themselves under pressure amid sell-offs in the natural gas and oil markets. As a result, leading energy stocks like Exxon Mobil and Chevron are down by about 2% in today’s trading.

Leading tech stocks, including Apple, Microsoft, Alphabet, and Amazon, are also down by 1-2% today. NVIDIA is testing new lows. Higher interest rates are bearish for tech stocks.

From a big picture point of view, traders remain worried that Fed will hurt economic growth by raising rates aggressively. The FedWatch Tool indicates that there is a 60.2% probability that Fed’s target rate will reach 375-400 bps in November, up from the current 225 – 250 bps.

Aggressive rate hikes may put significant pressure on economic activity and hurt companies’ profits, so it’s not surprising to see that traders are worried about this scenario.

S&P 500 Is Ready To Test The Support Level At 3900

S&P 500

S&P 500 managed to get below the support level at 3920 and is trying to get to the test of the next support, which is located at 3900. If S&P 500 manages to settle below this level, it will head towards the support at the recent lows at 3885. A successful test of the support at 3885 will push S&P 500 towards the support at 3850.

On the upside, the previous support level at 3920 will serve as the first resistance level for S&P 500. In case S&P 500 manages to settle above this level, it will head towards the resistance at 3950. A move above the resistance at 3950 will open the way to the test of the next resistance level at 3980.

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

Should You Invest In AI Stocks?

What Is AI?

Artificial Intelligence, or AI, is basically machine learning, or a process by which computers simulate our human intelligence through a collection of complex systems. There are many different applications of AI, including speech recognition, vision, language processing, and expert systems.

AI makes it possible for computers or machines to receive data through various means of technology – like movement or heat sensors for example – to interpret and arrange what they perceive into a somewhat logical order, solve a problem, and then act in a way that achieves the desired outcome.

On some level, the hardware that possesses AI is capable of adapting what they do to suit its environment or even ‘learn’ from previous behavior with the use of analysis and the ongoing collection of data.

The technology has been around in various primitive forms for decades, but it’s become far more complex in recent years and its use is becoming more widespread in countless industries. There are benefits to consider, such as enhanced productivity, technological advances, medical advances, and cheaper goods and services, but also concerns to take into consideration too, such as potential issues with privacy, safety, and security for example.

The public can be naturally dubious and uncertain about some applications of AI – after all, we don’t really know where the technology is headed long term.

So, is AI the way of the future for your investment strategy? How can you take advantage of this growing space and invest wisely with a secure broker like ActivTrades? Let’s take a bit of a look into the world of AI and you can decide what options might be suitable for you.

How Do Companies Use AI In Their Businesses?

There are so many industries that are being enormously affected by investment and growth in AI technology at the moment. Some include Health Care, Automotive, Travel, Marketing, E-commerce, Social Media, Law Enforcement, and Finance, but there are many others.

One of the lesser known, but fairly important users of AI, is the Agricultural industry, with the most notable example in this space being John Deere. Their technology aims to take the guesswork out of farming and to use AI to target and fix trouble areas, like weeds or dry spots, among other things. They’re using specific sensors, drones, targeted spraying, and driverless tractors to be able to increase productivity and output by significant margins.

Another prominent company that is hugely reliant on AI is retail giant JD.com, located in China. An e-commerce site that sells almost every product imaginable expects its business to be completely automated in the future. And the company already has warehouses that are completely free of employee involvement, and deliveries of products to consumers have been conducted by a network of drones for a few years already.

How To Recognize Artificial Intelligence Stocks

You may already have investments in your portfolio that expose you to AI without being aware of it as it’s become so widespread, but if you’re actively on the hunt to focus on the technology there are a few options available. You’ll just need to do a little research because there aren’t too many companies with AI at the center of their business.

The top stocks to look at are from companies that are making ongoing investments in things like infrastructure for networking, data centers, cloud-based operations, and robotics, among other things. Think big tech companies like Amazon, IBM, Alphabet, Microsoft, Nvidia, and Meta, but also lesser-known companies like Intuitive Surgical, who specialize in creating technology for minimally invasive surgical procedures with the use of robotics and AI.

How To Trade Artificial Intelligence Stocks

You might like to purchase individual shares directly for your preferred company or look into financial derivatives such as Contracts for Difference (CFD) which allow you to invest in the price movements of a company, but not actually own the underlying stock. This method also allows the trader to take advantage of leverage and potentially make magnified returns on the emerging technology of his choosing.

Some Exchange-Traded Funds also offer products specific to AI. This is called Thematic Investing, which focuses on a specific theme such as AI, communications, or clean energy, for example. Different companies from different sectors may be involved, but they are all a part of the same objective or part of a popular trend.

Generally, the products to look for are those that contain a basket of the top publicly traded AI and robotics stocks that are selected by the fund based on their preferences. ARK Autonomous Technology & Robotics ETF is one such example and includes (as of September 2022) Tesla, Deere & Co, and Trimble Inc, among a few others.

Whatever your investment strategy, whether using derivatives, ETF, or buying individual stocks, it’s vitally important to have a trading plan in place and remember that AI is an emerging sector, one with risk involved. You’ll need to do your research and have a well-established risk management and trading plan that you’re prepared to stick to – and never invest more capital than you’re comfortable losing.

S&P 500 (SPY) Set For A Sell-Off After Shocking Inflation Data

Key Insights

  • U.S. inflation data shocked markets. 
  • S&P 500 futures are under significant pressure in premarket trading. 
  • A move below 4015 will push S&P 500 towards the 4000 level. 

Inflation Data Puts Heavy Pressure On Stocks

S&P 500 futures are down by 2.4% in premarket trading after the release of U.S. inflation reports.

The reports indicated that Inflation Rate increased by 8.3% year-over-year in August, compared to analyst consensus of 8.1%. Core Inflation Rate grew by 0.6% month-over-month, while analysts expected that it would increase by just 0.3%.

Markets were shocked by inflation data as many traders believed that lower oil prices would put more pressure on inflation. Expectations for the upcoming Fed meeting changed dramatically. The FedWatch Tool indicates that there is a 90% probability of a 75 bps rate hike at the next meeting, and there is a 10% probability of a shocking 100 bps rate hike.

Not surprisingly, the U.S. dollar rallied after the release of inflation reports. Treasury yields moved to new highs. Currently, the yield of 2-year Treasuries is trying to settle above the 3.70% level.

Higher inflation and rising Treasury yields will put material pressure on tech stocks in today’s trading. Leading tech stocks like Apple, Microsoft, Alphabet, and Amazon are down by 2-3% in premarket trading.

The sell-off may be broad today as S&P 500 enjoyed a strong rally in recent trading sessions, and it remains to be seen whether any market segment will get support from traders.

S&P 500 Futures Moved Below The 50 EMA

S&P 500

S&P 500 futures managed to get below the 50 EMA at 4050 and are moving towards the support at 4015. In case S&P 500 manages to settle below this level, it will head towards the next support, which is located at 4000. A move below this level will push S&P 500 towards the support at 3980.

On the upside, S&P 500 needs to get back above the 50 EMA to have a chance to gain upside momentum in the near term. The next resistance level for S&P 500 is located at 4080. If S&P 500 settles back above this level, it will head towards the resistance at 4100.

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

S&P 500 (SPY) Tries To Gain More Ground Despite Powell’s Comments

Key Insights

  • Hawkish commentary from Fed Chair Powell put some pressure on leading tech stocks. 
  • Healthcare and financial stocks enjoy strong support today. 
  • S&P 500 needs to settle above 4015 to continue its rebound.

S&P 500 Tries To Continue Its Rebound

S&P 500 is swinging between gains and losses today as leading tech stocks have once again found themselves under pressure. Apple, Alphabet, Amazon are down by about 1%.

Today, traders focused on the hawkish comments from Fed Chair Jerome Powell, who highlighted the importance of Fed’s fight against inflation. Treasury yields moved higher, which was bearish for growth stocks and put some pressure on S&P 500.

At the same time, it should be noted that demand for stocks is visible in the healthcare and financial segments. For example, big banks like JP Morgan, Citigroup, Morgan Stanley are up by about 2% today.

S&P 500

S&P 500 failed to settle above the 4000 level and pulled back. Currently, S&P 500 has settled between the support at 3950 and the resistance at 3980. In case S&P 500 declines below the 3950 level, it will gain additional downside momentum and move towards the next support level at 3915.

On the upside, S&P 500 must settle above 4015 to have a chance to gain sustainable upside momentum. A move above 4015 will open the way to the test of the next resistance level at the 20 EMA at 4035.

Snap Rallies As Memo Highlights Growth Ambitions

Snap is up by more than 7% today as traders react to the internal memo that was sent by the company’s CEO Evan Spiegel. According to the memo, the company plans to grow the user base to 450 million by the end of the next year.

Gamestop has also enjoyed some support today and made an attempt to settle above the $26 level after the company revealed its new partership with the crypto exchange FTX. Gamestop stock has been under serious pressure in recent weeks, and it remains to be seen whether the new crypto partnership will boost interest in the meme stock.

From a big picture point of view, the market needs additional catalysts to continue its rebound. Most likely, trading will remain highly volatile ahead of the Fed decision, which will be released on September 21. While traders look ready to buy stocks after the major pullback, the hawkish Fed may limit their appetite for risk.

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

S&P 500 (SPY) Declines As Treasury Yields Test New Highs

Key Insights

  • S&P 500 remains under pressure as tech stocks continue to move lower. 
  • There is some demand in defensive segments, but this demand is not sufficient to push S&P 500 higher. 
  • Traders should also monitor the developments in European government bond markets, which may have a material impact on the world economy. 

Rising Yields Put Pressure On Stocks

S&P 500 is losing ground today as tech stocks remain under strong pressure amid rising Treasury yields.

The yield of 10-year Treasuries moved towards multi-month highs at 3.35%, while the yield of 2-year Treasuries tested the 3.50% level. The inverted yield curve indicates that bond traders are worried about a potential recession.

It should be noted that there are strong moves in European government bond markets. UK bonds are testing new lows as traders fear that energy crisis will lead to additional money-printing. Germany’s bonds have also found themselves under significant pressure, and it looks that the ECB may be selling them to support bonds of weaker members like Italy or Greece.

While European bond yields have no direct impact on U.S. markets, a potential debt crisis in the EU and UK may serve as a significant negative catalyst for S&P 500. In this light, traders should monitor the developments in these bond markets in the upcoming weeks.

S&P 500

From a technical point of view, S&P 500 continues its attempts to settle below the 3915 level. A successful test of this level will signal that S&P 500 is ready to gain additional downside momentum.

Tech Stocks Stay Weak

Tech stocks continue to push the general market to lower levels. Apple, Microsoft, Alphabet, Amazon and other leading tech stocks remain under pressure.

Energy stocks like Exxon and Chevron have also pulled back today as WTI oil moved closer to multi-month lows.

Demand for stocks is concentrated in the safe-haven segment. Stocks like Eli Lilly, UnitedHealth Group, Johnson & Johnson enjoy some support today.

From a big picture point of view, it is obvious that S&P 500 will not be able to gain upside momentum without a material rebound in the tech stock segment.

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

S&P 500 (SPY) Moves Towards 3900 As Chip Stocks Retreat

Key Insights

  • The strong Manufacturing PMI report raised chances for an aggressive rate hike at the next Fed meeting. 
  • NVIDIA and AMD retreated as U.S. banned exports of some advanced chips to China. 
  • Traders have started buying stocks from defensive sectors. 

U.S. Export Ban On Advanced Chips Pushed Stocks To New Lows

S&P 500 declined towards the 3900 level amid worries about aggressive rate hikes from the Fed and an export ban on advanced chips to China.

The strong ISM Manufacturing PMI report pushed the U.S. dollar to new highs. Treasury yields have also moved higher. The FedWatch Tool indicates that there is a 76% probability of a 75 bps rate hike at the next meeting, which is bearish for stocks.

S&P 500

Interestingly, RSI remains in the moderate territory despite the strong pullback, so there is enough room to gain additional downside momentum in the upcoming trading sessions.

If S&P 500 manages to settle below the support at 3915, it will head towards the next support level at 3875. A move below this level will push S&P 500 towards the support at 3830.

On the upside, the previous support at 3950 will serve as the first resistance level for S&P 500. If S&P 500 manages to settle back above this level, it will head towards the resistance at 3980.

Traders Show Some Interest In Defensive Sectors

NVIDIA stock is down by about 12% amid worries that U.S. export ban will deal a material blow to the company’s revenue. AMD is down by 7%. The ban targets sophisticated and expensive chips that are used in AI work.

The market is worried that the ban marks the beginning of a multi-year assault on China’s capabilities in the high-tech segment, and that additional restrictions will be announced in the future.

As the relations between U.S. and China continue to deteriorate, Chinese stocks like Alibaba and NIO have also found themselves under material pressure.

Leading tech stocks, like Apple, Microsoft, and Alphabet, are also moving lower today.

Meanwhile, investors are trying to find safe-haven assets after the strong pullback, as stocks like Johson & Johnson, Walmart, and Philip Morris are moving higher.

Traders should keep an eye on the trading dynamics of such stocks as their rebound may signal that buyers’ interest is growing after the sell-off in S&P 500.

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

S&P 500 (SPY) Dives Below The 4000 Level

Key Insights

  • S&P 500 is moving lower as traders focus on potential aggressive moves from the Fed. 
  • The strong pullback in commodity markets has led to a sell-off in energy and basic materials stocks. 
  • The current pullback is broad, and there are no market segments that can move against the selling wave. 

S&P 500 Remains Under Strong Pressure

S&P 500 gained additional downside momentum and moved below the 4000 level after CB Consumer Confidence report beat analyst expectations.

Good news is bad news for markets right now as healthy consumer activity increases chances for an aggressive rate hike at the next Fed meeting.

There is another catalyst that must be watched closely. In September, the Fed will ramp up its quantitative tightening program. Each month, the Fed will reduce the size of its balance sheet by $60 billion of Treasuries and $35 billion of mortgage-backed securities. Instead of selling them, the Fed will let them mature.

The reduction of Fed’s balance sheet has already begun. However, the pace of this reduction was modest. Starting from September, markets will face tighter liquidity, which may serve as an additional bearish catalyst for stocks.

S&P 500

S&P 500 has recently managed to get below the 4000 level and is trying to develop additional downside momentum. Interestingly, RSI remains in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge. Traders should expect significant volatility as S&P 500 moved from 4200 to 4000 in just three trading sessions.

Energy Stocks Lead The Sell-Off

Energy stocks have suffered a strong sell-off today as WTI oil is down by about 6%. Exxon Mobil, Chevron, Schlumberger and other leading energy stocks are down by 3-4% today.

Basic materials stocks are also under strong pressure amid a broad sell-off in commodity markets. For example, the leading copper producer Freeport-McMoRan is down by about 6% today.

Tech stocks are also moving lower. All leading tech names, like Apple, Microsoft, and Alphabet are losing ground today. There is nowhere to hide, as all market segments are under pressure.

However, there are some bright spots in the market. The discount retailer Big Lots is up by more than 7% after a better-than-expected earnings report. It should be noted that Big Lots stock has been under pressure for months, so the reaction to the report is a typical relief rally as the company’s performance was not as bad as expected.

Avid Technology is up by roughly 12% as the stock joined the S&P 500 SmallCap 600 index. The inclusion in an index is always a positive catalyst as it forces index funds to buy the stock.

From a big picture point of view, traders are worried that aggressive Fed will hurt economic growth. If these worries persist, stocks will remain under pressure.

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

S&P 500 (SPY) Is Moving Towards 4100 As Sell-Off Intensifies

Key Insights

  • Powell’s remarks triggered fears of an economic slowdown, leading to a sell-off in equity markets. 
  • Nasdaq is down by almost 3% amid strong sell-off in tech stocks. 
  • A move below the 4100 level will push S&P 500 towards the 50 EMA at 4085.

Powell’s Comments Put Pressure On S&P 500

S&P 500 is down by more than 2% as traders react to Powell’s speech, which pushed traders out of riskier assets.

Powell’s speech was focused on inflation. He noted that the Fed should solve the problem before public’s inflation expectations become entrenched at higher levels. Powell spoke about economic pain due to tight monetary policy but noted that high inflation was more dangerous.

Markets were volatile when Powell spoke. Later, traders focused on the “economic pain” part of his message, and S&P 500 found itself under huge pressure.

S&P 500

S&P 500 faced resistance near 4220 and declined below the 20 EMA. Currently, S&P 500 is testing the support level at 4115. In case this test is successful, S&P 500 will move towards the next support at the 50 EMA at 4085. A move below the 50 EMA will open the way to the test of the support at 4040. On the upside, S&P 500 needs to get back above the 20 EMA to have a chance to develop sustainable upside momentum.

Tech Stocks Retreat, Led By Alphabet And NVIDIA

Today’s sell-off is broad, and all market segments are under pressure. Not surprisingly, tech stocks are leading the sell-off. Alphabet is down by almost 5%, while NVIDIA stock is losing more than 6% of its value.

Notable losers in the tech segment include Affirm, which is down by 20% after the release of a disappointing quarterly report, and Dell, which cut its fiscal 2023 guidance.

Electronic Arts is up by about 5% after a report suggested that Amazon would not make an offer for the company.

Most likely, traders will focus on general market sentiment today. Powell’s speech has led to a strong reaction in markets. Traders are moving out of riskier assets, so tech stocks will remain under strong pressure today.

At this point, it looks that it will be hard to find safe-havens ahead of the weekend. Energy stocks, which have performed well in recent trading sessions, are also moving lower as WTI oil declines on demand worries.

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

Nasdaq 100 Rallies Over 4.0% on Dovish Fed/Strong Earnings, Alphabet Up 8.4%

Key Points

  • The Nasdaq 100 rose over 4.0% and the S&P 500 rose 3.0% in wake of a dovish Fed policy announcement.
  • The central bank raised interest rates by 75 bps as expected but noted recent economic weakness.
  • Wall Street also got a boost from strong Microsoft and Alphabet earnings, with big tech/growth stocks leading the upside.

Dovish Fed Sends Wall Street Surging

Wall Street surged higher on Wednesday after the US Federal Reserve raised interest rates by 75 bps as expected, defying a minority of market participants who had been expecting a 100 bps move. Meanwhile, in his post-FOMC meeting press conference, Fed Chair Jerome Powell noted the recent softening of US economic activity and, while he reiterated that uncertainty remains very high and the Fed is taking things meeting by meeting, noted some recent positive trends regarding inflation, such as the recent pullback in commodity prices and inflation expectations.

Markets interpreted the policy decision and Powell’s remarks as dovish (or, at least, not as hawkish as feared) and US yields slumped, with the Fed interest rate expectation sensitive 2-year yield dropping 7 bps to below 3.0%. While Powell reiterated the Fed’s intention to get interest rates to 3.0-3.5% by the year’s end, his remarks did not push back against the idea that the Fed might be cutting interest rates before long in 2023.

“The Fed’s work is not yet done and we look for a further 125bp of hikes before the end of the year,” said analysts at ING in a note. “But with recession risks mounting and inflation set to fall sharply in 2023, rate cuts will be the key theme for next year,” they added.

Nasdaq 100 Rises Over 4.0%, Eyes Early June Highs

The big tech/growth stock-heavy Nasdaq 100 index rallied over 4.0% on Wednesday, its best one-day performance since the pandemic-induced volatility of early 2020. Index heavyweights Microsoft, Alphabet (Google’s parent company), Tesla, Apple, Amazon, and Meta Platforms (Facebook’s parent company) all gained between 3.0% to 8.0%.

The big tech names got an added boost from Microsoft and Alphabet earnings that were both significantly stronger than expected, with the former forecasting double-digit growth for the 2022/2023 fiscal year on strong demand for its cloud computing services and the latter posting stronger than forecast Google search ad sales.

After downbeat earnings reports from Twitter and Snap last week, there had been some concerns about weakness in the ad market. Meta Platforms will be reporting earnings after the market close and Apple and Amazon will both be reporting on Thursday.

The Nasdaq 100 index just missed out on hitting fresh highs for the month in the mid-12,600s, with the bulls again eyeing a test of early June highs above 12,800. The index’s strong rebound following Tuesday’s retest of its 50-Day Moving Average just above 12,000 is likely to be interpreted as a bullish sign by technicians.

The S&P 500 was last up around 3.0%, having broken convincingly above the 4,000 mark and to fresh one-month highs in the 4,030s. The Dow Jones was last up about just shy of 2.0%. In terms of other notable movers, PayPal’s share price jumped on news that activist investor Elliot Investment Management is building a stake in the firm, while T-Mobile’s share price was up after posting better-than-expected top and bottom line Q2 earnings and upgrading its subscriber growth forecast for the second time this year.

Tech Giants Hover Above the Storm

The news on Tuesday, July 26th coming from both the Microsoft (MSFT) and Alphabet (GOOG) camps with their recently published earnings reports is a sigh of relief for investors and is so far having a calming effect on Wall Street, with both companies only missing their earnings estimates by a small margin. They’re showing that they may just weather the troubling conditions currently plaguing the market as a whole.

Although globally it seems the landscape is changing with what drives business in recent times, as evidenced by the tech-heavy NASDAQ losing around 26% of its value this year, a few companies are innovating just enough to stay above their smaller competitors.

It’s all about taking advantage of changing consumer habits

Both companies reported that in addition to other segments of their businesses, their cloud and advertising services were a large part of the reason for their better than expected (or feared) results.

Much of the world has been forced to adjust their behavior over the last few years, with many spending more time online during the pandemic, whether it was working from home or shifting their buying habits, so showing growth in these areas would seem to make logical sense.

The CEO of Alphabet and Google, Sundar Pichai, commented on this in his statement, saying, “The investments we’ve made over the years in AI and computing are helping to make our services particularly valuable for consumers, and highly effective for businesses of all sizes. As we sharpen our focus, we’ll continue to invest responsibly in deep computer science for the long-term.”

Microsoft executive vice president and chief financial officer, Amy Hood, similarly commented, “In a dynamic environment we saw strong demand, took a share, and increased customer commitment to our cloud platform.”

Microsoft revenue totaled $51.9 billion and increased 12% over the same period last year. Their operating income increased by 8% to $20.5 billion. A net income of $16.7 billion saw a 2% increase, and the diluted earnings per share were $2.23, up 3%. The company showed its best ever sales for the cloud service, Azure, which were up 28%.

The company this month was also selected by Netflix to partner in their newest ad-supported, cheaper subscription service, a potentially significant new source of revenue.

Alphabet’s figures show its lowest growth rate since the 2020 April-June quarter, but they are still in an enviable position compared to most other non-tech companies in the current landscape. Its revenue totaled $69.69 billion and increased 13% compared to the same period last year. Their operating income increased to $19.45 billion, up from $19.36 billion. A net income of $16 billion saw a small drop from last year’s $18.52 billion, and the diluted earnings per share were $1.21, down from $1.36.

Google Cloud fell short of target earnings by around $1 million at $6.3 billion, and ads through YouTube came in under budget, with $7.3 billion as opposed to $7.5 billion in estimates.

So far, these two firms have avoided the pitfalls that other large businesses across the world have been experiencing. Supermarket giant Target’s shocking first-quarter earnings are one such example, as is Walmart’s predicted decline in profits for its upcoming report due in August. Many point to the ongoing issues with inflation, household costs increasing, and supply chain issues as having a huge impact on such retailers.

Online rivals in the social media world, Twitter and Snap have also just seen negative fourth-quarter earnings, with some analysts pointing to the fact that ad content can be more expensive through these types of social media as opposed to search engines, as it requires more than just text.

Both companies still communicate caution though

Despite the somewhat positive reports and forecasts, the quarter hasn’t been without its setbacks, and risks remain for both companies. Ever-increasing inflation, wages, fuel prices, raw material costs, and shortages from the China shutdowns are making some businesses that were formerly customers re-evaluate their spending on ads for marketing. The strong dollar has also meant a lower cash return after converting from foreign currency for both businesses.

Alphabet recently cut sales in Russia due to its aggression in Ukraine, and the company missed a huge opportunity to partner with Netflix in its new movement into ads on its service, to the advantage of Microsoft. The company announced back on July 20th that they would be implementing a hiring freeze for a few weeks which seemed to be a worrying sign, but over the whole quarter, there was actually an increase of around ten thousand new employees.

Additionally, antitrust regulators across most markets have also impacted Google’s share of the revenue from app sales.

Microsoft has seen a drop off in sales of its PC’s compared to the previous year, and a slight drop in advertising spending has also had a small impact. The company is also hitting the brakes on hiring. In an effort to achieve “structural adjustment,” Microsoft has cut jobs, yet plans to add more. This time, the layoffs affected less than one percent of its 180,000-person workforce and were distributed across geographies.

How the market responded

Tuesday’s regular trading session ended with a loss of 2.3% for shares of Alphabet. But the company’s shares went up around 5% on the back of the announcement in after-hours trading. Microsoft ended the day with a loss of 2.68%, but its shares were also bolstered by about 5% after the company published its earnings.

Traders seem optimistic about the companies’ ability to take the necessary steps to adapt to the new macroeconomic environment and continue improving their financial situation. ActivTrades’ sentiment feature on the left part of the below chart shows that the sentiment for both companies is highly bullish, with 85% of the ActivTrades community buying Alphabet and 95% buying Microsoft.

Daily charts of Microsoft and Alphabet – Source: ActivTrades’ online platform (ActivTrader)

5 Things to Know in Crypto Today: BTC Stabilizes Above $21K, ETH in mid-$1.4Ks Pre-Fed

Key Points

  • Strong earnings from mega-cap US stocks have helped boost stock market sentiment, supporting crypto prices.
  • Major coins are now consolidating ahead of Wednesday’s Fed policy announcement.
  • Bitcoin was last trading in the low-$21,000s and Ethereum in the mid-$1,400s.

Crypto Stabilizes as Equities Rally on Strong Earnings

Major cryptocurrencies are consolidating on Wednesday, with sentiment is a little more upbeat ahead of a key policy announcement from the US Federal Reserve later in the day. Strong earnings from the likes of US mega-cap giants Microsoft and Alphabet (Google’s parent company) has sent their shares 4-5% higher in pre-market trade and is lifting the major US index futures ahead of the US open. Nasdaq 100 index futures were last up over 1.5% while S&P 500 index futures were last up just over 1.0%.

Bitcoin had dipped as low as the $20,700 area on Tuesday but has since recovered to around $21,300 in tandem with the better mood in stock markets. However, the world’s largest cryptocurrency by market capitalization continues to trade below its 50 and 21-Day Moving Averages at $21,800 and $21,550 respectively and with losses on the week of still more than 5.0%.

Ethereum, meanwhile, has recovered from a slump as low as the $1,350s on Tuesday and is currently trading above $1,460. The world’s second-largest cryptocurrency by market cap is still nursing losses of close to 9.0% on the week. In terms of the other major altcoins, the likes of BNB, XRP, ADA, SOL and DOGE were all between flat and up by around 3% in the last 24 hours, according to CoinMarketCap.

How Crypto Might React to the Fed’s Policy Announcement

The Fed is expected to lift its target interest rate range by 75 bps for a second successive meeting to 2.25-2.50% from its current 1.50-1.75% level. Markets price a slim (roughly 25%) chance that the Fed might go bigger with a 100 bps rate hike, given the upside surprise in headline consumer price inflation figures released earlier this month for June.

But most analysts think that with core consumer price pressures looking now to have peaked, with commodity prices having moved lower and with inflation expectations also seeming to have peaked, the Fed will go with another 75 bps move. Bear in mind that the economy continues to show significant strain; consumer sentiment has been in the dumps for some time and this has been weighing on consumption in recent months, while business survey data (like last Friday’s PMI data) is increasingly showing a slowdown in economic activity.

These negative recent economic developments likely further reduce the chance of a jumbo 100 bps rate hike. This means that there is room for a small initial positive reaction in stock and crypto markets as hawkish 100 bps rate hike bets are immediately priced out (assuming the Fed does go with a 75 bps hike).

Much more important for markets will be Fed Chair Jerome Powell’s tone on the economy and outlook for further rate hikes in the months ahead. The Fed is likely to reiterate its nimble/take things meeting by meeting stance. But any indications that the Fed is becoming a little less worried about the inflation outlook and a little more worried about slowing growth could come across as dovish and boost stocks and crypto.

Coinbase Shares Tank on SEC Investigation News

Coinbase Global’s share price fell more than 20% during Tuesday’s US equity market trading hours after news broke that the US Securities and Exchange Commission (SEC) is investigating the US-based cryptocurrency exchange on suspicion that it may have listed unregistered securities.

The new investigation into Coinbase comes after the SEC claimed last week in a new insider trading lawsuit that seven cryptocurrencies currently listed on Coinbase are actually securities. Analysts think that if the SEC does rule that most cryptocurrencies are indeed securities, this could cripple a good portion of the market.

Kraken Under Investigation for Alleged Sanctions Breaches

According to a New York Times report on Tuesday, the US Treasury Department is investigating cryptocurrency exchange Kraken for potential violations of US sanctions. US authorities reportedly suspect that Kraken allowed users to access its services from Iran, a violation of sanctions that have been in place on the country since 2019.

The NYT said that the US Treasury is likely to hit Kraken with fines and that a timeline for enforcement isn’t clear. In a statement, Chief Legal Officer Marco Santori said that “Kraken has robust compliance measures in place and continues to grow its compliance team to match its business growth”. Moreover, “Kraken closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues”.

FTX In Discussions to Buy Bithumb

Major global cryptocurrency exchange FTX is in talks to purchase South Korean crypto exchange Bithumb, reported CNBC on Tuesday. Reportedly, Bithumb owner Vidente is mulling a full sale of Bithumb, or a partial sale, with the company not having made a final decision just yet.

Despite the ongoing so-called crypto winter, FTX has been making moves to expand its crypto market presence in recent months. The crypto exchange agreed to provide crypto lending platform BlockFi with a $400 million revolving credit facility back in June and may acquire the firm for as much as $240 million.

Big Tech Earnings and Fed Meeting in Focus

Overnight, Wall Street delivered a mixed performance thanks to the growing caution ahead of earnings from the tech titans, as well as the Federal Reserve decision on Wednesday. In the FX space, the dollar weakened against most G10 currencies while gold traded within a tight range, waiting for a fresh fundamental catalyst. Oil prices are on the front foot this morning following reports that Russia plans to tighten its gas supplies on Europe.

On the data front, the IMF will be in focus today as it releases an updated world economic outlook. There are also a couple of key economic releases from major economies over the next few days, especially in the United States. It may be wise to keep an eye out on the latest US consumer confidence report for July, US Q2 GDP, and the PCE core deflator among other key economic releases.

The tech megacaps will be under the spotlight as they publish their earnings this week. Google’s parent company, Alphabet, and Microsoft announce their results today after US markets close. Meta, Amazon, and Apple report their earnings over the next few days. If these titans report much better than expected quarterly result, this could support US equity markets, especially the Nasdaq 100 which is down almost 25% year-to-date.

It’s all about the Fed meeting

The Federal Reserve is widely expected to raise interest rates by 75-basis points for a second straight meeting tomorrow. However, the main focus will be directed towards Fed Chair Jerome Powell’s post-meeting conference. When considering how financial markets remain highly sensitive to any topic relating to inflation and interest rates, Powell will have to choose his words very wisely.

He is likely to highlight the Fed’s determination to extinguish inflation while inflicting more pain on the economy with continued policy tightening. While the U.S economy seems to be holding steady with the latest employment numbers encouraging, inflation remains a cause for concern as consumer prices jumped 9.1% in June from a year earlier. There have also been worrying signs from recent data with weakness in business survey data and the jobless claims.

If the Fed moves ahead with a 75-basis point hike, this may not be enough to keep dollar bulls in the driving seat. Such a move needs to be complemented by firmly hawkish comments from Powell, feeding speculation around more aggressive hikes this year. Should the Fed surprise the market with a smaller than expected hike, this could send the dollar tumbling with a cautious-sounding Powell adding insult to injury. Whatever the outcome of the Fed meeting, it is likely to influence the dollar which has weakened against most G10 currencies this week.

Commodity spotlight – Gold

Gold is likely to remain on standby until the Fed rate decision on Wednesday. The precious metal has barely moved since Monday due to the absence of a fresh directional catalyst. It will be interesting to see how gold reacts when the Fed moves ahead with a 75-basis rate hike. Will the precious metal weaken due to its zero-yielding status? Or will a weaker dollar limit downside losses?

Looking at the technical picture, prices are trading around the $1724 level as of writing. The $1700 remains a key point of interest this week and a level that can determine whether gold rebounds or extends the decline.

For more information visit FXTM.

Does the Crypto Crash Affect Web3’s Future?

Key Insights:

  • Over the last two months, the crypto markets have witnessed massive corrections.
  • The global cryptocurrency market cap has shrunk to $930 billion, but traditional markets are taking a beating too.
  • The Web3 and blockchain market is anticipated to register a CAGR of 45.20% despite the recent crash.

American internet entrepreneur Chris Dixon has defined Web 3.0 as ‘the internet owned by users and builders orchestrated with tokens.’ While Dixon’s definition of Web 3.0 doesn’t describe the entirety of the same, it does, however, present a decent picture of what Web 3.0 is truly capable of.

More often than not, mainstream media and newbies put words like blockchain, NFTs, Web 3, DeFi, and many others under a more significant umbrella term – cryptocurrencies.

Over the last two months, crypto markets have witnessed massive corrections. News pieces and blogs have been filled with narratives of ‘crypto is dead.’ Amid the larger bearish undertone, a lot of critics and analysts have argued whether the recent crash would derail the future of Web 3.0 and blockchain.

So, Is Crypto Dead?

Well, while some say ‘crypto is dead,’ others believe that it could just be playing dead. Even though crypto market enthusiasts are desperately waiting for cryptocurrencies like bitcoin, ether, and altcoins to bounce back with their full might, it wouldn’t be wrong to say that a significant recovery could be a little optimistic for now.

The global cryptocurrency market cap has shrunk to $938.66 billion as of July 7, from the $3 trillion high it touched in November 2021. While numbers present a gloomy picture, it’s not just the crypto market that’s bleeding.

2022 has also been a year of losses for major indexes. High inflation, rising interest rates, and growing concerns about corporate profits and economic growth affect investors’ appetite for risk. The technology-heavy Nasdaq Composite Index is down over 25% through roughly the first six months of 2022, while the S&P 500 Index is down by nearly 20%.

The crypto market has been ravaged by weak global cues amid heightened inflation and interest rate hikes. Crypto investors and traders are now wondering whether the market will bounce back again this year.

While tension and panic continue to plague crypto investors, it needs to be kept in mind that macro market conditions haven’t been ideal. In fact, the higher correlation between cryptocurrencies and the traditional finance markets could be viewed as a positive move as this cloud mean that cryptocurrencies as an asset are maturing.

Innovation Stays Intact

While cryptocurrencies being an asset class, are prone to volatility and price change, pretty much like stocks, blockchain technology on which Dapps are made, and crypto functions is an ever-growing technology.

Notably, a May 5 report by Prophecy Market Insights presented that the global Web 3.0 blockchain market accounted for $1231.54 million in 2020 and is estimated to be $87761.35 million by 2030. The sector is anticipated to register a CAGR of 45.20%.

On the other hand, according to another report, the IT services market is expected to register a CAGR of about 10.36 % during the forecast period, 2022-2027.

Thus, numbers indicate a healthy growth graph for blockchain technology and the Web 3 market. Seemingly, innovation continues to take place even though the price trajectory was largely disappointing for the crypto crowds.

Crypto narratives in mainstream media have also been plagued by standalone events like Terra and Celsius’s collapse over the last few months. The marketwide sell-offs, lower open interest, and larger-scale lay-offs in the crypto market added to the space’s bearish pressure.

A Crypto Recovery Incoming

This isn’t the first time the crypto market is seeing a significant pullback; in 2015, 2018, and then 2020, during the pandemic – the global crypto market has seen its ups and downs. Over the many bear markets and long-drawn price pullbacks, the technology behind cryptocurrencies has only evolved.

Taking a look at the previous market cycles highlights that market volatility and macroeconomic conditions have often affected the price of cryptocurrencies pulling the larger market down. While bear markets give rise to lay-offs and selloffs in the market, portraying doom for the space, it’s only the tip of the iceberg.

As the technology and the Web 3.0 narrative grows, a certain market maturation silently takes place on the side. Nonetheless, critics of the space have long argued that using digital currencies for online interaction gives users a financial motivation to take actions previously freed of commercial incentives. The same could financialize online services and lead to interactions becoming a business.

However, crypto geeks and supporters of the space argue that crypto critics fail to reflect the highly diverse nature of online services.

That said, a lot of traditional finance giants like Amazon, Meta, Google, HSBC, and IBM have also embraced crypto and blockchain. A majority of institutions cite consumer demands and the larger adoption of Web 3 as a reason behind turning towards the space.

Nonetheless, the adoption narrative has received a beating due to the larger bear market. In fact, the bearish blues have slowed down the larger crypto adoption, especially since newcomers are cautious about their entry into the space. However, the crypto crash hasn’t derailed the crypto or Web 3 adoption, if at all, it has delayed the pace of growth.

Indian Crypto Community Faces Brain Drain, Blames Unclear Regulations

Key Insights:

  • Several crypto and Web3 entrepreneurs in India are now migrating to “crypto-friendly” countries like Dubai.
  • Uncertainty in India’s crypto market and the new taxation laws have prompted the brain drain.
  • Several countries have a tax-less approach toward cryptos that lure businesses to migrate.

It has been a real “quit India movement” for several crypto exchanges and founders who have moved to friendlier locations over the past several years. This is due to the plenty of uncertainties in India’s cryptocurrency market.

For instance, WazirX, owned by the world’s biggest crypto exchange Binance (BNB), saw its co-founders, Nischal Shetty and Siddharth Menon, relocate to Dubai in April.

The company said that it is a “remote-first” organization, although the exchange’s operations continue from its Mumbai headquarters, . Sameer Mhatre, CTO and the company’s third co-founder, would reportedly lead the exchange from India.

In the wake of the Indian government imposing a 30% crypto tax and 1% TDS, among other tight clampdowns, WazirX moving its headquarters to Dubai would be a significant development. The imposition of tax has caused trading volume to drop across all crypto exchanges in India.

ZebPay exchange, operating almost half of all crypto transactions in the country in 2018, shuttered operations and moved to Singapore. Another crypto platform Vauld had a similar story of setting up its operations in Singapore to hedge against regulatory uncertainty.

New tax rules burden Indian exchanges

According to the Indian Express report, top management of crypto and Web3 companies in the country are fleeing to Dubai and Singapore in a bid to find a more crypto-friendly atmosphere.

A top official from India’s largest crypto trading platform noted that the bear market is the phase for crypto companies to build products and solutions. The official noted,

“We are in a bear market right now, and this is the time when products and solutions are built. Some of the biggest companies in the Web 2.0 space, like Google and Facebook, were also built during a slowdown phase. This is why many people who are building crypto and Web 3.0 products are moving to jurisdictions with more policy clarity.”

Per a recent Economic Times report, around 30 to 50 Indian crypto and blockchain entrepreneurs and founders run their businesses out of countries like Dubai and Singapore.

The return of the Reserve Bank of India’s (RBI) push for a crypto ban, similar to its de facto ban in 2018, has contributed to extending the brain drain, local industry stakeholders said.

Akshay Aggarwal, the co-founder of crypto community Blockchained India, told Forkast,

“The country is probably suffering more because of the uncertain stance than anything else. The builders are moving out to register headquarters and pay taxes in foreign jurisdictions.”

Siddharth Sogani, founder and CEO of Crebaco, which performs cryptocurrency and blockchain research, recently tweeted that India would see the largest brain drain in history in the next 8-12 months.

Polygon co-founder Sandeep Nailwal is among the talent pool who moved out of India in 2020. He noted that the mass brain drain is “absolutely crazy.”

“It doesn’t make sense for us or any team to expose their protocols to local risks.”

Potential of operating from crypto-friendly countries

On the other hand, countries like Dubai, the British Virgin Islands, and Singapore top the wish list for relocation, given their taxless approach towards crypto and legalizing the asset class.

For instance, Dubai has set up the Virtual Assets Regulatory Authority (VARA), which attracts investments across the globe, providing a system to protect investors. Profits from selling crypto assets are tax-free, other than 5% VAT.

Similarly, Singapore is among those nations actively promoting the crypto ecosystem, offering incentives to attract talent pools and policy promises to investors.

However, offshore crypto exchanges may still be subject to certain taxes and levies in India. Indrajeet Sircar, legal and tax counseling worldwide at Nishith Desai Associates, told CNBC,

“These could include an equalization levy and obligations to withhold tax against payments made by Indian residents towards purchasing VDAs over such exchanges. There may also be implications under GST depending on how authorities view and classify the services of such exchanges.”

Top 10 Cryptocurrencies To Watch in June 2022

Key Insights:

  • After the crash of May 9, most of the cryptocurrencies fell to their lowest in months.
  • Since last week, the crypto market has regained its lost $138 billion.
  • Top cryptos for the month of June include Terra 2.0, ApeCoin, Dogecoin, and more.

The cryptocurrency market, over the course of the last five months, has witnessed a lot of fluctuations and shifts in trends, but the one thing that did not change was the broader market bearishness.

However, the worst of it came to form only this May when the crypto market crashed twice within the same month.

Today all the cryptocurrencies in the market amount to $1.28 trillion after a 12% recovery three days ago, which brought $137.3 billion back into the market.

And even though one may not have found the best opportunity to make profits this month, the month of June certainly presents an opportunity to make gains with these cryptocurrencies that show promise going forward.

1. Bitcoin

Starting off with the king coin, Bitcoin, regardless of the market conditions, is always a good choice since it will find room for growth with minimal fluctuations.

Since BTC holds a 43% domination in the crypto space, a broader market rally will trigger a rise for BTC as well, and those who enter the market at $30k will certainly gain profits by the end of quarter 2.

Trading at $31,583, BTC is set to rise further after the 11.27% rally noted this week.

2. Cardano

With the Vasil hard fork set to arrive by the end of June, Cardano, at the moment, is one of the biggest coins to look forward to as investors expect this to be the turning point for the cryptocurrency.

A similar bullishness was also noted last year when the Alonzo hard fork was set to activate, and hopefully, this time around, investors can actually recover their losses.

ADA recently noted a 37.44% rise which brought the price up to $0.61, inching it closer to the critical support of $1.

3. Terra 2.0

Although Terra’s UST and LUNC (now Terra Classic) was the cause of one of the biggest crash in the history of crypto this month, Terraform Labs is giving it another shot.

Last week they launched a new blockchain with a new set of tokens still named LUNA to retrace their steps back to their peak.

Despite the depegging and subsequent LUNC supply overflow, Terra as a blockchain holds a lot of potential in the DeFi space, and that will be LUNA 2.0’s boon going forward as it trades at $7.19 today.

4. ApeCoin

Although it has been well over two months since its launch, ApeCoin hasn’t exhibited skyrocketing feats.

The reason behind this is the unfortunate timing as the broader market bearishness combined with the crash of May 9 halted its growth, and the altcoin came crashing down by 75.88%

But that doesn’t take away from the fact that APE is one of the most profitable projects in the crypto space, thanks to it being the token of the Bored Ape Yacht Club NFT collection.

The biggest NFT project will only grow further when the BAYC NFT-based feature film is released, and consequently, APE will skyrocket.

5. Dogecoin

The meme coin lives! It is a surprise that DOGE continues to be one of the topmost cryptocurrencies globally and that it has endured the recent crashes.

While Dogecoin does not have much to offer as a blockchain and cryptocurrency, its resilience definitely makes it a worthy investment vehicle. 

Besides, the meme coin will always have the backing of the “DOGEfather” Elon Musk, who recently made it a viable payment option for its SpaceX merchandise.

6. Axie Infinity Shards

One of the biggest Gaming tokens in the crypto space, AXS has always held its position as a profitable crypto investment.

Although the token took a hit in January after Axie Infinity’s Ronin bridge was hacked for $625 million, and once again during the recent crash, AXS has bounced back quickly. 

Supported with the launch of Axie Infinity Origins in May, AXS noted the highest single-day rally in more than six months of 35.22%.

As the GameFi protocol continues to expand, AXS will also continue to grow thanks to its utility and value.

7. Flow

If this is a name you haven’t heard before, you’re not alone. Up until a few days ago, Flow wasn’t a big deal, but in the last week of May, the blockchain and token shot up in value owing to the announcement of a prominent Instagram artist’s NFT project on the Flow blockchain.

Consequently, FLOW became the biggest NFT token with a market cap of $2.74 billion, surpassing ApeCoin.

However, this is not what makes FLOW an unmissable opportunity. The blockchain created by Dapper Labs, creators of CryptoKitties, is backed by some major industry players, including Coinbase, Google Ventures, Samsung, Reddit, and Zynga, among others.

This makes the token a highly valuable asset that is poised to witness growth going forward.

8. Uniswap

Uniswap does not warrant an introduction as it is the biggest Decentralized Exchange (DEX) in the world.

Although the entire DeFi space is relatively quiet right now owing to the bearishness in the market, Uniswap still managed to maintain an average transaction volume of $10 billion every week.

As the market recovers, so will the DeFi space, and DEX’s will be in high demand. Naturally, UNI will observe high traction, eventually placing it on the path to a rally, which it might already be on given its recent 17.27% increase.

9. Decentraland

Known to be the pioneer of Metaverse, the Decentraland is definitely a cryptocurrency to look out for this month as Metaverse is becoming a place of choice for not just the crypto niche but also for mainstream industry players who are using it as a means of marketing.

Thus Decentraland is set to observe high demand, which will automatically trigger a rise for MANA.

As it is, the token was the first and the quickest cryptocurrency to recover from the crash of May 9, when it rose by 92.69% in 48 hours.

10. The Sandbox

Last but certainly not least, The Sandbox is also a rising star in the crypto space, being a Metaverse platform.

The Sandbox, although it has been on a downtrend since its all-time high of December, still is a sure-shot investment option, given it recently surpassed the likes of AAVE and Axie Infinity by market cap.

Plus, recently, the platform became the new home of the King of Rock and Roll, Elvis Presley, whose NFTs will be launched as avatars in the Metaverse.

As the market comes closer to the end of the second quarter, it will be interesting to see which other altcoins rise the ranks to become the next big investment option.

Top Experts From Microsoft, Google Call to Crackdown Crypto Lobbying

Key Insights:

  • Leading scientists and academics sign a letter to US legislators asking to counter the crypto industry’s influence.
  • The letter outrightly rejected claims made by crypto advocates who attempt to regulate the sector.
  • Crypto industry influencers increased from 115 to 320 in the past four years.

Recently, cryptocurrency tycoons are emerging as the new players in American politics. Bitcoin’s (BTC) most ardent supporters are driving an influx of cash into campaigns across the US.

On the other hand, the country and most of its congressmen are also turning “pro-crypto” by considering new regulations to streamline the frothy industry. Crypto advocates in the United States have been putting extra effort into supporting the sector. A recent report said that crypto lobbyists have nearly tripled since 2018.

While politicians such as Rep. Ritchie Torres, a New York Democrat, are encouraging citizens to support the crypto market, a bunch of top technologists and scientists have challenged the growing influence of crypto influencers and lobbyists.

“Counter-lobbying” efforts

Tech experts Miguel de Icaza from Microsoft, Kelsey Hightower, a principal engineer at Google Cloud, and top academics, including Harvard lecturer Bruce Schneier have jointly called for a crackdown on the influence of the rapidly growing crypto industry.

In a letter addressed to US lawmakers, the group has “counter-lobbied” the burgeoning digital assets sector, criticizing crypto investments and the underlying blockchain tech.

The letter, seen by the Financial Times, read,

“We urge you to resist pressure from digital asset industry financiers, lobbyists, and boosters to create a regulatory safe haven for these risky, flawed, and unproven digital financial instruments.”

The letter included the names of Senate Majority and Minority Leaders Charles Schumer and Mitch McConnell, Republican Patrick Toomey, and Democrat Ron Wyden. Patrick and Ron have supported a few crypto developments previously.

The letter intends to lessen the negative impact of crypto lobbying, such as the recent Terra network collapse that overturned the entire crypto community. Many investors have lost a fortune in their Terra (LUNA) and TerraUSD (UST) savings.

Although several individuals have questioned the safety and reliability of cryptos, the joint approach marks the first ‘organized effort’ to counter the attempts of crypto advocates to lure mass focus, the FT report said.

A pro technologist and an academician, Bruce Schneier, once said cryptos are “useless.” He said that the claims made by advocates on cryptocurrencies are not true. He said,

“It’s not secure, it’s not decentralized. Any system where you forget your password and you lose your life savings is not a safe system.”

Another signatory and a London-based software engineer Stephen Diehl called the letter “counter-lobbying,” while de Icaza, a former Microsoft engineer, said that millions of dollars are being wasted in getting crypto equipment. 

The letter noted,

“Crypto-assets have been the vehicle for unsound and highly volatile speculative investment schemes that are being actively promoted to retail investors who may be unable to understand their nature and risk.”

Crypto lobbyists triple since 2018

The reason behind fears and counter-lobbying efforts is that the businesses that influence crypto policy in the US have skyrocketed in the past four years. 

A new study released in March by Public Citizen noted that crypto lobbyists have nearly tripled since 2018. Per the findings, the number of crypto influencers jumped to 320 in 2021 from 115 in 2018.

Apart from this, the spending on crypto lobbying quadrupled from $2.2 million in 2018 to $9 million in 2021. The expenditure was driven by crypto exchange giant Coinbase (COIN), Ripple (XRP) Labs, and Blockchain Association. The study noted that each of these participants spent over $2 million on lobbying between 2018 and 2021.

The Top NFT Trading Strategies for Investors in June

Key Insights:

  • The NFT industry today is a $21 Billion market with over $61.83 Billion traded to date.
  • The popularity of NFTs has also impacted the token market as collections have launched their one token.
  • The recent crash has set NFTs up as an investment hedge for the crypto market’s volatility.

When Non-Fungible Tokens (NFT) first came into existence in 2014, they were just another innovation in the still-developing web3 space.

It took another six years for the same NFTs to find value, and by the end of 2021, these NFTs became mainstream and turned themselves into an investment vehicle.

Thus as we approach the end of the second quarter, here are some ways in which you can too become a part of this community.

The NFTs Trading Strategy

Investing in NFTs isn’t the same as investing in cryptocurrencies as, unlike the latter, NFTs cannot be bought and sold per the market movement as each individual NFT have different values.

For example, one can buy a Bitcoin and sell it the next day and repurchase it the day after, and that Bitcoin would be the same as the first purchase.

However, if you buy a CryptoPunk and sell it, you may never be able to buy it back, and any other CryptoPunk won’t be the same as the first one.

Every NFT is different from others even if it has minor differences | Source: CryptoPunks

Thus should you decide to invest your money into these Non-Fungible Tokens, you must be prepared.

Value the Project, Not the NFT

In many cases, investors tend to jump for NFTs that are either suddenly trending or are insanely expensive and ignore the lesser expensive NFTs, thinking they may hold no potential value. That is where one may lose out on a good opportunity. 

Projects that are backed by big names and have been developed by notable artists will hold a much higher value in the long term, and one should aim for them.

Reputation and Community

Since NFTs are a relatively newer breed of crypto, they also remain vulnerable to scams and rug pulls.

In the past, too, projects such as Frosties and Evolved Apes have managed to get away with rug pulling investors up to $3 million in NFT value, even though they were some of the most trending projects.

This is why it’s necessary to ensure that any NFT project has a credible developer team that is transparent with the community.

Buy High, Gain More

Another intelligent trading strategy when it comes to NFTs is to make sure that you are not only the first ones but also the topmost in the community.

Getting in on collections can be done by buying at the lowest price point or by buying at the highest.

If you pick the latter option, you should be prepared to shell out big bucks, as in some cases, rarest and highly valued NFTs can cost as much as $33 million.

However, this also makes you the owner of the rarest and the most in-demand NFT, which can then be held on to or sold for profit in the future.

But Buy Low As Well

This strategy depends on the NFT collection. In the case where you find a project that has growth potential, get in on the floor price. As the value appreciates, the floor price would rise as well, making even the most common NFTs profitable for you.

Do Not Shy Away From Trends

While trending NFT projects may not necessarily be the most valuable investment options, they do serve as a solid opportunity for scalping in the long run. This strategy is an effective trading method in the derivate space but can also be applied to trending NFTs. 

One can buy a most basic NFT as soon as the collection begins rising in popularity and demand and sell for profit once it’s at its peak.

However, a trader needs to be on top of the changing trends as the NFT market is also prone to volatility.

Just recently, one of the top NFT collections, CryptoPunk’s floor price dropped from 61 ETH ($107k) to 47.32 ETH ($83.6k) in the span of a month. Situations as such must be avoided in such a strategy.

NFT collections’ price | Source: The Block

The More, the Merrier!

It doesn’t take a genius to deploy this strategy. Simply combining the factors from the abovementioned strategies, one can expand their portfolios by investing in more than just one NFT project.

With the Metaverse growing as well, many NFT collections are integrating themselves with the virtual world to create deployable avatars of the NFTs. This gives utility to an NFT even if it isn’t valued on the basis of scarcity, resulting in an increase in price. 

Making investments this way also prevents excessive losses as a decline in the value of one NFT can be balanced by the increase in the value of some other NFT in the portfolio.

Invest in NFTs by NOT Investing in NFTs

Lastly, there are ways for an NFT enthusiast to still find exposure to these tokens without risking themselves directly. This can be done by investing in tokens of the NFT projects, marketplaces, or blockchains that they are associated with. 

Examples of the same can be found in ApeCoin (APE), the token of the Bored Ape Yacht Collection, which was launched last year and currently has a market cap of $1.75 billion.

ApeCoin is an option for investing in NFTs without being directly exposed to BAYC

Another such token is FLOW of the Flow Blockchain, which has exploded in demand over the last couple of days.

FLOW crypto exploded socially | Source: Google Trends

Backed by the likes of Coinbase, Dreamworks, Samsung, and Google Ventures, the Flow blockchain was created by Dapper Labs, who are also responsible for creating the NFT collection, Cryptokitties.

In conclusion, there are many ways for one to invest in NFTs, provided they utilize the most optimal strategies to gain profits.

The Internet is Flawed and Web3 is The Answer: a16z

Key Insights:

  • The internet is currently dominated by big tech oligopolies and digital authoritarianism.
  • Web3 will enable decentralization and user ownership of data and content.
  • Ethereum is the industry standard, but high demand increases network fees.

This week, Crypto venture giant Andreessen Horowitz released its latest state of the industry report, revealing the firm’s take on Web3 and the Ethereum ecosystem.

Web3 is the buzzword of 2022 and essentially refers to the evolution of the internet beyond its current state. According to a16z, the “internet as we know it is flawed” because big tech oligopolies and digital authoritarianism dominate it.

It stated that after the friendly beginnings of Web2, companies have become more “extractive and less cooperative,” presumably referring to web giants such as Google (GOOG) and Meta (formerly Facebook – FB) though it didn’t directly mention them.

Web3 is different, however, as it aligns network participants to work together toward a common goal: the growth and health of the network. Users can own a part of the internet and be in control of their own data, which is the complete opposite of the current state of things controlled by a handful of data harvesting monopolies.

Ethereum a Double-Edged Sword

The report stated that Web3 is a multi-chain environment with Ethereum (ETH) dominating the ecosystem with 5.5 million active addresses and 1.1 million daily transactions.

It added that while there are plenty of rival blockchains such as Solana (SOL), BNB Chain (BNB), and Avalanche (AVAX), Ethereum block space demand is unmatched. Ethereum also continues to attract the most developers, keeping it ahead of the competition.

Nonetheless, the company did warn that Ethereum’s popularity is also a “double-edged sword” since it has suffered scaling issues resulting in astronomical network fees during times of peak demands. Average gas fees spiked to over $200 per transaction on May 1 following a much-hyped nonfungible token (NFT) launch. Layer-2 networks have emerged and are competing to bring those fees down, however, there is now a lot more choice than ever before.

The company determined that it is still very early days for crypto and Web3, stating:

“We estimate there are somewhere between 7M and 50M active Ethereum users today. (Compared to the internet, that puts us somewhere around the year 1995.).”

Crypto is far more than just a financial innovation, it added explaining that social, cultural, and technological factors are all rolled in. “There’s a lot of room to build, and we believe there will be multiple winners,” the report concluded.

ETH Battered by Bears

The positive long-term fundamental outlook for Ethereum has not kept the bears at bay this month. Since the beginning of May, the world’s second-largest digital asset by market capitalization has lost almost 30% of its value.

Over the past 24 hours, ETH prices have dropped 1.2%, edging closer to that psychological $2,000 support level. At the time of writing, it was trading at $2,050, having lost 12.6% over the past week.

ETH is currently trading down 58% from its November all-time high, and it looks like the bears are not finished with it yet.

Best Oversold Stocks to Buy Now for May 2022

Markets and Big Money in the Last Six Months

See, I like to look at data. My research firm, MAPsignals, tracks the Big Money because we believe that’s what tends to move markets. Right now, there’s tons of selling (red bars), but making matters worse is the lack of buying (blue bars):

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When red bars run rampant, great names can get crushed. They can become what I call “oversold.” When this happens, even the best stocks can get caught in the selling rush – and that can mean opportunity.

Two sectors that have been getting slammed for a while are financials and technology. So, this is where I’m going to look for the best oversold stocks. These areas beaten down right now, but they tend to be big growers historically, so it’s time to be opportunistic.

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There are some great stocks being sold right now in these sectors. They’re fundamentally sound companies with good histories, which means discounts for long-term investors. Here are five stocks seeing lots of red that appear to be near-term oversold: FB, AAPL, GRMN, GOOGL, and V.

Meta Platforms Inc. (FB) Analysis

Up first is Meta, formerly Facebook, which is the social media and advertising heavyweight.

Even though great companies’ stocks can be volatile, like FB over the past year, they’re worthy of attention, especially on pullbacks. Check out Meta:

  • Year-to-date month performance (-37.0%)
  • Recent Big Money sell signals

To show you what our Big Money signals look like on a stock, have a look at all the buys and sells in FB over the past year:

Looking more broadly, Meta has been a high-quality stock for years. The blue bars in the chart below show when FB was a high-ranking stock likely being bought by a Big Money player, according to MAPsignals. When you see a lot of blue, it can be very bullish:

Source: www.MAPsignals.com

Those blue signals indicate Big Money buying and solid fundamentals. As you can see, Meta’s sales growth and earnings outlook have been strong, making it worthy of attention:

  • 3-year sales growth rate (+28.5%)
  • 2-year vs. 1-year EPS growth rate estimate (+18.5%)

Apple Inc. (AAPL) Analysis

Next up is Apple, the technology giant famous for its iPhones, Mac computers, and more.

Check out these technicals for AAPL:

  • Year-to-date performance (-17.0%)
  • Recent Big Money sell signals

It’s been getting bought and sold, but the uptrend is undeniable:

Now let’s look long-term. Below are the top buy signals for Apple since 2010. The Big Money has been on it for a while:

Source: www.MAPsignals.com

Let’s look under the hood. As you can see, Apple has had rock-solid, double-digit growth in earnings and owns a nice profit margin:

  • 3-year EPS growth rate (+67.2%)
  • Profit margin (+25.9%)

Garmin Ltd. (GRMN) Analysis

Another growth name is Garmin, the navigation company offering global positioning system and fitness solutions across a wide range of customers.

Strong candidates for growth usually have Big Money buying the shares. Garmin has historically had that. But recently, it’s full of red, which could be an opportunity:

  • Year-to-date performance (-18.0%)
  • Historical Big Money signals

Below are the blue Big Money signals GRMN has made since 2014. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s dig deeper. Earnings growth for Garmin has been impressive. I expect more of the same in the coming years. Its tiny debt is also encouraging for the future.

  • 3-year EPS growth rate (+16.1%)
  • Debt/equity ratio (1.5%)

Alphabet Inc. Class A (GOOGL) Analysis

Number four on the list is Alphabet, which is a huge tech firm and the parent company of Google.

Here are the technicals important to me:

  • 1-month performance (-16.3%)
  • Historical Big Money signals

Since last winter it’s been on a steep downward slide, with more Big Money selling than buying:

But Alphabet is a Big Money favorite. Below are the Big Money Top 20 buy signals for GOOGL since 2004:

Source: www.MAPsignals.com

Let’s look under the hood. Despite the price slide, Alphabet sales have jumped quite a bit, and earnings are expected to keep growing:

  • 3-year sales growth rate (+24.0%)
  • 2-year vs. 1-year EPS growth rate estimate (+19.2%)

Visa Inc. (V) Analysis

Our last growth candidate is Visa, the enormous credit card and payment company. Like most financial stocks, it’s not had the easiest year:

Check out these technicals:

  • 1-month performance (-7.9%)
  • Historical Big Money signals

But V is a high-quality stock since it’s made the MAPsignals Top 20 report. As you can see below, it’s been a Big Money favorite for years. Right now, it’s on a bit of a pullback and could be an opportunity:

Source: www.MAPsignals.com

Now let’s look below the surface a bit. Sales have been growing, it’s highly profitable, and the earnings outlook is solid:

  • 1-year sales growth rate (+10.3%)
  • Profit margin (+49.8%)
  • 2-year vs. 1-year EPS growth estimate (+16.9%)

Bottom Line and Explanatory Video

 

FB, AAPL, GRMN, GOOGL, and V represent the top oversold stocks for May 2022. They’ve been sold a lot lately…perhaps too much. Strong, fundamentally-sound stocks seeing near-term sell signals are worthy of extra attention because of their long-term potential.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in GRMN, GOOGL, and V in personal and managed accounts.

Contact

https://mapsignals.com/contact/