S&P 500 (SPY) Remains Stuck Near The Key 3635 Level

Key Insights

  • S&P 500 continues its attempts to settle below the support at 3635.
  • Nike is down by more than 10% as the company’s report showed that margins declined. 
  • S&P 500 will likely need strong catalysts to get below the support area in the 3600 – 3635 range. 

S&P 500 Is Mostly Flat Ahead Of The Weekend

S&P 500 is currently trying to settle below the key support level at 3635 as traders are not ready to increase risks ahead of the weekend.

Today, the U.S. released the final reading of Michigan Consumer Sentiment report, which indicated that Consumer Sentiment increased from 58.2 in August to 58.6 in September. PCE Price Index increased by 0.3% month-over-month, compared to analyst consensus of 0.1%. These reports have put some pressure on stocks.

Carnival stock is down by more than 20% as the company’s quarterly report missed analyst consensus on both earnings and revenue. Advanced bookings for the fourth quarter were below historical averages, which put significant pressure on the stock. Norwegian Cruise Line and Royal Caribbean have also suffered strong sell-offs.

Nike is down by 12% today as its quarterly report indicated that margins declined. The company noted that it was working hard to get rid of excess inventory, which put pressure on margins.

Today’s trading session is choppy, and several market segments like REITs and basic materials are moving higher. It remains to be seen whether traders are ready for big moves ahead of the weekend.

Support Near 3635 Stays Strong

S&P 500

S&P 500 has already made several attempts to settle below the support level at 3635 in recent trading sessions. RSI is close to the oversold territory, but there is enough room to gain additional downside momentum in case the right catalysts emerge.

Currently, S&P 500 has strong support in the 3600 – 3635 range. To gain strong downside momentum, it will need to settle below 3635 and test the next support at 3600.

Most likely, stocks will need significant catalysts to continue the current trend without a rebound. S&P 500 is down by roughly 25% from yearly highs, so many traders and investors are willing to buy various stocks at a discount.

At the same time, the situation in the economy may get worse in the upcoming months, so S&P 500 has a decent chance to move lower.

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

Worries About Earnings Growth Potential and Financial Market Dysfunctions Lead the Market

Bulls continue to face strong headwinds amid worries about earnings growth potential and financial market dysfunctions.

Apple Selloff

Investors seemed particularly caught off guard by a rare downgrade to Apple‘s stock by Bank of America following reports of low iPhone demand. The resulting selloff left the stock down almost -5% and wiped roughly -$120 from Apple’s market cap. Apple is of course America’s most valuable publicly traded company, which means it is the most heavily weighted stock in the S&P 500, accounting for over 7% of the index’s total market value.

Naturally, a big selloff in Apple is going to drag on the broader market. BofA’s downgrade also highlighted bigger concerns that are likely to weigh on other companies’ profitability in the quarters ahead, most notably slower business and consumer spending, and a stronger US dollar.

Bears are quick to point out that early earnings results are already revealing weaker-than-expected Q3 results. Nike‘s results unveiled ongoing supply chain problems as well as lingering excess inventories and currency headwinds. CarMax yesterday was the latest in a long list of companies warning of increasing “affordability challenges” for consumers amid the highest inflation levels in some four decades and rising borrowing costs.

Declining affordability was a key reason behind Moody’s downgrade yesterday of the entire global automotive industry from “stable” to “negative”. The auto industry, similar to Apple, Nike, and most other companies, is also struggling with ballooning costs related to raw material shortages, tight labor markets, and skyrocketing energy prices.

Bottom line, the outlook for earnings in upcoming quarters is fading, making it tough for investors to justify pushing prices any higher at this point. Like I’ve mentioned many times, an earnings recession could actually be worse for the stock market than an actual full-blown economic recession.

Is the Financial System at Risk?

Wall Street also remains nervous about contagion spreading from bond and currency market dysfunctions in the UK, Italy, Japan, China and others.

While every country has unique problems that are partially responsible for recent volatility, it also partially stems from the aggressive monetary tightening being conducted by most Western central banks.

In general, a rising rate environment tends to uncover imbalances and systematic risks that might be unknowingly lurking in financial systems. Just think back to the subprime mortgage crisis and Lehman Brothers collapse in 2008 that eventually erupted into a full-blown global financial meltdown.

Some contend it began when the Fed started lifting rates from 2004 to 2006, going from 1% to 5.25%, which led to an extreme slowdown in the housing market and ballooned the payments on subprime mortgages into unaffordable territory…and the contagion just spread from there.

So when financial markets start acting strangely and central banks are making emergency interventions, investors can be understandably nervous that an even bigger problem might be around the next corner.

On the geopolitical front, Russia is expected to formally annex four Ukraine regions in a ceremony today that’s supposed to include an address from President Vladimir Putin. Some think Putin may offer to enter a ceasefire with Ukraine. While Ukraine is unlikely to agree, they could face pressure from western countries that are worried about the threat of a wider conflict with Russia.

Data to Watch

Looking ahead to next week, the main highlight will be the September Employment Situation due out next Friday. There is a slew of other key data due as well, including ISM Manufacturing and Construction Spending on Monday; Factory Orders and the Job Openings and Labor Turnover Survey (JOLTS) on Tuesday; ADP’s private payroll report, the US Trade Balance, and ISM Non-Manufacturing on Wednesday; and Wholesale Inventories and Consumer Credit on Friday. The only earnings of note next week are Conagra Brands and McCormick & Co. on

BoE is in The Game. Will Fed Follow?

The intervention in Britain came after a central bank committee warned of the risks to financial stability from disruption in the government bond market.

What Happened in UK?

The biggest problems stem from a sharp rise in bond yields that has created massive margin calls for big investment firms, including pension funds.

That led to a lot of funds trying to sell bonds in order to raise cash and risked sparking a downward spiral. The Bank of England is now a buyer of bonds at “whatever scale necessary” and is delaying the start of its quantitative tightening (QT) program – aka its plan to unwind its securities holdings.

The lack of liquidity in Britain’s bond markets highlights a similar issue that some fear we could see happening in other parts of the world. This means that central banks might not be able to be as hawkish as some bears have been thinking.

Will Fed Follow BoE?

Keep in mind, in the USA the US Federal Reserve continues to hike rates at a historically fast clip while also working to reduce its balance sheet.

The Fed is now allowing its holdings of Treasury securities to drop by up to -$30 billion per month by letting them mature without replacement, and its mortgage-backed securities (MBS) to drop by up to -$17.5 billion a month.

The program has already dramatically reduced liquidity in US Treasury markets and some worry things could get dangerously volatile as “Quantitative Tightening” (QT) continues to drain money from the system.

Keep in mind, government debt markets across the world are experiencing extreme degrees of volatility right now, meaning bears believe there’s a heightened risk that something could break and possibly spark a wider crisis across global financial markets.

On the flip side, as I mentioned above, bulls believe the risks of extreme volatility and illiquidity in US bond markets could prompt the Fed to pause some of its tightening plans sooner than currently anticipated.

The Fed did reverse course on its asset reductions during its first and only attempt at QT back in 2019.

Several Fed officials have noted that the Fed’s aggressive pace of tightening does pose some risks, including recession, but most right now believe “inflation” is the bigger threat to both economic and market stability.

Data to Watch

Investors get an update on inflation on Friday from the PCE Prices Index. Wall Street expects the year-over-year headline rate to fall again for August but the “core” rate, which strips out food and energy prices, is expected to climb from +4.6% to +4.8%.

Today, the final read of Q3 Gross Domestic Product (GDP) is the data highlight. On the earnings front, Bed Bath & Beyond, CarMax, Carnival, Micron, and Nike results are due today, which we mistakenly had slated for yesterday…sorry for any confusion.

Turning to geopolitical headlines, the US yesterday joined most other governments around the world in condemning Russia’s moves to take over separatist-backed regions of eastern Ukraine after holding what the White House called “illegal and illegitimate” referendums. Officials say the vote was orchestrated by the Kremlin and could represent a major escalation of the war if Russia tries to claim that Ukraine is attacking what is now Russian territory. At least that is the theory.

Ukraine is asking for significantly more military support from the US and other NATO allies and there is talk of more US and EU sanctions against Russia as well.

Who would have ever guessed a year ago we would be sitting here today with the US dollar at twenty year highs, the 30-year mortgage up at 7%, money in a 2-Year Treasury earning +4%, inflation at multi-decade highs, and Russia in a full blown war trying to take over Ukraine.

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.

Best Oversold Stocks to Buy Now for June 2022

When this happens, it can pull in even the best stocks. That means the bad, unprofitable stocks and the best-in-breed stocks are sold off. And that’s bargain time for long-term investors.

Markets and Big Money in the Last Six Months

When trying to make sense of this market, I like to look to data. So, what does the data say?

Well, my research firm, MAPsignals, follows the Big Money because we believe it moves markets. We created the Big Money Index (BMI), a 25-day moving average of Big Money buys and sells. It recently hit oversold levels (below the green line), meaning selling is driving down markets big time:

Chart, histogram Description automatically generated

Oversold territory doesn’t occur often. But when it has in the past, it’s almost always been a bullish indicator. Look at what’s happened after the BMI hit oversold since 2014:

Since 1990, the BMI has been oversold 21 times. It tends to stay oversold for three weeks, with markets troughing two weeks later, on average. Since 1990, the forward-looking returns on the S&P 500 after hitting oversold are 16% after one year and 29% after two years.

This puts us on the lookout for quality stocks that will rise as buyers return and markets trend upward again. We want fundamentally sound companies with good histories and discounted prices. Here are our best oversold stocks to buy now for June 2022: ODFL, MA, HD, LRCX, and NKE.

Old Dominion Freight Line, Inc. (ODFL) Analysis

Up first is Old Dominion, which is one of the largest North American cargo carriers.

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

  • Year-to-date month performance (-31.0%)
  • 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 ODFL over the past year:

Looking more broadly, Old Dominion has been a high-quality stock for years. The blue bars in the chart below show when ODFL 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:

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

  • 1-year sales growth rate (+30.9%)
  • 3-year EPS growth rate (+24.0%)

Mastercard Incorporated (MA) Analysis

Next up is Mastercard, the global payments and credit card giant.

Check out these technicals for MA:

  • Year-to-date performance (-5.0%)
  • Recent Big Money sell signals

It’s been getting bought and sold, as trading has been choppy over the past year:

Now let’s look long-term. Below are the top buy signals for Mastercard since 2006. The Big Money has been on it for a while:

Let’s look under the hood. As you can see, Mastercard has grown sales well and the outlook for future earnings looks good:

  • 1-year sales growth rate (+23.4%)
  • 2-year vs. 1-year EPS growth estimate (+20.5%)

Home Depot, Inc. (HD) Analysis

Another growth name is Home Depot, the world’s largest home improvement retailer.

Strong candidates for growth usually have Big Money buying the shares. Home Depot has historically had that. Until December 2021, it was a darling. But recently it’s seen big selling, which could be an opportunity:

  • Year-to-date performance (-31.0%)
  • Historical Big Money signals

Below are the blue Top 20 Big Money signals HD has made since 1990. It’s clearly a Big Money favorite. That’s the JUICE!

Now let’s dig deeper. Sales growth for Home Depot has been impressive. I expect more of the same in the coming years. Its profit margin and minimal debt also bode well for the future. HD also pays a current dividend of nearly 2.7%.

  • 1-year sales growth rate (+14.4%)
  • Profit margin (+10.9%)
  • Debt/equity ratio (0.0%)

Lam Research Corporation (LRCX) Analysis

Number four on the list is Lam Research, which is a top supplier of processing equipment for the semiconductor industry.

Here are the technicals important to me:

  • Year-to-date performance (-35.0%)
  • Historical Big Money signals

Except for a semi-sustained rise late last year, LRCX has seen more Big Money selling than buying:

But Lam Research is a Big Money favorite, and it pays a current dividend of more than 1.2%. Below are the Big Money Top 20 buy signals for LRCX since 2014:

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

  • 1-year sales growth rate (+45.7%)
  • 2-year vs. 1-year EPS growth rate estimate (+20.6%)

NIKE, Inc. (NKE) Analysis

Our last growth candidate is NIKE, the gigantic shoe and athletic wear company. Last summer it was being bought up, but since then there’s been lots of Big Money selling as discretionary stocks have been pinched due to recession fears:

Check out these technicals:

  • 1-month performance (-16.9%)
  • Historical Big Money signals

But NKE 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 pullback and could be an opportunity:

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

  • 1-year sales growth rate (+18.9%)
  • 2-year vs. 1-year EPS growth estimate (+23.1%)

Bottom Line and Explanatory Video

 

ODFL, MA, HD, LRCX, and NKE represent the top oversold stocks for June 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 HD, LRCX, and NKE in personal and managed accounts.

Contact

https://mapsignals.com/contact/

Under Amour Goes NFT with NBA 3-Point Record Holder Stephen Curry

Key Insights:

  • Under Armour returns to the NFT space with Stephen Curry 3-pointer NFTs.
  • In December, Under Amour dropped an NFT collection to celebrate Curry’s NBA 3-point record.
  • The latest move underlines the NBA’s strong ties with digital assets and Web3.

This week, Under Armour (UAA) returned to the NFT space, with NBA legend Stephen Curry. The US National Basketball Association (NBA) is an advocate of digital assets and Web3.

In 2020, the NBA and Dapper Labs launched the NBA NFT marketplace Top Shot, built on the Flow (FLOW) blockchain.

Going into this year’s NBA playoffs, the NBA strengthened its ties with web3 to drive fan engagement with the launch of NBAxNFT, an NBA Discord. NBAxNFT provides a platform for the NBA and fans to talk Web3.

Under Armour is also no stranger to NFTs.

Under Armour Goes Digital with Stephen Curry 3-Pointer NFTs

Overnight, Under Armour took to Twitter to announce a new NFT collection, tweeting,

“First you Change the Game for Good, then you mutate it. Every 3 @stephenCurry30 hits during the playoffs is a chance to own a piece of history. Learn more at: https://lab.currybrand.com/currycounter.”

 

According to lab.currybrand.com,

“For every three-pointer Stephen Curry makes in a playoff game, three free digital basketballs are claimable by the most engaged fans. Be fast. Others will be trying as well.”

Fans can purchase the Ethereum-based basketball NFTs on the NF3 Counter (Curry Counter).

The NF3 Counter is a fan engagement platform rewarding Curry fans during his battle through the playoffs. For every Curry three-pointer, fans can claim free digital basketballs.

There is only one claim per wallet per game. After minting, owners can view their NFTs on OpenSea, where fans can buy, sell, and trade the basketball NFTs.

The latest launch is not Under Armour’s first brush with Web3.

In December, Under Armour launched an NFT collection to celebrate Stephen Curry’s three-point record on December 14.

Under Armour announced the drop on Twitter, saying,

“In celebration of the greatest 3-point shooter in the UNIVERSE, we are dropping 2,974 pairs of @stephencurry30’s record-breaking shoe in the Metaverse. The “Genesis Curry Flow” NFT drops at 8pm EST: 2974.Currybrand.com.”

 

By owning 1 Polygon (MATIC) based Genesis Curry Flow, holders are entitled to 1 Decentraland (MANA) shoe, 1 Sandbox (SAND) shoe, 1 Gala Games shoe, and 1 Rumble Kong League shoe.

In November 2021, Under Armour launched Curry Brand to compete with Nike and the Jordan brand.

Peloton Is Down By 10%, Here Is Why

Key Insights

  • Peloton is reportedly searching for an investor that could buy a minority stake in the company. 
  • If confirmed, the report signals that the company is facing material problems. 
  • The current market environment is bearish for Peloton as investors rush out of unprofitable companies. 

Peloton Stock Declines After Report Indicates That It Is Searching For A Minority Investment

Shares of Peloton found themselves under pressure after a Wall Street Journal report indicated that the company was searching for investors who were willing to pay for 15% – 20% stake in the business.

Back in February, traders speculated that Amazon, Nike or Apple could buy the company. However, the potential deal never materialized, and Peloton stock has moved to yearly lows.

The WSJ report served as a negative catalyst for Peloton stock as it indicated that the company failed to sell itself and was trying to raise more cash to support the turnaround of its business. The company’s desire to sell a stake is certainly viewed as a sign of financial weakness.

What’s Next For Peloton Stock?

Currently, analysts expect that Peloton will report a loss of $3.92 per share in the current year and a loss of $1.1 per share in the next year, so the company is not expected to be profitable in the near term.

The market is worried that Peloton has already seen peak demand for its products, and that consumers’ preferences have already shifted after the end of the acute phase of the pandemic.

In additon, inflation and supply chain problems may put more pressure on the company’s bottom line. More, the rising interest rate environment is bearish for unprofitable companies like Peloton. In this light, it remains to be seen whether speculative traders will be ready to buy the stock after the current pullback.

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

Nike and RTFKT Go to the Metaverse with CryptoKicks Sneakers

Key Insights:

  • Nike and RTFKT launch CryptoKicks sneakers collection for the Metaverse.
  • In December, Nike bought NFT Sneaker shop RTFKT to drive its web3 goals.
  • Nike went Metaverse in 2021 with ‘NIKELAND’, where players can dress their avatars in Nike products.

As the year progresses, activity in the metaverse continues to gather momentum, with mainstream players identifying web3 as the future.

Metaverse-related trademark filings have been rampant, with Web3 offering endless growth opportunities.

When U.S banking giants JPMorgan and Citi get bullish it is hard to ignore.

In February, JPMorgan put its money where its mouth is, buying land in Decentraland (MANA). JPMorgan projected the Metaverse to deliver over $1 trillion in Metaverse-related yearly revenues.

Last month, Citi delivered a more bullish outlook, projecting a $13 trillion Metaverse by 2030.

NIKE and RTFKT Hit the Metaverse Running with CryptoKicks

Overnight, RTFKT Studios hit Twitter to share a video of the new RTFKT x Nike Dunk Genesis CryptoKicks.

RTFKT tweeted,

“RTFKT, together with Nike CryptoKicks, introduce the future of Sneakers, powered by Skin Vial tech.”

RTFKT and Nike CryptoKicks launch with EVO X, a collection that allows users to change their look with Skin Vials. Skink Vials are collectibles that users can swap.

Collectors can view the Ethereum (ETH) based Skin Vials and RTFKT X Nike Dunk Genesis CryptoKicks Sneakers on OpenSea.

According to OpenSea,

“When equipped with RTFKT Skin Vial NFT, the look of the RTFKT X Nike Dunk Genesis CryptoKicks changes according to the traits of the vial.”

At the time of writing, there were 878 owners with a floor price of 2.79 ETH.

Nike Becomes a Web3 Trailblazer with the Latest Launch

Leading apparel and sports brand Nike is no stranger to web3. In November, Nike went Metaverse with the launch of ‘NIKELAND’, Nike’s Metaverse home on Roblox Corp.

Nike announced the launch of NIKELAND in November, saying,

“Buildings and fields inside NIKELAND are inspired by Nike’s real-life headquarters and hold detailed arenas for the Roblox community to test their skills competing in various mini-games.”

Players can also dress their avatars in Nike products and play games, including Tag, Dodgeball, and The Floor is Lava.

Soon after the launch, Nike purchased NFT sneaker creator RTFKT. Nike purchased RTFKT to support its metaverse goals following the launch of NIKELAND.

There are no other details relating to the CryptoKicks launch, but the RTFKT X Nike Dunk Genesis CryptoKicks could make their way to the NIKELAND digital showroom.

Best Oversold Stocks to Buy Now for April 2022

Stock Markets and Big Money in the Last 6 Months

But that doesn’t change the fact that there’s been a lot more selling than buying over the past six months when it comes to Big Money investors like institutions.

To see what I mean, look at the chart below from my research firm, MAPsignals. We track Big Money activity. The blue bars are Big Money buy signals and the red bars are sells. The light at the end of the tunnel is the absence of red at the far right, but the broader view shows a lot more selling than buying:

It’s been worse for some sectors than others. For instance, the discretionary sector has been walloped over the last year:

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

Oversold Stock Investment Opportunities for April 2022

There are some great stocks being sold right now, many in the discretionary sector. 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: TTD, NKE, SBUX, UPST & TMO.

Trade Desk Stock Analysis

Up first is Trade Desk, Inc. (TTD), a cloud-based advertising platform.

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

  • 1-month performance (-14.1%)
  • 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 (green bars) and sells (red bars) in TTD over the past year:

Looking more broadly, Trade Desk has been a high-quality stock for years. The blue bars in the chart below show when TTD 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, Trade Desk’s sales and earnings numbers have been strong, making it worthy of attention:

  • 3-year sales growth rate (+36.0%)
  • 3-year EPS growth rate (+29.2%)

Nike Stock Analysis

Next up is Nike, Inc. (NKE), the athletic wear giant.

Check out these technicals for NKE:

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

It’s been getting sold a lot recently:

But now let’s look long-term. These are the top buy signals for Nike 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, Nike has had rock-solid, double-digit growth in earnings and sales:

  • 3-year EPS growth rate (+67.2%)
  • 1-year sales growth rate (+18.9%)

Starbucks Corporation Stock Analysis

Another growth name is Starbucks Corporation (SBUX), the well-known coffee brand.

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

  • Year-to-date performance (-22.0%)
  • Historical Big Money signals

Below are the blue Big Money signals SBUX has made since 2010. That’s the JUICE!

Source: www.MAPsignals.com

Now let’s dig deeper. Earnings and sales growth for Starbucks have both been impressive. I expect more of the same in the coming years. It’s also profitable and has little debt.

  • 3-year EPS growth rate (+89.2%)
  • 1-year sales growth rate (+23.6%)
  • Profit margin (+14.5%)
  • Debt/equity ratio (0.0%)

Upstart Holdings Stock Analysis

Number four on the list is Upstart Holdings, Inc. (UPST ), which is a cloud-based artificial intelligence lending platform.

Here are the technicals important to me:

  • 1-month performance (-23.9%)
  • Historical Big Money signals

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

But Upstart is a Big Money darling. Below are the Big Money Top 20 buy signals for UPST since it began trading:

Source: www.MAPsignals.com

Let’s look under the hood. Despite the price slide, Upstart earnings have rocketed, and they’re expected to keep growing:

  • 3-year EPS growth rate (+1,060.7%)
  • 2-year vs. 1-year EPS growth rate estimate (+38.9%)

Thermo Fisher Scientific Stock Analysis

Our last growth candidate is Thermo Fisher Scientific Inc. (TMO), a longtime player in the medical devices and life sciences arenas. Like most health care stocks, it’s been getting beaten up this year:

Check out these technicals:

  • 1-month performance (-11.0%)
  • Historical Big Money signals

TMO 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 pullback and could be an opportunity.

Source: www.MAPsignals.com

Now let’s look below the surface a bit. Earnings have been growing, it has a relatively inexpensive valuation (especially for a Big Money favorite), and there’s been solid sales growth too:

  • 3-year EPS growth rate (+40.8%)
  • Forward price-to-earnings ratio (25.5x)
  • 3-year sales growth rate (+17.6%)

Bottom Line and Explanatory Video

TTD, NKE, SBUX, UPST & TMO represent the top oversold stocks for April 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 NKE, SBUX & UPST in personal and managed accounts.

Contact:

https://mapsignals.com/contact/

Why Nike Stock Is Up By 4% Today

Key Insights

  • Nike earnings exceeded analyst estimates. 
  • The company’s gross margin increased despite supply chain problems. 
  • Nike stock may gain additional upside momentum in case demand for riskier assets continues to grow.

Nike Stock Rallies After Strong Earnings Report

Shares of Nike  gained strong upside momentum after the company released its fiscal third quarter earnings report. The company reported revenue of $10.9 billion and GAAP earnings of $0.87 per share, beating analyst estimates on both earnings and revenue.

The company noted that “NIKE Brand Digital business fueled growth, increasing by 22 percent […]”. Nike’s gross margin increased to 46.6% despite supply chain problems and rising inflation.

The report highlighted Nike’s ability to operate in the current market environment thanks to the success of its digital strategy and its strong brand. The market was happy with the strong earnings report, and Nike shares made an attempt to settle above the $139 level.

What’s Next For Nike Stock?

Analysts expect that Nike will report earnings of $3.65 per share in the current fiscal year and earnings of $4.65 per share in the next fiscal year, so the stock is trading at 29 forward P/E.

It should be noted that earnings estimates have been moving lower in recent weeks as analysts were worried about supply chain problems and the impact of rising inflation on consumers’ ability to purchase Nike products.

The earnings report indicated that Nike was able to show strong results in the current market environment, so earnings estimates may start to move higher in the upcoming weeks, which will be bullish for the stock.

The key question is whether the market is willing to pay about 30 forward P/E for an apparel company in the rising interest rate environment. At this point, it looks that Nike stock will have a good chance to gain additional upside momentum in case demand for riskier assets continues to increase despite geopolitical uncertainty and hawkish Fed.

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

Federal Reserve Meeting, War, New Lockdowns – What Drives Markets Now?

However, they still have a ways to go before being in positive territory for the year with the S&P 500 down -6.4%, the Dow down -4.4%, and the Nasdaq still sitting on a loss of -11.2%.

Federal Reserve meeting

With the long-awaited Federal Reserve March policy meeting out of the way, investors will now be listening closely for any clues regarding future policy moves from individual officials as they hit the speaking circuit this week.

Fed Chair Jerome Powell delivers remarks at the National Association for Business Economics today, then again on Wednesday at a summit hosted by the Bank for International Settlements. I should note, seven other Fed officials are scheduled to speak at various events this week.

Investors also remain focused on Ukraine war headlines where Russia’s assault seems to have stepped up in some areas. In fact, Russia has given Ukrainian forces a deadline of today to surrender control of the besieged port city of Mariupol, the scene of some of the heaviest fighting since Russia launched its invasion of Ukraine more than three weeks ago.

Ukrainian war

The eastern port city has been devastated by relentless shelling, with whole neighborhoods reduced to piles of rubble. Electricity, gas and water have been cut off and many remaining residents are without food. Ukraine’s armed forces said the situation was “difficult: there is famine in the city, street fights, people are trying to leave”. Some officials involved in ceasefire negotiations say the two sides have moved closer to an agreement, though they also said the same thing last week.

China’s top diplomat to Washington said his country is committed to de-escalating the war but global intelligence officials from the U.S. and EU continue to warn that China is considering military support to Russia. Shipments of U.S.-supplied weapons are supposed to be entering Ukraine within days, something Russia has vowed to disrupt and which would likely ratchet up tensions even further.

Obviously, it remains a very volatile and fluid situation and gaining accurate information is difficult as global powers keep their cards close to their chests. Interestingly, the Iran nuclear deal appears to again be a go as Russia has backed off some of its demands that had threatened to derail its revival. Negotiators now say they are “close” to a deal with some speculating it could come as soon as this week.

New lockdowns in China

This could put some nearby pressure on oil prices which have struggled a bit as of late thanks to worries about demand in China amid a wave of fresh Covid lockdowns.

China this weekend began relaxing some of the harshest restrictions in order to “minimize” disruptions but port backlogs are already happening. The Port of Shenzhen is said to have over +35 ships waiting to dock while outbound freight heading to the U.S. and other countries has slowed considerably due to numerous factory closures as well as a lack of trucks arriving as drivers face extreme travel restrictions.

Shenzhen includes the Yantian terminal, which handles about a quarter of all U.S.-bound shipments. Similar issues are being reported at other key ports, including Shanghai, the world’s largest. While this is likely to create more disruptions to the availability of some raw materials and other supplies, the upside is that it could allow U.S. ports to work through their own backlogs, particularly on the West coast.

ES ##-## (Daily) 2022_03_21 (2_22_07 AM)

SP500 overview

The accumulation and ADL are looking very good. With cyclical and seasonal bottoms coming soon, short-term sell-offs should be considered as buying opportunities. More strength should be expected if SP500 holds above 4600 – 4650 levels.

In conclusion

Today, there is nothing much of note on the economic data front but investors are anxious to hear from Nike, which announces earnings after markets close. The company’s fiscal third-quarter results will include the first two months of 2022 and provide some insights into how fallout from Russia’s war in Ukraine and the Covid lockdowns in China might be impacting multinationals. Nike’s forward guidance likely holds the most interest with investors particularly anxious about inventory flows for Nike as well as other companies with manufacturing operations in China.

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

Nike Headwinds Grow Ahead of Report

Dow component Nike Inc. (NKE) reports Q3 2022 results after Monday’s closing bell, with analysts looking for a profit of $0.71 per-share on $10.61 billion in revenue. If met, earnings-per-share (EPS) will mark a 21% profit decline compared to the same quarter last year. The stock rose 6.2% in December after beating Q2 top and bottom line estimates but turned south with other mega-cap stocks in January 2022 and has carved a 25% year-to-date loss.

Russia, China and MLB

A slow China rebound and chronic supply chain disruptions have impacted annual performance, along with political events that have reduced risk appetites for international growth stocks. Last week’s Major League Baseball settlement removed a major obstacle from the agenda but Nike just shut down the stores it owns and operates in Russia, eliminating another income source. It’s also halted online sales in the rogue state, walking away from rapid sales growth.

Credit Suisse analyst Michael Binetti reiterated an ‘Outperform’ rating and $160 price target this week while lowering quarterly and full year earnings estimates, As he notes, returns are being impacted by a “growing list of global macro factors (inventory shortages, Russia/Ukraine, new China lockdowns, and US/Europe consumer inflation)”. Jefferies analyst Randal Konik just cut his earnings estimates as well, warning clients about the “volatile macroeconomic backdrop”.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 18 ‘Buy’, 5 ‘Overweight’, 7 ‘Hold’, and 1 ‘Underweight’ recommendation. Price targets currently range from a low of $125 to a Street-high $199 while the stock is set to open Thursday’s session on top of the low target. This dismal placement highlights the failure of analysts to measure the long-term impact of adverse trends on a broad range of widely-held issues.

Nike cleared January 2020 resistance at 105.62 in August, entered a two-legged uptrend that ran out of steam near 175 in August 2021. A November breakout attempt failed, ahead of a steady downtick that completed a double top breakdown in February. This pattern yields a measured move target near 109, or about 16 points below Thursday’s opening print. 50-month and 200-week moving average support are closely aligned at that level, raising the stakes for bulls in coming weeks.

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. 

Mark Zuckerberg Touts Instagram NFTs at Media Event

Key Insights:

  • Instagram will allow NFT minting in the coming months.
  • Zuckerberg hopes Metaverse clothing can be tokenized.
  • A launch date was not mentioned, but it is likely to be “in the near term.”

Speaking at the South by Southwest (SXSW) event in Austin, Texas this week, Meta (FB) co-founder Mark Zuckerberg said they are working to bring NFTs to Instagram in “the near term.”

SXSW is one of the world’s premier events showcasing music, film, and interactive media.

Zuckerberg was tight-lipped about the specifics but did say that he hoped NFT minting would be made available on the social media platform in the coming months.

Instagram’s foray into the NFT scene was initially reported in December when CEO Adam Mosseri revealed that the social media giant was actively exploring the NFT space.

Minting NFTs on Instagram

Zuckerberg participated in a discussion on the Metaverse when he confirmed the speculation that they would be coming to the photo and video-sharing social networking service.

“We talked about stuff like NFTs and the ability, you know, long-term, I would hope that the clothing that your avatar is wearing in the Metaverse can be minted as an NFT, and you can take it between different places.”

He added that there was a “bunch of technical things” to work out, but nonfungibles will be coming to the platform soon.

NFTs provide a way to tokenize real-world things such as art, graphics, photos, and music while providing immutable proof of ownership on the blockchain.

In recent years, the industry has exploded, with daily sales surging into the hundreds of millions of dollars. According to industry tracker, Nonfungible.com, $28 million worth of NFTs were sold on March 15.

Launch Date Not Confirmed

The Meta boss did not confirm any launch dates or specifics but added:

“I’m not ready to announce exactly what that’s gonna be today, but, over the next several months, [people will have] the ability to bring some NFTs in, and hopefully over time be able to mint things within that environment.”

He did mention a greater focus on shopping, though, stating that most of the stuff he wears has probably been purchased through an ad on Instagram or Facebook.

An increasing number of high-profile companies such as Microsoft, Warner, Adidas, Nike, Marvel, and DC Comics have recently made investments and inroads into the NFT industry.

Coinbase Announces Plan to Launch NFT Marketplace

Key Insights:

  • Coinbase eyes a piece of the NFT marketplace pie.
  • The US-listed crypto firm plans to bring innovation to the NFT sector.
  • At launch, hundreds of NFT creators will bring content to Coinbase NFT.

Coinbase is a crypto exchange based in the US and listed on the NASDAQ. Supporting crypto trading, Coinbase is one of the world’s leading crypto exchanges, with a global presence.

Coinbase Plans a Move into the NFT Sector

Overnight, Coinbase took to Twitter, announcing the imminent launch of Coinbase NFT. Coinbase NFT is a peer-to-peer marketplace allowing users to discover, mint, purchase, and showcase NFTs.

According to the announcement, Coinbase NFT met with more than a hundred creators looking to expedite the launch of the NFT marketplace.

Competing with other NFT marketplaces, including OpenSea and LooksRare (LOOKS), Coinbase NFT will aim to provide a more collaborative environment by supporting interaction between platform users and creators.

Since first announcing the planned launch of Coinbase NFT in October 2021, more than 2.5 million people have reportedly joined the Coinbase NFT waitlist.

In late 2021, Coinbase CEO Brian Armstrong talked up the NFT sector, reportedly saying that Coinbase NFT could be more successful than its cryptocurrency business. When considering the Coinbase brand, other NFT marketplaces may face tough competition ahead.

With creators currently minting on other NFT marketplaces, it is likely for them to join the Coinbase NFT community for access to more than 2.5m waitlisted users.

Regulatory Landscape Should Favor Coinbase NFT

In recent months, NFTs have garnered greater regulatory scrutiny. Record trading volumes at the start of the year coincided with a marked increase in regulatory activity.

Several jurisdictions have raised concerns over NFTs and the need for greater regulatory oversight. Despite the increase in regulatory chatter, mainstream names have flooded into the virtual world.

Big industry names entering the NFT space come from the fashion, healthcare, music, sport, and retail sectors. Some of the biggest brands include Sony, Walmart, Victoria’s Secret, Nike, the NFL, the MLB, the NBA, and UFC fighting.

The heightened interest in NFTs, rising number of trademark applications, and its continued compliance with US laws should position Coinbase NFT as a market leader. Following news of KYC requirements for the next Bored Ape Yacht Club release, Coinbase will also have the appropriate infrastructure in place to hit the ground running should US regulators impose tighter measures to protect investors.

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.

Best ETFs to Buy for March 2022

When there’s huge buying and selling in the market, it’s usually unsustainable and coincides with peaks and troughs, especially over the past two years. It reminds me of investor overexuberance. There’s just too much excitement (either of the buying or selling variety), for such movements to be anything that will last.

Chart, histogram Description automatically generated
Source: www.mapsignals.com

Opportunistic investors can take advantage of these movements, especially when there’s deep selling. Those times have proven to be when stocks and ETFs are on sale. When zooming in to the last three months (below), we see lots of unsustainable selling. This could set up well for some discount buying that may serve long-term investors well.

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Source: www.mapsignals.com

Given these conditions, we’ve identified some ETFs we think have long-term potential, a few of which are priced nicely right now: RDVY, QUAL, IGV, IHI, and FDN.

Long-term investors should look for ETFs (and their stocks), with great setups. Remember, ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.

Let’s get to the five best ETF opportunities for March 2022.

#1 First Trust Rising Dividend Achievers ETF (RDVY)

This is a market rotation play as growth stocks are shed in favor of more predictable value-oriented companies that pay dividends. And while dividends are great and rising dividends are even better. RDVY holds some great companies that have histories of raising dividends. It’s likely why Big Money has been buying RDVY in chunks over the past year:

RDVY holds several solid stocks, including some big technology companies; one example is Activision Blizzard Inc. (ATVI), which has a 3-year EPS growth rate of 16.6%, but is still getting sold a lot. Here are Big Money signals for ATVI:

#2 iShares MSCI USA Quality Factor ETF (QUAL)

This one is all about quality. QUAL holds a basket of stocks with excellent fundamentals, many of which are household names. So, it’s not surprising that an ETF all about quality has performed well over the past few years. There were dips around October and February (red bars), but big dips have typically preceded big rises in this ETF:

One great stock QUAL holds is Nike, Inc. Class B (NKE). It’s a long-time Big Money favorite with fantastic fundamentals (3-year EPS growth of 67.2%). As the multi-year chart below shows, it’s been a growing giant for a while:

#3 iShares Expanded Tech-Software Sector ETF (IGV)

This high-flying ETF has seen Big Money buys for a long time, and it’s performed well. It holds some phenomenal stocks, many of which are outliers – the kind that of stocks that produce HUGE gains. But with the recent pullbacks, IGV can be considered a discount buy right now:

One of many big winners within IGV is Adobe Inc. (ADBE). It’s an outlier stock – it’s 3-year sales growth is an impressive 20.8% – and has been a Top 20 Big Money buy for years:

#4 iShares U.S. Medical Devices ETF (IHI)

This one is another on our hunt for bargains. By identifying weaker ETFs holding stocks with strong fundamentals, we can buy in a good spot. IHI was destroyed in January 2022, but not long before that was at peaks, likely because its stocks are phenomenal and medical devices markets remain strong:

One standout within this ETF is Thermo Fisher Scientific Inc. (TMO), a giant healthcare company high huge earnings growth (3-year EPS growth of 40.8%). The multi-year chart below shows lots of Big Money buying. And notice how sells appear to be discounts:

#5 First Trust Dow Jones Internet Index Fund (FDN)

This is another “bargain bin” pick, but that’s because this ETF is getting killed recently (unfairly in my opinion). FDN has seen Big Money buying in the past, but it’s dropped significant value since around last Still, it holds fantastic technology stocks, which makes the current price appetizing:

One great stock in FDN is Amazon.com Inc. (AMZN). It’s been stagnant lately, but Big Money has leaned on AMZN for a long time. Given the firm’s ubiquitous nature, growth vision, and huge performance (26.6% 3-year sales growth and 50% 3-year EPS growth). It wouldn’t surprise to see this one rise high again:

Here’s a Big Money recap:

  • When Big Money buying pours in, stocks tend to go up
  • Red selling on great quality can be a great opportunity
  • Repeated buying usually means outsized gains

Let’s summarize here:

Chart Description automatically generated with low confidence

RDVY and QUAL rank high. IGV, IHI, and FDN, however, rank lower on our list, due to weaker technicals. That’s why I think these weaker ETFs represent great potential bargains.

The Bottom Line

RDVY, QUAL, IGV, IHI, and FDN are my top ETFs for March 2022. These picks can rise higher, in my opinion, largely because they each hold great stocks. Some of them are discounted right now because of selling pressures. But as we know, deep red days often prove to be big opportunities over time.

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

Disclosure: the author holds no positions in RDVY, QUAL, IGV, IHI, FDN, ATVI, ADBE, TMO, or AMZN in managed or personal accounts at the time of publication; he holds long positions in NKE in managed accounts.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Victoria’s Secret Plans NFTs and Entry into the Metaverse

Mainstream corporate interest in NFTs and the Metaverse has continued going into February.

This is in spite of a sharp fall in NFT trading activity through the early part of February. NFT trading activity had hit an all-time high in January, with OpenSea leading the way.

Major Brands Continue to Go NFT and Metaverse

In recent weeks, a number of major brands and corporations have filed for NFT and Metaverse-related trademarks.

Last week, we reported Gucci’s LAND purchase in the Sandbox (SAND). Back in 2021, Gucci had already collaborated with Roblox to host the “Gucci Garden”. This was a virtual version of a real-world installation in Italy, offering themed rooms in commemoration of Gucci’s centenary.

Major brands have also been embracing non-fungible tokens (NFTs) in rising numbers.

Gucci was among the first luxury fashion houses to sell NFTs, with Louis Vuitton, Prada, and sports brands Adidas and Nike also active in the NFT space. The rise in interest has been so significant that Nike purchased digital collectibles and sneakers creator RTFKT last year.

With Gucci and the likes of McDonald’s and Warner Music Group entering the Metaverse, it was only a matter of time before fashion week took to the Metaverse. Last week, Vogue Business announced on Twitter a 4-day digital fashion week in Decentraland (MANA) commencing 24th March.

Global brands and visitors will be able to virtually experience fashion shows, attend live music sessions and the after-parties. Attendees can also buy and wear digital clothing directly from catwalk avatars.

Some of the digital catwalk collections can be redeemed to receive the brand’s physical pieces. Buyers will need an Ethereum (ETH) wallet to purchase clothing.

Following last week’s news, beauty and lingerie powerhouse Victoria’s Secret joins the growing list of leading brands to enter the Metaverse.

Victoria’s Secret Plans Metaverse Debut

On Sunday, Mike Kondoudis, a trademark attorney, announced on Twitter trademark applications made by Victoria’s Secret.

According to Kondoudis, Victoria’s Secret “plans to offer digital collectibles and media created with blockchain tech and online clothing and media for use in virtual environments”. Victoria’s Secret filed the applications on 8th February.

The Sandbox Price Action

On Sunday, SAND slid by 3.79% to end the day at $4.06. Risk aversion stemming from the rising risk of Russia invading Ukraine weighed on SAND and the broader crypto market.

At the time of writing, SAND was down by 3.59% to $3.916. A move through February’s high $4.87 would bring January’s high $6.03 into play. SAND would need plenty of support from the broader market, however, for a breakout from $5.00 levels.

A move back through to $6.00 levels would then give SAND a clear run at November’s ATH $8.48. Breaking down resistance at $7.00 would be key, however. Geopolitical risks will need to subside to support the more bullish SAND price predictions.

SANDUSD 140222

Why Peloton Stock Is Up By 20% Today

Peloton Stock Rallies On Takeover Reports

Shares of Peloton  rallied after a WSJ report indicated that Amazon was thinking about buying the company, while a FT report highlighted Nike as another potential bidder. Apple has also been mentioned by analysts as a potential suitor.

Peloton stock is down by more than 80% from its highs that were reached back in 2022, and a potential deal looks like a way out of the current situation.

The market doubts whether the company will be able to grow at a healthy pace after its initial success. The potential acquisition makes strategic sense for Peloton as support from one of the world’s leading companies can boost its business.

What’s Next For Peloton Stock?

Analysts expect that Petloton will report a loss of $2.91 per share in the current fiscal year and a loss of $1.03 per share in the next fiscal year, but traders will likely ignore financial forecasts in the upcoming trading sessions and focus on the potential competition between suitors.

Adding to volatility, Peloton is set to release its second quarter fiscal 2022 results on February 8, after the market close. In case the company fails to reach a deal before the release of the earnings report, it will not provide commentary on the recent rumors.

The key question for traders is whether potential suitors are ready to pay a material premium for Peloton stock. Sometimes, this premium is not that big, as higlighted by today’s deal between Frontier and Spirit Airlines (SPR is up by just 14% in today’s trading session).

In case the big companies are highly interested in buying Peloton, the company’s stock may move higher as competition between bidders intensifies and more rumors emerge. However, traders should be careful as no deal is guaranteed, and suitors may have the intention to grab Peloton on the cheap due to the company’s recent problems.

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

Art NFTs Pop Up on the U.S Treasury Radar

Illicit activity on the NFT marketplace has been on the rise at the turn of the year. A surge in trading volumes to record highs has attracted bad actors into the space.

Illicit Activity Puts NFTs on Watch

Early last week, we reported on NFT marketplace HitPiece selling music NFTs without the knowledge of the artists. To make matters worse, HitPiece also reportedly created NFTs of music without the consent of artists. HitPiece founders had created the marketplace to support music artists and provide a platform through which artists could receive royalties.

HitPiece is not the only market place, however, that has drawn criticism. Overnight on Thursday, Nike reportedly filed a claim against online reseller StockX for trademark infringement. StockX has been selling Nike sneaker NFTs since January. At the time of writing, a sneaker collection titled “The Vault” had 8 Nike Vault NFTs on sale and 1 Adidas NFT. Nike filed the lawsuit as it prepares to launch its own NFT sneaker collection after having bought virtual sneaker maker RTFKT late last year.

With NFT marketplaces such as OpenSea also seeing a spike in illegal activity, governments and regulators have started looking beyond Bitcoin mining and crypto taxation.

Regulators Take a Closer Look at NFTs

In January, the Indian government set up a FINTEC division to monitor cryptos, crypto launches, and NFTs. The move followed calls by the Bank of England for a global crypto regulatory framework, which was echoed by the IMF.

With the China’s central bank, the People’s Bank of China, having also raised concerns over NTFs, UK government MPs recently called out for greater regulatory scrutiny.

The U.S government was not far behind, with the White House announcing the imminent release of an Executive Action. According to the announcement, agencies will need to take a closer look at cryptos, crypto mining, and NFTs. In the interest of national security, the order will reportedly call on agencies to work closely with regulators around the world. Such a move could form a blueprint of a global crypto regulatory framework.

U.S Treasury Talks NFTs

While the crypto market awaits the White House Executive Action, the U.S Treasury issued a press release on NFTs and art theft going into the weekend.

Salient points from the press release included:

  • We look at what else might be needed to address money laundering risks specific to other industries”. Other industries included the art industry.
  • Platforms with high annual sales turnover and frequent trading in high-value art present a higher risk of money laundering.
  • “NFTs may present new risks, depending on the structure and market incentives”.

The Treasury recommended the following regulatory and non-regulatory options:

  • Encourage private sector information-sharing programs to create a more transparent arts market.
  • Train law and customs enforcement and asset recovery agencies with updated guidance.
  • FinCEN recordkeeping authorities to support information assimilation and improved due diligence.
  • Apply AML/CFT requirements to art market participants and / or obligate them to create and maintain AML/CFT.

Considering the U.S Treasuries recommendations, a regulatory framework and the implementation of AML/CFT requirements by NFT marketplaces could not only reduce the risk of money laundering but also illicit activity that continues to plague the NFT marketplace.

Nike Sues Online Reseller StockX for Trademark Infringement

NFT marketplace activity has surged at the turn of the year, with trading volumes hitting record highs. While volumes have surged, however, news of illegal activity across the NFT space has also drawn attention.

Illicit Activity in the NFT Marketplace Is on the Rise

Earlier this week, news hit the wires of the NFT marketplace HitPiece selling NFTs without the knowledge of the artists.

More significantly, HitPiece also reportedly created NFTs of music without the consent of artists. HitPiece is an NFT marketplace designed to be “the place for music NFTs online”. Artists would receive royalties from the initial sales of NFTs and also from ongoing trading of the NFTs.

The news followed a number of exploits that have hit the leading NFT marketplace OpenSea in recent months. Early in the week, news had hit the wires of a sharp increase in scams and thefts on the NFT marketplace. For the NFT marketplace, the rise in the number of scams and bad actors has raised concerns amongst lawmakers amidst surging trading volumes.

NIKE Sues StockX

Overnight, news hit the wires of Nike suing online reseller StockX for trademark infringement. StockX has reportedly been selling Nike sneaker NFTs since January. The sneaker collection on sale is called “The Vault”.

 

At the time of writing, there were 8 Nike Vault NFTs on sale and 1 Adidas NFT.

Within the lawsuit, Nike reportedly claimed that StockX has sold more than 500 Nike-branded NFTs that will have also confused customers. The lawsuit goes further by reportedly stating that complaints about “inflated prices and unclear terms of purchase and ownership and buyers’ doubts about the legitimacy of StockX’s model have impacted Nike’s business reputation”.

Late last year, Nike bought virtual sneaker maker RTFKT in a bid to expand its footprint into the Metaverse.

The Nike lawsuit isn’t the first and will unlikely be the last as the NFT market grows.