Direct Cryptocurrency Payments Will Serve as a Boost for the Financial Industry

According to research conducted by the Capgemini Research Institute, nearly 45% of customers around the world will use cryptocurrencies for payments within the next 1-2 years, due to the growing need for cross-border payments. At the moment, less than 10% of global consumers use cryptocurrencies for payments.

While the legal status of cryptocurrencies varies from country to country, the fact that they can be recognized as legal tender (as El Salvador’s example demonstrates) shows that there is a place for them to be found in payments and that people can also use them to conduct their purchases.

While Bitcoin is not the best crypto asset for payments going forward, there are other options available which can be used for payments. Assets with lightning-quick transaction speeds, like Ripple, Solana, EOS, Neo, Cardano and Ethereum (following the rollout of Ethereum 2.0), for example.

Advantages of crypto payments

We have already seen El Salvador implement Bitcoin as a legal tender. Its advantages include censorship-resistance, quick and cheap payments and an anti-inflationary system. Only time will tell if El Salvador’s move bears fruit. If it does, we could see other countries follow suit. It must be noted that Bitcoin’s initial goal was to be used for payments – its current appeal is more as an investment instrument but this could soon change.

When it comes to payments, efficiency is a priority. A cross-border payment in crypto can take minutes, or even seconds to clear – as opposed to several days of clearance time (potentially) with fiat transfers. Currently, payments platforms and financial institutions charge colossal fees for international transactions and take significant time to process.

In today’s increasingly digital age, speed is of the essence when it comes to the completion of any task, of course in a streamlined manner. Needless to say, the integration of crypto assets into global finance will make local and international payments easy. Also, functionalities can be built into crypto transactions in the form of smart contracts.

For example, you could send pocket money to your child who is studying overseas and program the money to not be spent on junk food. Automation of payments based on pre-fixed conditions is also a possibility. Of course, the security that comes with blockchain technology is another advantage of incorporating crypto payments globally.

With a market cap of $2.5 trillion at the time of writing, crypto tokens have become an asset class in their own right, and the gap between the crypto and fiat spheres is gradually closing.

What is the future for this sector?

We are approaching a future where cross-border payments can be completed with a single, quick crypto transaction. The real benefit of crypto payments is being able to use cryptocurrencies in our day-to-day lives. While receiving payment in crypto and converting to fiat is still a quick process, the fees get piled on – convenience and savings hold key importance here.

The future for this sector is indeed bright but we need businesses all over the world to accept crypto payments to harness their true potential. We need a digital world where crypto payments for all kinds of goods can be made with a single click. At the moment, over 15,000 businesses globally accept crypto payments. These include Microsoft, PayPal, Overstock, Whole Foods, Etsy, Starbucks, McDonald’s, Newegg, Home Depot, Rakuten and Twitch – the list goes on.

Once crypto payments become mainstream, I expect players in the industry to build infrastructure to add to the capabilities of crypto assets and facilitate direct crypto payments as I mentioned in the previous section. CBDCs are a way forward as well and will slowly but surely transform global finance.

The lack of regulation is a hindrance to growth at this moment and the adoption of CBDCs could see cryptocurrencies gain more importance and traction rapidly. Many countries do not have taxation rules in place at the moment and do not know how to treat crypto assets. And since they cannot understand crypto assets, they refuse to acknowledge their importance.

This is why I feel 2022 could be a turning point for the crypto industry in terms of global finance, with CBDCs likely to receive a huge global push. China is leading the way at the moment and countries like the UK and India are not too far behind.

Conclusion

The crypto industry will continue to develop and the demand for crypto assets will rise. Global crypto adoption for payments will not only add ease to cross-border payments at low costs but also allow us access to programmable and automatable payments.

China will play a leading role in global crypto infrastructure in the near future, owing to its progress with CBDC technology. The growth of India as a crypto-using nation is heartening to see as well – India has the most active crypto users at the time of writing.

Financial institutions are seeing cryptocurrencies in brighter light and their acceptance of digital currencies is key to the future growth of the industry. In the end, the goal is not to eradicate traditional finance but enhance it.

Greg Waisman, co-founder and COO of the global payments network Mercuryo.

Best Growth Stocks October 2021

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are NFLX, PYPL, UPST, ASML, & TSLA.

For MAPsignals, we believe that Big Money trading can alert you to the forward fundamental picture of a stock. We want the odds on our side when looking for the highest quality stocks.

Up first is Netflix, Inc. (NFLX), which is the leader in on-demand video.

Strong growth candidates tend to have strong performance. Check out NFLX:

  • YTD performance (+16.68%)
  • Historical big money signals

Just to show you what our Big Money signal looks like, have a look at the top buy signals Netflix has made the past few years.

Blue bars are showing that NFLX was likely being bought by a Big Money player according to MAPsignals.

When you see a lot of them, I call it the stairway to heaven:

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Source: www.MAPsignals.com

But, what about fundamentals? As you can see, Netflix’s revenue numbers have been strong:

  • 3-year sales growth rate (+28.9%)
  • 3-year earnings growth rate (+71.92%)

Next up is PayPal Holdings, Inc. (PYPL), which is a leading digital payments firm.

Check out these technicals for PYPL:

  • YTD performance (+25.2%)
  • Historical big money signals

Let’s look long-term. These are the top buy signals PayPal has made since 2015. Clearly the Big Money has been consistent for years:

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Source: www.MAPsignals.com

Let’s look under the hood. As you can see, PayPal has grown revenues massively:

  • 3-year sales growth rate = +17.96%
  • 3-year earnings growth rate = +36.06%

Another growth name is Upstart, Inc. (UPST), which is a lending platform.

Strong candidates for growth usually have big money buying the shares. Upstart has that. Also, the stock has been a rocket:

  • YTD performance (+544%)
  • Recent Big Money signals

Below are the big money signals Upstart has made since 2019. It’s a newer listing with mega juice!

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Source: www.MAPsignals.com

Now let’s look under the hood. Upstart’s sales growth is impressive. I expect more growth in the coming years:

  • 3-year sales growth rate = +60.28%
  • 3-year earnings growth rate = +18.32%

Number 4 on the list is ASML Holding NV ADR (ASML), which is a huge semiconductor firm.

Here are the technicals important to me:

  • YTD performance (+77.2%)
  • Historical big money signals

Below are the big money signals for ASML since 2015:

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Source: www.MAPsignals.com

Let’s look under the hood. ASML has been growing nicely:

  • 3-year sales growth rate = +16.45%
  • 3-year earnings growth rate = +21.9%

Our last growth candidate is Tesla, Inc. (TSLA), which is the leader in the EV space.

Check out these technicals:

  • YTD performance (+6.7%)
  • Historical big money signals

Tesla is just now starting to crank with strong fundamentals, that’s why there’s few Big Money signals:

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Source: www.MAPsignals.com

Now look at these juicy growth numbers:

  • 3-year sales growth rate = +41.78%
  • 3-year earnings growth rate = +33.26%

The Bottom Line

NFLX, PYPL, UPST, ASML, & TSLA represent top growth stocks for October 2021. Strong fundamentals and big money buy signals make these stocks worthy of extra attention.

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

Disclosure: the author holds long positions in NFLX, PYPL, & TSLA in personal accounts and long positions in NFLX, PYPL, & UPST in managed accounts. He holds no positions in ASML at the time of publication.

Investment Research Disclaimer

Robinhood Takes Aim at Rival With New Payment Feature

Commission-free trading app Robinhood Markets is gearing up to face some new competition now that PayPal wants to jump into the brokerage fray. PayPal is entering Robinhood’s turf, and now the brokerage app wants to return the favor.

Robinhood is readying the introduction of a new payment feature that will make it easier and faster for users to access their hard-earned income. According to a report in Bloomberg, Robinhood will introduce a direct deposit feature through which customers can gain access to their paycheck two days before it would otherwise hit the bank account.

Early Direct Deposit

The new product builds on Robinhood’s existing direct deposit feature, only this one is called Early Direct Deposit. It will have perks such as zero fees, in lockstep with Robinhood’s trading anthem, and of course the early arrival of funds. The new feature remains in the beta stage and the code appears to be built into a future update for the company’s iPhone app.

The Bloomberg article cites a message that will appear inside the app saying:

“Now you can get paid up to two days early. Because eligibility depends on your employer, we’ll let you know if you can get paid early on your next pay cycle.”

By taking on this role, Robinhood will be handling even more sensitive information for users and as a result, plans to bolster its cybersecurity in the interim.

Competitive Landscape

Robinhood is taking a direct hit at PayPal, which similarly offers U.S. users a direct deposit service. As it turns out, PayPal also offers select customers the opportunity to access their pay two days early.

Robinhood will also be going head-to-head with the likes of Wealthfront, an investment service that similarly supports direct deposit, as does fintech company Chime.

Investors rewarded Robinhood for its competitive nature, with the stock up modestly on the heels of a difficult start to the week.

On Tuesday, U.S. SEC Chairman Gary Gensler revealed that the securities regulator is considering a “ban of payment for order flow,” according to Barron’s. Robinhood is among the brokers that rely on this feature to generate revenue.

PayPal Looks to Enter the Stock Trading App Fray

Payments platform PayPal has been in expansion mode this year, and it is bolstering its profile in the fintech space in the interim. First, the company rolled out cryptocurrency trading in the U.S., followed by an international expansion push into the U.K. Apparently, PayPal isn’t done and now it wants to compete with the likes of trading app Robinhood.

According to a report on CNBC, PayPal is eyeing the launch of an equities trading platform. The company got the idea after customer demand for its cryptocurrency offering went through the roof. PayPal has seen the attention around commission-free trading app Robinhood, and management might think that it could do a better job for investors.

A PayPal brokerage could be more than just a glimmer in the eye of CEO Dan Schulman. The company has already tapped regulated brokerage Ally Invest alum, Richard Hagen, to spearhead its Invest at PayPal division. Hagen would be the logical choice to spearhead the brokerage app if PayPal takes the plunge into stock trading. His LinkedIn profile states that his role is to “explore opportunities in the consumer investment business.”

Competitive Landscape

If PayPal moves forward with the app, it will happen in 2022 and it would be geared toward U.S. users to start. PayPal would be entering the fray with the likes of Robinhood in addition to SoFi and Square’s Cash App.

For its part, Robinhood has come under fire this year after getting on the bad side of retail investors during the height of the meme stock craze. Robinhood is a popular app for individual investors. When these investors were able to turn the table on sophisticated traders in GameStop’s stock, Robinhood caved to the institutions and halted trading in the stock. PayPal must see an opening to take market share from the somewhat tarnished Robinhood brand.

PayPal’s Stock

Shares of PayPal rallied on the news, climbing nearly 4% higher. Year-to-date, PayPal’s value has ballooned by nearly 25% as investors have rewarded the company for its crypto-related moves.

If today’s trading is any indication, PayPal could give Robinhood a run for its money.  While PayPal’s stock rallied, Robinhood’s fell nearly 7%.

S&P, Nasdaq End at Record Highs as Dovish Fed Taper-Talk Calms Investors

Apple Inc jumped to an all-time high, while Microsoft Corp, Amazon.com, Google-owner Alphabet Inc all rose, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.

High-growth tech stocks tend to benefit from expectations of lower rates because their value rests heavily on future earnings.

The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging COVID-19 cases.

Fed Chair Jerome Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemic-era stimulus, while reaffirming a steady economic recovery.

“It’s now clear that there’s going to still be an extraordinary amount of support for this economy, probably until November,” said Ed Moya, senior market analyst for the Americas at OANDA.

“Some investors are thinking that tapering might not even start this year, but the one thing that everyone can agree on is that Chair Powell has signaled they are in no rush to raise interest rates and he’s disconnected tapering with rate-hike timing.”

The S&P 500 has risen more than 3% so far in August – a seasonally weak period for stocks – and Wells Fargo analysts said last week they expect the index to rise another 8% by the end of the year.

It is also on track to log one of its best year-to-date returns through August of the past six decades, said Chris Larkin, managing director of trading at E*Trade Financial.

Unofficially, the Dow Jones Industrial Average fell 55.96 points, or 0.16%, to 35,399.84, the S&P 500 gained 19.39 points, or 0.43%, to 4,528.76 and the Nasdaq Composite added 136.22 points, or 0.9%, to 15,265.72.

While U.S. crude prices rose 0.7% on Monday, energy stocks broadly slipped as investors fretted about possible longer-term impacts to offshore oil production and damage to energy infrastructure from Hurricane Ida, which roared ashore on Sunday near Port Fourchon, Louisiana, a major hub for the U.S. offshore oil industry.

Falling bond yields also pressured bank stocks, with the S&P 500 banking index ending down.

PayPal Holdings Inc advanced on a CNBC report that the financial services firm was exploring the development of a stocks trading platform for its U.S. customers. The news helped push Robinhood Markets Inc down.

U.S.-listed shares of Chinese gaming firm NetEase Inc slumped as Chinese regulators slashed the amount of time players under the age of 18 can spend on online games to an hour on Fridays, weekends and holidays.

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

(Reporting by Shashank Nayar in Bengaluru and David French in New York; Editing by Arun Koyyur and Lisa Shumaker)

Best Stocks to Buy Now September 2021

The hard part is finding them.

At MAPsignals, that’s where we focus.

And this month we look at my best stocks to buy now for September 2021. Keep in mind, I like to use a lot of data in my process and this isn’t personalized advice.

But let’s touch on the market first. The big indexes are chugging higher but are largely being propped up by a handful of the biggest stocks. The data under the surface is deteriorating quickly. The Big Money Index is falling rapidly indicating more sellers than buyers. It’s often a leading indicator, so recent weakness isn’t surprising.

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Pullbacks are part of the game. In fact, that’s an opportunity for long-term investors. Patience is the key to investing.

For MAPsignals, we focus on Big Money buying the best stocks. We find that oftentimes how a stock trades can alert you to the forward fundamental picture more than just looking at a company’s financials. I like the odds in my favor when looking for the highest quality stocks.

Up first is Thermo Fisher Scientific Inc. (TMO), which is a leading medical devices company. They have been trucking higher for years.

When we decide on the strongest candidate for long-term growth, we consider many fundamental and technical considerations.

Here we see great 1 and 3-year sales and earnings growth. We also see a hefty profit margin. Just for fun, juice is good, so-so is ok, and not ideal is underwhelming:

Source: MAPsignals, FactSet

To see if Big Money is plowing in, we can look at the MAPsignals Top 20 charts. Below are all the top buy signals TMO has made the past few years. Blue bars are showing that Thermo Fischer was likely being bought by a Big Money player according to MAPsignals.

When we see a lot of blue signals, we call it the stairway to heaven:

Source: MAPsignals.com

Next up is Intuitive Surgical, Inc. (ISRG), which is a leading surgical robotics maker. Imagine being a surgeon in one country operating in a patient in another! This company makes it theoretically possible.

Let’s take a peek under the hood:

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Source: MAPsignals, FactSet

While the stock has outperformed recently, look at the long-term picture. These are the top buy signals ISRG has made since 2015. Clearly the Big Money has been into it for years:

Source: MAPsignals.com

Another growth name to consider is Activision Blizzard, Inc. (ATVI). The video game maker has seen negative press regarding work culture and other assorted stories. But it doesn’t change the monster business they do.

Looking at the fundamental picture we see a strong history of 1 and 3-year sales and earnings growth and a chunky profit margin:

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Source: MAPsignals, FactSet

Below are the big money signals Activision has made since 2015. This stock has been a magnet for Big Money with one notable rough patch. Clearly, they turned it around and have been in a strong long-term uptrend:

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Source: MAPsignals.com

Number 4 on the list is Generac Holdings Inc. (GNRC), which is an industrials leader making electrical products such as their popular home generators. The shares have been in juice-mode for years.

Check out the fundamental picture. For GNRC we see growing sales and earnings:

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Source: MAPsignals, FactSet

Below are the big money signals that GNRC has made since 2015. Notice that it’s only recently come to Big Money attention in late 2019:

Source: MAPsignals.com

Our last growth powerhouse is PayPal Holdings Inc (PYPL), which is a specialty finance company focusing on digital payments.

This company boasts strong fundamentals with great 1 and 3-year sales and earnings growth. A gross profit margin of 55% is awesome.

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Source: MAPsignals, FactSet

Below are the big money signals PayPal has made since 2016. You can see how powerful the performance has been:

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Source: MAPsignals.com

The Bottom Line

TMO, ISRG, ATVI, GNRC, & PYPL represent my best stocks to buy now for September 2021. Given the strong historical revenue & earnings growth, and multiple big money buy signals, these stocks could be worth extra attention, especially if they pull back with a likely pending sell-off in the market.

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

Disclosure: the author holds long positions in PYPL in personal and managed accounts. He holds no positions in TMO, ISRG, GNRC, or ATVI at the time of publication.

Investment Research Disclaimer

Square Trading Sharply Lower After Acquisition News

Square Inc. (SQ) is trading lower by nearly 5% in Monday’s pre-market after missing Q2 2021 revenue estimates and announcing the acquisition of Australian fintech provider Afterpay Ltd. for $29 billion. The San Francisco-based payment processor earned $0.66 per-share during the quarter, $0.35 better than expectations, while revenue rose 143.3% year-over-year to $4.68 billion, nearly $400 million lower than consensus.

Revenue Shortfall Sours Bullish Sentiment

The company hopes the Allpay acquisition will accelerate “strategic priorities for its Seller and Cash App ecosystems”. The all-stock deal is expected to close in the first quarter of calendar year 2022, indicating that a secondary offering will be needed to cover the purchase. Square predicts the transaction will be “accretive to gross profit growth with a modest decrease in Adjusted EBITDA markets expected in the first year after completion of the transaction”.

The sell-the-news reaction reveals shareholder anxiety about Square’s long-term growth trajectory. The acquisition will dilute current shares, requiring an equal uptick in income that isn’t guaranteed, given complex integration issues. Even so, the revenue shortfall is a bigger deal because, as PayPal, Inc. (PYPL) and Amazon.com Inc. (AMZN) underscored last week, 2020 COVID beneficiaries are having a harder time maintaining growth as quarterly metrics revert to historical norms.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating after 2020’s phenomenal 347% return, consisting of 24 ‘Buy’, 1 ‘Overweight’, 15 ‘Hold’, and 1 ‘Underweight’ recommendation. In addition, one analyst recommends that shareholders close positions and move to the sidelines. Price targets currently range from a low of $175 to a Street-high $380 while the stock is set to open Monday’s session more than $40 below the median $281 target. This humble placement suggests that Main Street is worried about post-COVID growth.

Square broke out above the 2018 high at 101.15 in June 2020 and took off in a powerful trend advance that posted an all-time high at 283.19 in February 2021. A rapid decline to 191 set the lower boundary of a trading range that has remained intact for the last five months. Price action has improved since a successful support test in May but the stock is now stuck near the dead center of the sideways pattern, likely months away from a sustained breakout or breakdown.

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

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

Why PayPal Stock Is Down By 5% Today

PayPal Stock Dives As Q3 Guidance Disappoints

Shares of PayPal found themselves under significant pressure after the company reported its second-quarter results. PayPal reported revenue of $6.24 billion and GAAP earnings of $1.00 per share, missing analyst estimates on revenue and beating them on earnings.

The company stated that the number of total active accounts exceeded 400 million in Q2 2021, and PayPal processed 4.7 billion payment transactions. PayPal also noted that it repurchased 765,000 shares of its common stock during the quarter.

While second-quarter results were good and the company’s earnings exceeded analyst estimates, the market focused on PayPal’s guidance for the third quarter.

In Q3 2021, PayPal expects to report revenue of $6.15 billion – $6.24 billion and GAAP earnings of $0.68 per share. The main problem for PayPal in the near term is that eBay Marketplace is moving away from PayPal, which hurts guidance.

What’s Next For PayPal Stock?

PayPal stock suffered due to disappointing Q3 2021 guidance, but traders should keep in mind that the negative impact from eBay’s move will be temporary as PayPal’s core business continues to grow.

The pandemic accelerated the shift to digital payments and allowed PayPal to grow its revenue by 19% in the second quarter.

Analysts expect that PayPal will report adjusted earnings of $4.73 per share in 2021, while the company’s own guidance is $4.70 per share. In 2022, PayPal’s profit is projected to grow to $5.89 per share, so the stock is trading at almost 50 forward P/E.

Such multiples are common for high-growth stocks in today’s market environment as traders are ready to pay premium for companies that benefit from trends which were boosted by the pandemic.

Some analysts have even rushed to upgrade PayPal despite the company’s soft Q3 guidance, and the stock has already recovered some of its earlier losses. S&P 500 is currently testing new all-time high levels, and the general market sentiment is very bullish. In this environment, PayPal stock has a good chance to move back to recent highs as its core business growth remains strong.

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

A Profit Warning Knocks PayPal Down Like a Rock

PayPal Holdings Inc. (PYPL), one of 2020’s hottest stocks, is trading lower by more than 9% in Thursday’s pre-market after issuing downside profit guidance for the third quarter and full year. The digital payments juggernaut beat Q2 earnings-per share (EPS) estimates by just $0.03, posting a profit of $1.16, while revenue rose 18.6% year-over-year to $6.24 billion, just missing $6.27 billion consensus. Total payment volume during the quarter grew 40%, or 36% on a currency neutral basis.

Pandemic Hangover

The company boasts a 55.7 price-to-earnings ratio (P/E), higher than American Express Co. (AXP) but on par with Visa Inc. (V) and MasterCard Inc. (MA). The weak outlook exposes vulnerability to a pandemic ‘hangover’ that many 2020 beneficiaries have reported in their quarterly results. Simply stated, the rapid transition into digital payments, streaming services, and at-home food delivery yielded a one-time cash influx that’s now reverting to historical performance.

The selloff comes just three business days before PayPal raises rates for many merchant accounts. Originally announced in June, the news triggered a strong rally into July but Q3 and full year profit warnings suggest the company miscalculated and now expects to lose customers. It may also have underestimated the growing number of choices in the digital payment space, heralding an era in which it will need to compete more forcefully for market share.

Wall Street and Technical Outlook

Wall Street has been wildly bullish on PayPal for months, holding like glue to a ‘Buy’ rating now based upon 35 ‘Buy’, 5 ‘Overweight’, 6 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $250 to a Street-high $375 while the stock is set to open Thursday’s session more than $50 below the median $330 target. A quick uptick into the median price seems unlikely, given weak guidance, because it would require breaking out to a new high.

PayPal posted a phenomenal 219% return in 2020 and continued to book upside into the February 2021 high at 309.14. A decline into March found support in the 220s while the bounce into July mounted the first quarter peak by less than one point ahead of this morning’s selloff. The reversal reinforces resistance above 300 while setting up a test of 50-day moving average support at 285. A breakdown is possible given downside momentum, exposing an unpleasant trip to the March low.

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

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

Today’s Market Wrap Up and a Glimpse Into Thursday

Stocks finished the day mixed after the Fed revealed that the economy is on track for employment and inflation. The Dow Jones Industrial Average and S&P 500 were each down fractionally, while the tech-heavy Nasdaq added 100 points to end modestly higher.

As the economy continues on the path to recovery, the Fed tipped its hand, saying it would begin to pull back from its asset purchasing activity. The major indices still remain close to all-time high levels.

One winner in the Dow was Boeing, which surprised Wall Street by swinging to a profit for the first time almost in two years.

Stocks to Watch

The tech earnings parade rolled on, with Facebook taking the spotlight today. Mark Zuckerberg’s company sees 3.51 billion people flock to its platforms,  including Facebook, Instagram, Messenger and Whatsapp, each month, up 12% YoY.

Facebook’s Q2 revenue came in at USD 29.08 billion, continuing a trend that Google, Microsoft and Apple similarly experienced in the quarter. While Facebook’s Q2 results topped Wall Street’s estimates, revenue growth is not expected to be sustained at these levels, the company warned.

PayPal bucked the positive trend in corporate America after its Q2 results disappointed. Worse, the payments company isn’t expecting things to get much better for Q3. Investors punished the stock in extended hours, sending shares lower by about 6%.

Ford shares found a reason to rally thanks to a stronger than expected Q2 in which the company was profitable. The automaker lifted its Q3 forecast on the heels of robust demand for its Ford Bronco SUV.

Shares of cannabis company Tilray climbed more than 25% in the wake of a profitable fiscal Q4. Tilray CEO Irwin Simon sees a world in which marijuana will become legalized at the federal level in the U.S. in the next 18-24 months.

Look Ahead

On Thursday, an advance look at GDP comes out at 8:30 a.m. ET. Wells Fargo economists predict that the economy grew at an annualized pace of 9.1% in the quarter. The economy has come a long way since last year’s pandemic-fueled contraction, which lasted for two months. The economists forecast that consumer spending and business investments were strong in Q2, while supply chain constraints persisted.

Amazon’s earnings come out on Thursday. Bitcoin investors might be listening to the call to hear if the company addresses the recent crypto-related drama.

PayPal to Research Blocking Transactions That Fund Hate Groups, Extremists

By Anna Irrera

The initiative will be led through ADL’s Center on Extremism, and will focus on uncovering and disrupting the financial flows supporting white supremacist and anti-government organizations.

It will also look at networks spreading and profiting from antisemitism, Islamophobia, racism, anti-immigrant, anti-Black, anti-Hispanic and anti-Asian bigotry.

The information collected through the initiatives will be shared with other firms in the financial industry, law enforcement and policymakers, PayPal said.

Over the years, the San Jose, California-based company has developed sophisticated systems to help prevent illegal activity and flows through its platform. It hopes to have a positive social impact by sharing some of its capabilities, Aaron Karczmer, PayPal’s chief risk officer and executive vice president, risk and platforms said.

“We’re hoping to have impact on fighting hatred and extremism, which sadly seems to be surging in society across the globe,” Karczmer said in an interview. “As the son of a Holocaust survivor I know all too well the real world impact that come from hatred and extremist groups.”

In 2020, PayPal teamed up with criminologists and academics to research the payment systems used in the trafficking of illegal firearms and has partnerships with non-profit group Polaris to combat human trafficking through a joint Financial Intelligence Unit.

Over the past several years, PayPal has also been taking action against businesses peddling extremism that were attempting to use its platforms.

As part of the new initiative, PayPal and ADL will also work with other civil rights organizations, including the League of United Latin American Citizens.

“We have a unique opportunity to further understand how hate spreads and develop key insights that will inform the efforts of the financial industry, law enforcement, and our communities in mitigating extremist threats,” said Jonathan Greenblatt, ADL’s CEO.

(Reporting by Anna Irrera; Editing by Mark Potter)

Jack Dorsey’s Square Targets Bitcoin Network for DeFi

When the bitcoin price is in a downturn, developers tend to focus more on building. That seems to be the case in the latest market cycle, with companies like Square and PayPal both focused on bitcoin. Both companies happened to announce their latest developments at about the same time. Square’s stock is moving higher today while PayPal shares have barely budged.

Square’s Decentralized Push

Square generated USD 4.5 billion in bitcoin revenue last year on its Cash App. Jack Dorsey’s company is already behind Square Crypto, which is dedicated to building and funding open-source Bitcoin projects that support BTC for payments. Now Dorsey has announced a new initiative to create an open developer platform that paves the way for decentralized financial (DeFi) services on Bitcoin.

DeFi is a burgeoning niche in the cryptocurrency industry that gives users the ability to generate passive income through activities such as staking and lending. It also gives people who are either unbanked or underbanked access to financial services that they otherwise would not receive.

Ethereum is currently the go-to platform for decentralized finance. That is the blockchain on which most decentralized applications (Dapps) are built. Ethereum is a natural fit given its use of smart contracts that take the place of third parties such as banks.

Now Dorsey apparently wants to muscle Bitcoin into the DeFi fray. There is currently USD 54 billion in total value locked (TVL) in DeFi, and Dorsey seemingly believes Bitcoin should capture more of it. Square has named Mike Brock to lead the business, which has yet to be named. The work on the project will all be transparent and open-source in the spirit of decentralization.

Responses from the cryptocurrency community were mixed. Independent developer Udi Wertheimer said, “This is good.” Investor Lark Davis asked why not just use Ethereum?

Source: Twitter

PayPal Eases Bitcoin Limits

Payments platform PayPal may not be building out a new DeFi platform, but it is making it easier for users to transact using bitcoin. PayPal has increased the weekly purchase ceiling for U.S. customers to USD 100K, paving the way for higher transactions. As part of the changes, there will be no yearly purchase cap.

Previously, the limit was USD 20K on weekly bitcoin purchases, while the yearly purchase limit was set at USD 50K.

Square and PayPal seem to be giving the bitcoin price a pop, with the leading cryptocurrency up 2% in the last 24-hour period.

Today’s Market Wrap Up and a Glimpse Into Friday

Stocks were mixed once again today, with the Dow Jones Industrial Average extending yesterday’s gains while the S&P 500 and Nasdaq ended slightly lower. The major indices remain within a stone’s throw of yet more records, but investors played it cautious amid more inflation talk out of the Federal Reserve.

Federal Reserve Chairman Jerome Powell expects that inflation will remain at lofty levels in the coming months before retreating. Investors are also worried about the fallout from the COVID-19 variant due to a surge in the number of cases, as it could trigger another round of lockdowns. The result is uncertainty, something that investors are not a fan of.

On a positive note, the number of jobless claims declined in June, as expected, to 360,000 from 386,000 in the previous week. Separately, bond king Jeffrey Gundlach, who is at the helm of DoubleLine Capital, warned on CNBC that the USD is doomed and will decline “pretty substantially” in the “intermediate-term” due to deficits.

Stocks to Watch

PayPal has bolstered its weekly cryptocurrency purchase cap to USD 100K. So far the stock is not reacting and is down fractionally in extended-hours trading.

On the meme stock front, AMC Entertainment regained some ground, rising close to 8% on the day. The stock is up another 8% in after-hours trading as investors look to turn what has been a sinking ship lately around.

GameStop shares were under pressure during the regular session as Netflix strengthens its gaming offering. Shares of GameStop took back some ground in the extended hours, however, gaining 3%. The company announced that investors could pre-order the Nintendo Switch OLED, which will make its debut in October.

Twitter is gearing up for its earnings report this week. Investors punished the stock as the company tweaks its timeline dashboard. Investors celebrated Jack Dorsey’s other company, Square. Dorsey revealed that Square is building an “open developer platform” dedicated to bitcoin.

Look Ahead

Retail sales for June are due out at 8:30 a.m. ET after falling 1.3% in May. Wells Fargo economists predict that retail sales climbed higher by 0.5%, excluding autos, in June. They are keeping an eye on spending trends at restaurants and bars to gauge the strength of the recovery in the services segment.

 

Serious About Expansion? JPMorgan Makes Its Third Fintech Acquisition In A Year

JPMorgan, the biggest bank in the United States by assets, is expanding its market by acquiring more companies in the fintech sector. The bank is set to complete the acquisition of OpenInvest, a San Francisco-based start-up.

JPMorgan to Buy OpenInvest

JPMorgan Chase has agreed to acquire OpenInvest, a San Francisco-based start-up backed by VC firm Andreessen Horowitz and founded by former Bridgewater Associates employees. This latest development continues the bank’s latest tradition of buying fintech companies.

The acquisition of OpenInvest is JPMorgan’s third acquisition of a fintech start-up in six months. The bank acquired 55ip, a firm that automates the construction of tax-efficient portfolios, in December 2020 and followed that with the acquisition of UK-based robo-advisor Nutmeg earlier this month.

Last year, JPMorgan CEO, Jamie Dimon, pointed out that the bank will be more aggressive towards searching for potential acquisitions. The acquisitions would enable banks such as JPMorgan to compete with some of the leading fintech companies, such as PayPal and Square, which have been gaining popularity globally.

Similar to the Nutmeg deal, JPMorgan didn’t disclose how much it would be acquiring OpenInvest. However, the bank said OpenInvest would help its financial advisors customize clients’ investments in ESG, a category that comprises environmental, social and governance factors.

JPMorgan interested in ESG funds

JPMorgan is focusing on ESG due to the rapid growth in the sector. So far this year, ESG funds have attracted massive investments, bringing the total global assets under management to almost $2 trillion.

Mary Callahan Erdoes, CEO of JPMorgan’s asset and wealth management division, said, “Clients are increasingly focused on understanding the environmental, social, and governance impact of their portfolios and using that information to make investment decisions that better align with their goals.”

With OpenInvest, JPMorgan can allow its clients to create highly personalized, dynamic values-based portfolios. This will grant them exposure to ESG investment funds provided by the financial institution.

JPM stock chart. Source: FXEMPIRE

JPMorgan’s stock price is up by less than 1% at Tuesday’s pre-market trading session. Year-to-date, the stock has performed excellently, rising by 22.61% to trade above $154 per share currently.

Best Growth Stocks July 2021

The hallmark way we go about finding the best stocks…the outliers, is by looking for quiet Big Money trading activity.

Oftentimes, that can be institutional activity. We’ll go over what that looks like in a bit. But, the 5 stocks we see as long-term candidates are ATVI, SHOP, PYPL, GOOGL, & QFIN.

For MAPsignals, we believe the true tell on the near-term trajectory of the stock lies in the trading activity of the stock. The bottom line here is that oftentimes the manner in which a stock trades can oftentimes alert you to the forward fundamental picture more so than by simply looking at a company’s financials alone. We want the odds on our side when looking for the highest quality stocks.

Up first is Activision Blizzard, Inc. (ATVI), which is a leading gaming and entertainment firm. They have been cruising higher for years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for ATVI being:

  • 1-year performance (+36.17%)
  • YTD underperformance vs. NASDAQ ETF (-2.6% vs. QQQ)
  • Historical big money signals

Just to show you what our Big Money signal looks like, have a look at all of the top buy signals ATVI has made the past few years. That’s one strong uptrend. Green bars are showing that Activision Blizzard was likely being bought by a Big Money player according to MAPsignals.

It’s clear there’s a lot of green historically with this stock. That’s exactly what you want to see when looking for a great growth name. The lone red signal occurred during a broad market pullback:

Source: MAPsignals, End of day data sourced from Tiingo.com
Source: MAPsignals, End of day data sourced from Tiingo.com

On top of technicals, you need to look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Activision’s revenue numbers have been strong:

  • 3-year sales growth rate (+6.09%)
  • 3-year earnings growth rate (+196.28%)

Next up is Shopify, Inc. (SHOP), which is an ecommerce software company. The company has been a huge winner over the years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for SHOP being:

  • 1-year performance (+62.22%)
  • YTD vs. technology ETF (+4.83% vs. XLK)
  • Recent big money signals

While the stock has outperformed recently, look at the long-term picture. These are the top buy signals Shopify has made since 2015. Clearly the Big Money has been consistent for years:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a great long-term technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Shopify has grown revenues massively:

  • 3-year sales growth rate = +64.02%
  • 3-year earnings growth rate = -63.12%

Another growth name to consider is PayPal Holdings, Inc. (PYPL), which is a leading digital payments company.

When we decide on the strongest candidate for long-term growth, we want to see a history of big money buying the shares. PayPal has that. Also, recent underperformance can be attractive:

  • 1-year performance (+74.5%)
  • YTD outperformance vs. technology ETF (+6.79% vs. XLK)

Below are the big money signals PayPal has made since 2015. After the pandemic lows, it’s been moon-bound:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of a strong technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. PayPal’s growth rate is impressive. I expect more growth in the coming years:

  • 3-year sales growth rate = +17.96%
  • 3-year earnings growth rate = +36.06%

Number 4 on the list is Alphabet Inc. (GOOGL), which is the leader in online search amongst other growth areas. The shares have been in bull-mode the past couple of years.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for GOOGL being:

  • 1-year performance (+72.37%)
  • YTD outperformance vs. technology ETF (+29.13% vs. XLK)
  • Historical big money signals

Below are the big money signals that GOOGL has made since 2015:

Source: MAPsignals, End of day data sourced from Tiingo.com
Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, Alphabet has been growing nicely:

  • 3-year sales growth rate = +18.06%
  • 3-year earnings growth rate = +60.69%

Our last growth candidate is 360 DigiTech, Inc. ADR (QFIN), which is a leading Chinese finance firm. The stock has zoomed recently.

When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for QFIN being:

  • 1-year performance (+322.5%)
  • YTD outperformance vs. financials sector (+231.7% vs. XLF)
  • Historical big money signals

Below are the big money signals 360 DigiTech has made since 2019. You can see how powerful the performance has been the past year:

Source: MAPsignals, End of day data sourced from Tiingo.com

On top of the technical picture, one should also look under the hood to see if the fundamental picture supports a long-term investment. As you can see, 360 DigiTech has grown revenues massively over the past few years:

  • 3-year sales growth rate = +504.91%
  • 3-year earnings growth rate = -761.38%

The Bottom Line

ATVI, SHOP, PYPL, GOOGL, & QFIN represent top growth stocks for July 2021. Given the strong historical revenue & earnings growth, and multiple big money buy signals, these stocks could be worth extra attention.

To learn more about MAPsignals’ Big Money process please visit.

Disclosure: the author holds long positions in PYPL & GOOGL in personal and managed accounts. He holds no positions in ATVI, SHOP, & QFIN at the time of publication.

Investment Research Disclaimer

Time for Silver-Backed Crypto?

Its market recently exceeded $1 trillion. That’s a long way from its humble beginnings shortly after the 2008-2009 financial crisis.

Bitcoin will keep facing challenges as some governments disparage and regulate it, while others try bans of one form or another.

I doubt that will meet with much success. Big name money managers and high-profile tech entrepreneurs have gotten on board, many reversing their earlier doubts.

Bitcoin is decentralized, the blockchain is verified by over 100,000 independent nodes globally, and it has a hard limit supply of 21 million coins. Other cryptos and central banks may want in on this sector, but there will only ever be one Bitcoin.

Still, I think precious metals-backed cryptos could become serious contenders in the digital currency revolution, as the world looks for the security of safe havens with the convenience of crypto.

Crypto De-Fi Revolution

Bitcoin has come a long way. Today, it’s gained not only the acceptance of big-name investors like Paul Tudor Jones, Ray Dalio and Elon Musk, it’s been integrated by a number of well-established payment systems. MassMutual, a 170-year old insurance behemoth, bought $100 million worth of bitcoin last December. In February, Tesla announced it had bought $1.5 billion worth.

And crypto as a sector is exploding. PayPal recently said it was investing heavily into a new business unit aimed exclusively at cryptocurrencies. Their idea is to facilitate cryptocurrency payments across PayPal’s network, and this by the end of 2021. It’s all part of a burgeoning trend called decentralized finance, or DeFi.

Remember, there are an incredible 29 million merchants who use Paypal, meaning they will be able to accept cryptocurrency payments through that network. In fact to simplify things, PayPal will automatically convert the crypto payment into the national currency of the merchant.

The big advantage for merchants is the speed of transaction clearing. Credit card and bank payments typically take 24 hours or longer to settle. With crypto that will happen within seconds or minutes, allowing merchants to access their funds much sooner.

Just recently, Visa announced it would allow customers to use the USD Coin cryptocurrency to settle transactions on its network. USD Coin is a “stablecoin cryptocurrency” whose value is pegged to the U.S. dollar. This follows on the heels of Mastercard, BlackRock and BNY Mellon all confirming they would be facilitating crypto transactions for investments and payments.

Despite all this, some challenges remain.

Central Bank Digital Currencies

Many people can’t get past the idea that there’s nothing physical backing Bitcoin. And if you have no electricity you can’t get at your crypto.

The fact that nothing’s backing most cryptos is not that different from the currency we use today. It has value because central banks say so and people accept it. So that’s not the biggest hurdle. However, if there is a large and extended power outage, then there’s a real problem as crypto has to be accessed on a computer, tablet, or smartphone.

But these hurdles haven’t stopped numerous central banks from researching and implementing digital currencies. As the following chart shows, central banks around the world have been busy developing their own CBDCs (central bank digital currencies).

Over 60 central banks are currently working on this, so CBDCs are soon coming to a country near you.

These are not the same as cryptocurrencies. Central banks love the idea of eliminating cash. That’s because it allows them to track every dollar or other currency unit they create. That way they know who spends how much, when, where and on what.

The level of control that will ultimately give them will be unmatched. And the COVID-19 pandemic has massively accelerated this trend.

There are over 400 million people in China and India without a bank account. “Unbanked” people would have easier access to tax refunds or stimulus checks. China is pushing hard and fast towards making itself into a “cashless” society. It’s planning to make the 2022 Beijing Winter Olympics a completely cash-free event.

Don’t think the U.S. is willing to be left behind. This past February, Fed Chair Jerome Powell said a digital USD is a “high-priority project…We are looking very carefully, very carefully, at the question of whether we should issue a digital dollar.” Around the same time, Treasury Secretary Janet Yellen told the New York Times, “It makes sense for central banks to be looking at” CBDCs, adding that “too many Americans don’t have access to easy payments systems and banking accounts, and I think this is something that a digital dollar, a central bank digital currency, could help with.”

CBDCs can be created and distributed much more easily and quickly than existing currencies. This is a major problem in my view (think inflation), but it’s a major advantage if you’re a central planner.

Already the world has reached an astounding $281 trillion in total global debt, or more than 355% of world GDP. If CBDCs are adopted, I expect they will hasten this trend. Eventually, the entire financial system is likely to need a total reset.

Precious Metals Backed Crypto

I believe precious metals will have a major role to play. Even if I’m wrong on that point, they will still likely soar as inflation hedges.

In fact, I think that ultimately we may have a gold and/or silver backed crypto currency that is government mandated, once faith in fiat currencies is completely lost and a reset is required. That new currency will have both intrinsic value and the conveniences of crypto. And if that currency is on a blockchain which logs all transactions, then it can be very secure.

There are already several cryptos backed by precious metals or that are in the development stages. One of the biggest advantages of this approach to owning precious metals is that it allows ownership of small amounts, without dealing with storage issues, while offering security and the ability to easily and quickly transfer value to someone else.

Here are a few companies that are active in this space. For example, Aurus (https://aurus.io/) has built a platform allowing refineries, distributors and vaults to autonomously tokenise precious metals. There are other similar developments:

  • deVere Group has the Pax Gold crypto, which is backed by a portion of a London Good Delivery gold bar
  • Dignity Gold company has secured $6 billion in gold from mining claims in Nevada and Arizona for its DIGau digital token
  • Lode (https://lode.one/) has the AUX Coin which represents 1 milligram of vaulted, audited, insured and verifiable gold bullion, and the AGX Coin is 1 gram of silver

(Note: I provide the above for informational purposes only. I am not endorsing any of these companies).

Even if precious metals backed cryptocurrencies don’t replace CBDCs, they are very interesting as they may go a long way to solving the problems of storage, security and rapid transferability.

This is certainly an area of precious metals to watch closely. People may well gravitate towards this as they seek a highly practical store of value, based on one of the oldest forms of real money: gold and silver.

One thing is certain; precious metals are in the early days of a massive bull market. That’s why in the Silver Stock Investor newsletter I provide my outlook on which silver stocks have the best prospects as this bull market progresses. Many offer 5x to 10x return potential in just the next few years, especially as silver heats up.

And crypto may be the next major source of demand for precious metals, helping to push silver and gold much higher in the future.

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

The $217 Million Dollar Pizza: Don’t Let These 3 Stocks Get Away Like Bitcoin

Price is what you pay, value is what you get.

The infamous Warren Buffett quote sums up investing vs trading perfectly.

The short-term trade is all about instant gratification. Take a pizza for instance. We all know it’s bad for us, but it tastes so good. Maybe that’s why Americans eat 3 billion pizzas and spend $38 billion on them each year.

Short-term trades feel great when we win, just like pizza feels great going down. But later, that pizza might not feel so great. And long-term, we know it clogs arteries and does all sorts of other damage. So, when we tee-up a quick trade poised to clip a profit, the greed center of our brains is hoping to get to the pleasure center.

Short-term traders are often looking for free money.

Maybe this was what Laszlo Hanyecz was thinking on May 22nd, 2010. He was hungry and bought two pizzas in Jacksonville, Florida. Only he made the first real-world bitcoin transaction paying 10,000 BTC for them. Surely, at the time it felt like free money – or rather – free pizza. Who foresaw bitcoin’s future?

Maybe the pizza seller did. Because now those two pizzas are worth $217 million each.

If ever there was an example of someone who likely regretted the short-term trade and wish they’d held for the long-term, it might be poor Laszlo.

There are two sides to every coin (except perhaps bitcoin). What the short-term trade offers in terms of quick excitement, the long-term trade severely lacks. Buy-and-hold investing has a stuffy stigma. Let’s face it, being patient and waiting years for monster gains is boring. Not many want to do it.

That is until one looks up 5, 10, or 30 years from now at someone else’s successful long-term investments.

Imagine you had sold 2 pizzas for 10,000 bitcoins 11 years ago. And then never did anything with the cryptocurrency. Naturally, you’d have forgone a fast in-and-out trade trying to clip a few percent. You also would need the long-term view on bitcoin’s potential. But had you done nothing, you would have turned roughly $16 bucks into nearly half-a-billion dollars.

That, my friends, is the power of long-term investing.

At MAPsignals, we see the investing-world through the lens of stocks: specifically, outliers.

What’s an outlier?

An outlier stock is a stock that makes insane gains, more than most other stocks. Professor Hendrick Bessembinder proved that for the past nearly 100 years, only 4% of all stocks accounted for 100% the gains above treasuries. That 4% represents the outliers.

If you missed the bitcoin boat, don’t worry- I did too. But I did catch some monster outliers that helped me get closer to my long-term investing goals. And today, you’re in luck, because I’m about to share 3 outlier stocks with close ties to bitcoin and cryptocurrency. These stocks represent a great way to own awesome businesses, and simultaneously get exposure to cryptocurrency.

Nvidia Corporation (NVDA)

NVDA is a Technology stock focused on specialized semiconductors. It has great sales and earnings growth and a juicy 62% gross profit margin. It has reasonable debt levels and a reasonable P/E ratio. Their chips are popular with bitcoin miners.

Now, let’s take a look at the Big Money data. What’s that? We have a process that looks for high-quality stocks seeing buy activity in their shares. Only the best ones show up on our weekly Top 20 reports.

What we want to see is a repeat offender. Look how Nvidia has been a Big Money magnet over the years:

Times on the Top 20 since July 1st, 2014: 54

Outlier status: OUTLIER

First signal: 2000-06-05

Performance since first signal: +5433.85%

Here’s a chart of all of those rare signals:

 

Source: www.mapsignals, End of day data sourced from Tiingo.com

Next up is PayPal Holdings, Inc. (PYPL)

PYPL is a Financials stock focused on Consumer Finance Services. It has great sales and earnings growth and a juicy 55% gross profit margin. It has reasonable debt levels and a reasonable P/E ratio. They also own the popular digital payments app, Venmo.

Recently, PayPal has allowed their users (and Venmo users) to transact in bitcoin.

Now, let’s look at the Big Money profile for PYPL.

BIG MONEY DATA:

Times on the Top 20 since July 1st, 2014: 45

Outlier status: OUTLIER

First signal: 2016-09-20

Performance since first signal: +520.53%

 

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Lastly, there’s Square, Inc. (SQ)

SQ is a Discretionary stock focused on Retail Industry Software. It has great sales and earnings growth and a juicy 28% gross profit margin. It has high debt levels and a high P/E ratio.

They have point-of-sale technology for merchants and the popular Cash App. The latter allows users to transact in bitcoin.

Let’s look at the historical Big Money profile for Square.

BIG MONEY DATA:

Times on the Top 20 since July 1st, 2014: 12

Outlier status: MATURING

First signal: 2017-10-17

Performance since first signal: +535.82%

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s the bottom line: If you missed out on bitcoin’s massive run, there are stocks that are correlated to the cryptocurrency’s success. If you’re looking for stock exposure that can benefit from the rise in bitcoin, consider Nvidia, PayPal, & Square.

Disclosure: the author holds long positions in PYPL & SQ in personal accounts and PYPL in managed accounts, but no position in NVDA at the time of publication.

Learn more about the MAPsignals process here: www.mapsignals.com

Disclaimer

https://mapsignals.com/contact/

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

PayPal Top Earnings Forecasts, Bets on Crypto

PayPal Holdings, Inc. (PYPL) shares rocketed over 4% higher in Wednesday’s extended-hours trading session after the company delivered a stellar quarterly earnings report.

The San Jose digital payments giant reported an adjusted first quarter (Q1) profit of $1.22 per share, blowing pasts Wall Street’s expectation of $1.01 a share. Moreover, the bottom line grew 85% from a year earlier. Revenues for the period came in at $6.03 billion, up from year-ago sales of $4.62 billion. Volume and user metrics also impressed, with the company processing $285 billion in the quarter and adding 14.5 million net new active accounts.

Looking ahead, management forecasts Q2 EPS of $1.12 on revenues of $6.25 billion. Analysts had expected earnings of $1.10 on sales of $6.16 billion. The company sees cryptocurrency continuing to drive growth in upcoming quarters. “We’ve got a tremendous amount of really great results going on tactically with our crypto efforts,” CEO Dan Schulman told investors, per CNBC. PayPal initially introduced leading cryptocurrencies to its platform last October and has progressively added more integration with digital assets over the past six months.

Through Wednesday’s close, PayPal stock has a market capitalization nearing $300 billion and trades nearly 100% higher over the last 12 months. YTD, the shares have added 5.64%, which trails the S&P 500’s gain of 11% over the same period.

Wall Street View

Late last month, Rosenblatt Securities analyst Sean Horgan raised his price target on the stock to $350 from $320 and maintained his ‘Buy’ recommendation. Horgan sees the payments giant continuing to benefit from higher levels of consumer spending, fueled by record levels of government stimulus.

Elsewhere, the stock racks up mostly favorable brokerage coverage. It receives 36 ‘Buy’ ratings, 5 ‘Overweight’ ratings, and 6 ‘Hold’ ratings. Just one analyst recommends selling the shares. Wall Street has a 12-month price median price target on the stock at $314.55. This represents 27% of upside from yesterday’s $247.40 close.

Technical Outlook and Trading Tactics

PayPal shares have recently retraced to a multi-month uptrend line extending back to the March 2020 pandemic-induced low. Although the price broke below this closely-watched indicator in Wednesday’s session, pre-market trading indicates a move back above it after the company’s solid earnings report.

Providing the stock closes above the trendline, active traders should anticipate a retest of the YTD high at $309.14. Protect capital with a stop-loss order placed under today’s low.

For a look at today’s earnings schedule, check out our earnings calendar.

PayPal Stock Sees Big Money Buying

This comes just months after they gave PayPal users crypto trading privileges. Talk about moving into a very hot space. Whether you like it or not, bitcoin and other cryptocurrencies are here to stay.

And I think it’s a great move by PayPal. They are quickly becoming a big player in that landscape.

This sets up well for the stock going forward. But there’s another story going on that points to more upside. The Big Money has been crazy about the shares…for years.

You see, smart money managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all of the big money signals PYPL has made the last year.

Up until February, each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com, End of day data sourced by Tiingo.com

In 2021 alone, PYPL made 8 of these rare signals. Generally speaking, that means more upside is ahead.

Now, let’s check out a few technicals grabbing my attention:

  • 1 year outperformance vs. market (+67.26% vs. SPY)
  • 1 year outperformance vs. Financials ETF (+50.63% vs. XLF)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, PayPal has been growing sales and earnings at a breakneck pace. Take a look:

  • 3-year revenue growth rate (+17.96%)
  • 3-year earnings growth rate (+36.06%)

Source: FactSet

Those are killer growth rates. Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, PayPal has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and awesome fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

Since 2016, PYPL has been a constant Big Money favorite. And since its first appearance on this report, it’s up +560%!

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Let’s tie this all together.

PayPal continues to fire on all cylinders technically and fundamentally. The latest news of allowing Venmo users to transact in crypto is encouraging to their growth story. I like the long-term story of the stock.

The Bottom Line

The PayPal rally likely has further upside. Big money buying in the shares is signaling to take notice. Shares could be positioned for a bounce soon. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds a long position in PYPL in personal and managed accounts at the time of publication.

Learn more about the MAPsignals process here.

Will Earnings Season Bring Volatility To The Stock Market?

The Commerce Department last week reported that the U.S. economy grew at a +6.4% annual rate in the first quarter, slightly below estimates but still strong. If it would have come in real hot and much higher bears would have pointed to fanning the inflation flames even further.

This mindset of “bad-news-could-be-good-news” is helping to keep the stock market at or near all-time highs. If economic data somewhat disappoints it means the Fed stay dovish and accommodative for longer.

Fundamental analysis

That might be important to keep in mind as April data starting this week is expected to be extremely good. The April Employment Report is due next Friday and with upper-end of Wall Street estimates look for upwards of +1 million new jobs being added. Other key April data next week includes the ISM Manufacturing Index on Monday, and the ISM Non-Manufacturing Index on Wednesday.

employment

If the data comes in better than expected the bears will win the nearby battle and have the upper hand when talking higher inflation and the Fed perhaps tightening sooner than anticipated. So this week could be a bit tricky whereas “disappointing-data” could actually be digested as a win for the bulls and “strong data” a win for the bears.

The earnings calendar is packed again next week with big names including Activision Blizzard, Adidas, AllState, Cerner, Cigna, CVS, Dominion Energy, Enbridge, Etsy, Hilton Worldwide, Moderna, Monster Beverage, Nintendo, PayPal, Peloton, Pfizer, Rocket Companies, Square, TMobile, Wayfair, and Zoetis.

COVID-19

Checking in on U.S. progress against Covid-19, the number of adults that have received at least one dose is around 60%-65%, depending on the source. Global cases continue to rise led by India, where new infections have been hitting new record highs every day for weeks now. The country reported a staggering 380k new infections and 3,645 new deaths on Thursday while less than 10% of the population has been vaccinated.

Bottom line, the global restart will not be synchronized like many bulls had hoped would be the case and global growth may continue to struggle. At the moment the U.S. market doesn’t seem to care. It will be interesting to see if increasing inflation and continued global headwinds will eventually come home to roost.

SP500 technical analysis

SP500 earnings season

Earnings season can bring volatility to the stock market. At the beginning of May, cycles turn to the downside. Note, this is only a timing tool and it never shows the amplitude or strength of the move. When cycles are topping, it means we can expect a move down or choppy trading. This is it.

But relying on cycles only is not a good idea. Insider Accumulation Index shows bearish divergence on a daily chart. At the same time, Advanced Decline Line is still strong. The key resistance is around 4250 at the moment. I believe earning season can bring a profit booking to the stock market. If that happens, watch 4000 – 39500. It was a massive resistance and now it might turn into support. Intermarket Forecast is neutral. But if it turns to the downside, we will finally see a pullback in SP500.

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