AMC Chief Gives Individual Investors Louder Voice, Addresses Share Count

AMC Entertainment held its shareholder meeting on July 29 at a time when the company’s future hangs in the balance. Investors had all but written off the stock during the pandemic-fueled lockdowns, but the company experienced a 180-degree turn in 2021. With the tailwind of retail investors at its back and a digital strategy beginning to unfold, AMC is making moves to make its shareholders feel even more invested in the future direction of the company.

AMC CEO Adam Aron, who is active on social media, took to Twitter to thank shareholders who voted on issues at the latest meeting in Kansas City. Aron reminded his followers that the company reversed its recent decision to issue more shares after receiving backlash from investors, saying,

“You were not ready for this. And we listened to you.”

Debunking FUD

Aron also addressed what he described as “so much FUD going on around on the internet.” He was seemingly referring to accusations that the company was not being transparent about the meeting, but the chief executive put the kibosh on those rumors.

Aron took things a step further when he revealed that individual shareholders would be invited to ask questions on future earnings webcasts, a benefit typically reserved for Wall Street analysts. He also tipped his hand to a possible future direction of the company, saying that AMC will engage with U.S. professional sports leagues about potentially securing theatrical rights for the following:

  • College football
  • Premiere League
  • FIFA World Cup
  • UFC
  • Boxing

Aron admitted, however, that this is a “difficult and possibly prohibitively expensive” process.

Share Count

On the Twitter thread, followers debated the transparency of AMC’s share count, which Aron addressed head-on. He revealed that the “all-inclusive share count total” was 513,330,240 of “legally issued shares” as of June. The company has not issued any new shares since that time. On naked short-selling as well as options trading, Aron basically pleads the Fifth.

Source: Twitter

Buying the Dip

AMC’s stock price has been on a wild ride for the month of July, starting above the USD 50 level and ending below USD 40. Many retail investors are holding out for the next big short squeeze in hopes of cashing in on their bets.

Investors are encouraging one another on social media to dig in their heels and buy the dip.

Today’s Market Wrap Up and a Glimpse Into Friday

Stocks finished the day in the green after investors were able to brush off signs that the economic recovery may have hit a snag. The Dow Jones Industrial Average tacked on more than 150 points, while the S&P 500 and tech-heavy Nasdaq also inched higher. The market indices showed resilience even as the delta variant threatens to throw a wrench into economic expansion for the rest of the year.

Second-quarter GDP expanded at an annual rate of 6.5%, which catapults the economy beyond pre-COVID levels but falls short of estimates. Meanwhile, the forecast for the rest of the year could be threatened by the uncertainty from the delta variant. Companies have responded by delaying the return to the office or in some cases reinstating mask policies for consumers. It’s déjà vu all over again.

Investors were able to focus on the glass half full. For example, consumer spending and corporate earnings have been bright spots of late. Meanwhile, supply chain issues seem to be a stumbling block.

Stocks to Watch

Amazon reported its Q2 results, and the stock sank 5% in after-hours trading. While the e-commerce giant reported revenue of slightly more than USD 113 billion, Wall Street analysts were looking for USD 115 billion. Amazon’s revenue outlook for Q3 also falls below consensus estimates, and the stock is being punished. The latest quarterly performance unfolded just before Jeff Bezos was replaced as CEO by Andy Jassy earlier this month.

Pinterest is also under pressure in extended-hours trading, falling 14%. The company fell short on its number of monthly active users, which came in at 454 million compared to estimates of 482 million. This indicator could also come back to bite Pinterest in Q3, for which management failed to provide any forecast and blamed the pandemic.

Robinhood’s IPO was a flop after the stock fell more than 8% on its first day of trading on the Nasdaq. The trading app’s shares opened at USD 38 and finished the day at just under USD 35. Robinhood sought to appeal to retail investors but was in for a rude awakening. The broker finished the day with a market cap of USD 29 billion.

Look Ahead

On the economic front, Personal Income & Spending for the month of June comes out on Friday. Wells Fargo economists predict that income fell 0.2% while spending increased 2% vs. May levels. The weaning away of the stimulus is pressuring incomes.

Robinhood Markets Snubbed by Investors on Nasdaq Debut

Commission-free trading app Robinhood is officially a publicly traded company, but investors did not roll out the welcome mat for the stock. Shares of Robinhood, which trade under the symbol “HOOD,” opened at USD 38 per share on the Nasdaq before falling to around USD 33. The new stock managed to recover some of those losses and is down 5% at the last check, which is better than the close to 10% declines it suffered earlier in the session.

Source: TradingView

Isn’t It Ironic?

There has been a great deal of hype surrounding the Robinhood app, for several reasons, chief among which was its decision to earmark shares for its users. Robinhood pledged more than one-third of its float for customers of the trading app, which is on the generous side. A typical IPO will reserve less than 10% for retail investors as hedge funds and other big investors tend to get first dibs.

Individual investors have seemingly not returned the favor to Robinhood, leaving the mobile trading app hanging on its stock market debut. It could have gone either way. Robinhood was hoping to mend the fences between itself and jilted retail investors who were left holding the bag after the broker placed trading restrictions on popular meme stocks, including GameStop and AMC Entertainment.

The massive buying in GME And AMC by the Reddit WallStreetBets crowd in early 2021 pressured short-sellers, mainly hedge funds, and Robinhood caved to the pressure. The broker has since lifted those trading restrictions. Apparently, all is not well that ends well, however, if Robinhood’s stock price on day one is any indication. Social media members couldn’t resist the irony of the situation.

Celebrity Backers

Robinhood is kicking off its future as a public company with a market cap of USD 34 billion. A couple of astute backers who timed it right are Nas and Snoop Dogg, who invested in the trading app in 2014 when the company had a value of USD 62 million attached.

NBA champion Kevin Durant and his manager Rich Kleiman are probably not complaining either. They placed a bet four years ago through Thirty Five Ventures, the VC firm Drant and Kleiman co-founded.

Their return on Robinhood is reportedly in the ballpark of 2,500%.

Dogecoin Community Looks to Get on AMC’s Radar

Dogecoin, the seventh-biggest cryptocurrency, and AMC Entertainment have something in common. They have both attained meme status in their respective spheres. Now some Dogecoin fans would like to see those two worlds collide.

It appears to have started with YouTuber Steven Steele, who discusses many cryptocurrency-related topics on his channel. Steele, who has more than 10K followers on Twitter, suggested that AMC should start accepting Dogecoin as a payment method.

With all of the focus on bitcoin and Amazon, Steele has seemingly sought to shift the narrative in another direction. It is all speculation at this point, but Steele’s suggestion seems to be resonating with Doge fans. Dogecoin bull Elon Musk himself appears to have “liked” Steele’s tweet.

Source: Twitter

Mostly Cheers

The suggestion seemed to draw mostly cheers on social media, with Steele’s followers suggesting that it would send the Doge price to the moon. Dogecoin continues to hold onto the USD 0.20 level, for now, but it has shed 3% in the last 24-hour period.

Twitter Account “It’s All Risky,” which is described as “a former bitcoin maximalist who took the Doge pill,” agreed with Steele’s AMC idea. The “It’s All Risky” account even tagged AMC CEO Adam Aron, who has been known to engage with his followers on social media, in the thread.

“It’s All Risky” suggested that if AMC jumped on the Dogecoin bandwagon, Aron would be in good company — alongside Doge fan Elon Musk. While Tesla owns some bitcoin, the EV maker has yet to add support for Dogecoin as a payment method.

Both meme assets — Dogecoin and AMC — have seen better days. The Dogecoin price has basically been slashed in half since early June, while AMC is trading below USD 40 after trading above USD 70 last month.

Burger King Brazil

Dogecoin has already caught the eye of other companies. Men’s consumer brand Axe, for instance, launched a limited edition of the “Dogecan,” which is a physical product that the company distributed for free.

Not to be outdone, Burger King Brazil has just introduced the Dogpper, which seems to be a play on the Whopper and which consumers can pay for using Dogecoin. Burger King Brazil has launched an online process in which Doge holders can transfer their coins to the restaurant’s Dogecoin wallet.

When big companies recognize cryptocurrencies such as Dogecoin, it drums up excitement in the cryptocurrency community. Whether that positivity will make its way to crypto market prices, however, remains to be seen.

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.

GameStop Does Some Rebranding, Gains Twitter Nod

GameStop apparently has no use for the popular phrase, ‘if it ain’t broke, don’t fix it.’ The gaming retailer is making changes, including the rebranding of its EB Games segment in Canada. The company’s EB Games locations throughout Canada as well as its e-commerce store will be operating under the GameStop name by the end of the year. GameStop’s Canadian rebranding comes in response to feedback from its customers and investors.

The move is being met with mixed reactions on social media. Some users are questioning the use of the company’s resources to make the change, while others are saying it took them long enough. One thing that people seem to agree on is that if GameStop wants to remain relevant, it is going to have to transform itself into a digital-focused company. That is precisely what GameStop is trying to do.

Digital Push

GameStop is getting a boost from social media giant Twitter. According to reports, Twitter is including GameStop in a group of companies that will be permitted to make a product push on their account page as Jack Dorsey’s company similarly looks to broaden its reach.

GameStop is one of 12 companies that will be able to spotlight nearly half a dozen products on its Twitter profile page. Reminiscent of the Tinder dating app, there will be a “swiping” capability as well as the opportunity to be brought to GameStop’s e-commerce site to complete a sale.

This program, which is dubbed Shop Module, could go a long way for GameStop’s desire to be part of the digital pack, which is where all of the gaming companies reside. For its part, Twitter won’t become an e-commerce site in the true sense of the word, as it won’t actually be processing any of the transactions or taking a piece of the sales pie.

Cruel Summer

Twitter’s stock is higher on the day, but GameStop is trading in the doldrums. GameStop’s stock is down more than 5% today and has fallen below the USD 170 level. In early June, GameStop shares were trading at more than USD 300 but it has been a cruel summer for meme-stock investors.

Meanwhile, GameStop has muscled its way into the S&P 400 midcap index, effective early August. GameStop’s market cap currently hovers at USD 12.6 billion.

Billionaire Mike Novogratz on Bitcoin Rebound: ‘Institutions Are Buying’

Bitcoin has taken investors on a roller coaster ride of late. As an emerging asset class, cryptocurrencies are inherently volatile. Nonetheless, the bitcoin price has been mired in a downturn, and its recent rally above USD 40K was a psychological boost to investors. That bull run seemed to be short-lived after Amazon denied reports that it was on the verge of supporting bitcoin, but now it appears that the rally may have legs.

The bitcoin price is perched back above USD 40K once again, even without Amazon’s help.  And most of the top 10 cryptocurrencies are trading in the green too.

While the signs suggested that Amazon was the reason for the recent market swings, Galaxy Digital Founder Mike Novogratz suggests there is another catalyst for today’s gains — institutions. He told CNBC:

“Crypto has bounced back because institutions are buying…This was partly a big short-covering rally and partly recognition that this is a real market that’s not going anywhere.”

Crypto Is Here to Stay

Novogratz, a former hedge fund trader on Wall Street, pointed to FTX, a cryptocurrency exchange startup that just attracted USD 900 million to its coffers in a Series B round.  He also noted the caliber of the investors in the round, which included the likes of SoftBank and Paul Tudor Jones, among others, saying it sent a message to the market that cryptocurrencies are here to stay.

Novogratz Claps Back

Cryptocurrencies may be here to stay, but certain lawmakers are doing everything they can to make it harder to invest. U.S. Senator Elizabeth Warren is behind a letter to Treasury Secretary Janet Yellen urging the former Fed chair to crack down on the cryptocurrency industry. Senator Warren painted retail investors as victims amid crypto market volatility that could lead to financial losses.

Novogratz isn’t having any of it. He went on a tweetstorm calling out legacy finance for things such as bank overdraft fees while defending the cryptocurrency industry and its participants. Novogratz was “riled up” by Senator Warren, saying she does not “seem so progressive” to him.

The Galaxy chief did not hold back, suggesting that if banks had the same standards as DeFi when it comes to transparency, the mortgage crisis of the 2008 era would never have occurred. Novogratz added that know-your-customer (KYC) standards are coming to crypto. He would also like to see politicians more educated on the market.

Today’s Market Wrap Up and a Glimpse Into Wednesday

A winning streak on Wall Street came to a screeching halt today after all three of the major indices finished in the red. The Dow Jones Industrial Average, S&P 500 and Nasdaq all ended the day lower after Monday’s record session.

The Nasdaq fell more than 1% as tech stocks tumbled. Investors appear to be taking some profits after five days of gains.

Technology leaders reported their earnings after the closing bell, including Google parent Alphabet, Microsoft and Apple. All three companies shined in different areas, while revenues were strong all around.

Durable Goods orders for items such as vehicles and appliances increased last month, the latest data show, in yet another sign that the economic recovery is in full swing. Supply-chain constraints continue to be a problem, however.

The results buoyed General Electric shares, which climbed 1% higher. GE also reported Q2 earnings, and its aviation division is poised to benefit from a rebound in the travel industry.

The FOMC began a two-day meeting today. And while inflation will no doubt be at the center of the discussions, economists are not expecting any surprises. Stock index futures are under pressure, with the Dow Jones, S&P 500 and Nasdaq all moving lower. Dow futures are down nearly 100 points on Tuesday evening.

Stocks to Watch

  • Apple’s earnings were better than expected, while iPhone sales increased 50% vs. year-ago levels to USD 39.6 billion. The stock is down more than 1% in extended-hours trading as investors worry if Apple can keep the good times rolling, especially in light of chip supply issues.
  • Microsoft just flipped green in after-hours trading with the stock up 1%. The company outperformed analyst estimates on the top and bottom lines. Fourth-quarter revenues soared more than 20% to USD 46.2 billion. Microsoft has a market cap of USD 2.15 trillion.
  • Google parent Alphabet far exceeded Wall Street estimates and benefited from robust online advertising sales.

Look Ahead

The earnings parade is far from over, with Facebook, PayPal, McDonald’s and more all on tap for Wednesday. In addition, Dow stock Boeing will unveil its Q2 results before the opening bell. The company is widely expected to report a loss as it continues to grapple with 787 jet airliner setbacks.

Google Parent Alphabet Leaves Wall Street Analysts in the Dust

Investors were skittish ahead of earnings out of big tech companies. All eyes have been on technology earnings, as the sector has been helping to fuel the market higher and investors want to know if it can last.

Google parent Alphabet has just reported its Q2 results, and the tech giant didn’t disappoint. After the stock fell 2% in the regular session, shares are up approximately 3% in extended-hours trading.

Beat the Street

Investors are celebrating Alphabet for beating estimates on the top and bottom lines. The company reported EPS of USD 27.26 vs. estimates of USD 19.34. Meanwhile, revenue came in at USD 61.88 billion while Wall Street analysts were calling for about USD 56 billion.  With a massive market cap of USD 1.79 trillion, Google/Alphabet is growing at a pace that is akin to a tech unicorn.

Google and Alphabet CFO Ruth Porat stated:

“Our strong second-quarter revenues of USD 61.9 billion reflect elevated consumer online activity and broad-based strength in advertiser spend.” 

Ad Revenue Race Is On

Online advertising is booming as businesses spend on internet ads with a vengeance now that the economy has officially reopened. Companies like Snap Inc. already reported robust ad revenue for Q2, teeing up Alphabet to take the baton. Now the race is on.

Google’s online ad revenue soared nearly 70% in Q2 vs. year-ago levels to USD 50.4 billion. YouTube’s ad revenue alone came in at USD 7 billion, soaring 84% YoY and topping Wall Street estimates.

Google Cloud revenue came in at USD 4.63 billion, also better than expected. Google has been investing in artificial intelligence and the cloud. Alphabet also recently got the green light for a USD 50 billion share repurchase program of Class A and Class C shares.

If tech stocks continue to work their magic, they could potentially carry the market higher on Wednesday and beyond.

The gains in Alphabet’s shares come on the heels of a bullish performance in which the stock has advanced 50% so far this year. Meanwhile, tech giants Microsoft and Apple also reported earnings after the bell, but both stocks are moving lower in after-hours trading.

Investors might want to take note that the strong online ad sales market is expected to persist. GroupM is reportedly predicting global ad sales will be USD 749 billion in 2021, up by a double-digit percentage vs. year-ago levels. Tech stocks such as Alphabet could potentially continue to benefit from this trend.

Shiba Inu Inches Closer to an eToro Listing

Cryptocurrency investors have been on a wild ride of late, and Amazon.com has been in the middle. Now that Amazon has set the record straight, sort of, on where it stands on bitcoin, investors can focus on what they know best, including meme coins. Ethereum-based Shiba Inu is a fan favorite, and it looks like holders of this cryptocurrency could be getting what they want.

Investment platform eToro has been adding cryptocurrency assets fast and furiously. The Shiba Inu community has been waiting for their turn but has remained on the sidelines as the social investment firm has gone in another direction. For instance, eToro in recent days announced the addition of cryptocurrencies Maker and Enjin on its platform, which added insult to injury for SHIB investors.

Shiba Inu has not fallen off of eToro’s radar, however. Now it appears that the investment firm is closer than ever to listing the meme coin. The company announced that it is “on the case to officially list [Shiba Inu] on eToro,” urging the Shib fam to “hang tight.”

Shiba Inu launched a year ago in the wake of the larger meme-coin project Dogecoin. Shiba Inu, which considers itself a “Dogecoin Killer,” recently amassed 600,000 holders, but the price has been caught in the crypto market downdraft.

Coinbase Chatter

Shiba Inu investors are not stopping at eToro, however. They are also looking to leading cryptocurrency exchange Coinbase.com as well as popular trading app Robinhood to recognize and add their favorite meme coin. Coinbase is not averse to listing meme coins and already supports Shiba Inu rival Dogecoin. Coinbase Pro for sophisticated investors intends to list Shiba Inu but those plans hit a snag, resulting in a “temporary delay.”

Meme Coin Listings

Shiba Inu isn’t the only meme coin that trading platforms have their eye on. Baby Doge Coin, whose meme father is Dogecoin, has snagged a listing in BitMart, effective July 28.

For its part, Baby Doge Coin boasts more than 500,000 holders. The project has also been burning its supply, including 250 trillion coins burned in recent days. Nonetheless, the price is down nearly 70% from its all-time high of USD 0.000000005890 reached in early July, as per CoinGecko market data.

Open an account with eToro

Today’s Market Wrap Up and a Glimpse Into Tuesday

Stocks started off the week strong, with all three of the major indices finishing at all-time highs. The gains are an extension of last week’s rally and demonstrate a vote of confidence among investors in corporate America’s earnings results. While the Dow Jones Industrial Average, S&P 500 and Nasdaq were up just fractionally, it was enough to send them all into record territory.

In the cryptocurrency markets, the bitcoin price crossed the USD 40,000 level for the first time in over a month, but the gains slowly faded away. Reports previously suggested that Amazon.com was on the brink of accepting bitcoin payments this year. The e-commerce giant, however, reportedly quashed those rumors despite maintaining that it is looking into crypto.

Stocks to Watch

Tesla’s highly anticipated Q2 earnings are out, and Elon Musk didn’t disappoint. The EV maker surpassed Wall Street estimates on earnings and revenue as Tesla continues to hit on all cylinders. Net income crossed over into the billion-dollar territory, which was a first for the company, while revenue came in at USD 11.9 billion vs. estimates of USD 11.3 billion.

Tesla, which delivered more than 200K vehicles in Q2, said it’s on track to produce its Model Y vehicles in Berlin and Austin, Texas this year. The Cybertruck will also be produced in Austin, Texas “subsequent to Model Y.”

Tesla’s stock is inching higher in extended-hours trading after gaining 2% in the regular session. Tesla also noted it “recorded a bitcoin-related impairment of USD 23 million.” The bitcoin price nosedived 40% in the second quarter of 2021.

F5 Networks is rallying in after-hours trading, with shares up more than 5%. Investors rewarded the technology company for its fiscal Q3 results, which came in better than Wall Street expected.

Cryptocurrency exchange Coinbase saw shares fall close to 2% in extended hours, perhaps in sympathy with bitcoin after the air was let out of the Amazon-fueled rally.

Look Ahead

Major technology companies are queued to report earnings on Tuesday, including Apple, Google parent Alphabet and Microsoft. Snap and Twitter’s quarterly results last week revealed a strong online advertising market that is likely to have benefited Alphabet as well.

On the economic front, Durable Good Orders for the month of June come out at 10 a.m. ET on Tuesday. Wells Fargo economists predict that this indicator increased 2.3% last month fueled in part by orders for Boeing aircraft.

Bitcoin Bulls Take Out Crystal Ball as Price Barrels Toward USD 40K

All is well in crypto land. The bitcoin price is barreling toward USD 40K once again. Meme coin favorite Dogecoin is trading above the psychologically important USD 0.20 level. Ethereum is comfortably above USD 2K. And several major catalysts are in the pipeline, not the least of which Tesla potentially accepting BTC payments once again and e-commerce giant Amazon eyeing bitcoin for payments. Now that the bulls have wrestled back control, market leaders are getting out their crystal balls.

Bitcoin Bull

Bobby Lee, co-founder of China-based cryptocurrency exchange BTCC and CEO of crypto wallet Ballet, is among the biggest bitcoin bulls out there. Lee revealed to Fortune his short-term and long-term bitcoin price predictions.  Lee says he feels “confident” the bitcoin price will cross USD 65K and then continue to rally to beyond USD 250K by year-end 2021.

Lee, who is also the brother of Litecoin founder Charlie Lee, doesn’t believe the bulls will stay in control forever. Next year, he is anticipating a “bear market cycle” in which the bitcoin price will see its value slashed by between 50% and 80% from its peak. The bulls will return, however, every several years.

Lee’s medium-term prediction in which he looks out to 2024-2025 is for the bitcoin price to “cross half a million dollars and might even touch USD 1 million.” From there, he has no problem seeing BTC trading above USD 1 million-2 million in the next 10-15 years.

Short-Term View

In the short term, it appears to be only a matter of time before the bitcoin price is perched above USD 40K once again. Twitter account Stocktwits comprising investors and traders has polled its followers about whether the bitcoin price will cross USD 40K before the end of today. So far, out of nearly 1,400 votes, 57% of respondents are feeling bullish, while the rest are not banking on it.

Source: Twitter

Meanwhile, Galaxy Digital’s head of firmwide research, Alex Thorn, warns that “short term traders should remain cautious” until either the bitcoin price is steadily above USD 40K, or the 200-day moving average is reclaimed. Investors who are stacking sats, however, might want to keep doing what they’re doing.

As the bitcoin price goes higher, the leading cryptocurrency is getting more popular with Americans. According to a recent Gallup poll, 6% of Americans own bitcoin compared to 2% three years ago. Bitcoin ownership among Americans under the age of 50 hovers at 13% vs. 3% of Baby Boomers.

Stock Index Futures Show Poise Ahead of Monday’s Open

The Dow Jones Industrial Average reached a milestone last week that will be tough to top this week. The index added more than 230 points on Friday to finish above 35K for its first time in history. Friday’s performance brings the Dow’s year-to-date gains to 14% and clinches four consecutive days of finishing in the green. It has been a little over three months since the Dow crossed the 34K threshold for the first time as the bulls continue to flex their muscles.

The S&P 500 and tech-heavy Nasdaq were both up more than 1% on Friday.

Stock index futures are basically flat with a slight leaning to the downside on Sunday evening as investors brace for Monday’s trading. Tech earnings are the name of the game this week. The oil price continues to rebound and is moving fractionally higher to above USD 72 per barrel on expectations that supply constraints will persist for the rest of 2021.

Stocks to Watch

Earnings season is in full swing. All eyes will be on Tesla on Monday when it reports its Q2 results after the closing bell. The company already revealed that it had more than 200K deliveries in the quarter, its best ever for a single quarter. Wall Street is largely expecting the EV maker to top analyst estimates with its earnings, which could fuel the stock higher. Tesla chief Elon Musk hinted at Tesla resuming bitcoin payments soon.

Separately, Snap Inc’s value ballooned by more than 23% on Friday on the heels of better-than-expected results on the top and bottom lines. The social media company’s results were fueled by a robust online ads market in addition to more daily active users.

If Snap’s earnings are any indication, good things could be ahead for tech giants Facebook, Google’s Alphabet and Amazon.com, which are on tap to report quarterly results this week.

Look Ahead

An FOMC meeting will unfold on Tuesday and Wednesday. Policymakers are not expected to roil the markets by shaking up monetary policy despite rising inflation, according to Wells Fargo economists. Meanwhile, investors will get the first glimpse into Q2 GDP on Thursday.

Lockheed Martin reports its quarterly results before the opening bell on Monday. Also this week, more earnings are in the pipeline, including the likes of Dow component Boeing.

Amazon Eyes Blockchain and Cryptocurrencies, Hunts Talent

Amazon.com has managed to stay on the sidelines of the cryptocurrency craze so far. The e-commerce giant may have been watching and waiting as the industry has matured rather than taking a trial and error approach with a nascent asset class.

Now it appears that the cryptocurrency industry, with a combined market cap of USD 1.3 trillion, may have come far enough along that Amazon can no longer ignore it. Amazon has placed a job ad for a digital currency and blockchain product lead. The company is looking to build out its “digital currency and blockchain strategy and product roadmap,” according to the ad.

180-Degree Turn

The new hire will be part of “The Amazon Payment Acceptance & Experience Team.” This suggests that the company is just as interested in building out infrastructure for payments as it is for the blockchain. If Amazon decides to accept cryptocurrencies such as bitcoin for payments, it would be a 180-degree turn from its current policy.

An Amazon spokesperson told FX Empire,

“We’re inspired by the innovation happening in the cryptocurrency space and are exploring what this could look like on Amazon. We believe the future will be built on new technologies that enable modern, fast, and inexpensive payments, and hope to bring that future to Amazon customers as soon as possible.”

On social media, the response was mostly that of users speculating that if Amazon decides to support bitcoin or other cryptocurrencies for payments, it would be bullish for the market. There are millions of sellers on Amazon’s marketplace, and adding crypto payments could bring the industry another step closer to widescale adoption. Separately, PayPal already supports bitcoin and other major cryptocurrencies for online payments.

The AWS Effect

The new strategy could have something to do with a fresh leadership style. In early July, Amazon experienced a change at the helm when Jeff Bezos stepped aside and Andy Jassy was named CEO.  Jassy helped to make Amazon Web Services (AWS) into what it is today. It is on AWS that Amazon Managed Blockchain, which uses Hyperledger Fabric and Ethereum, already resides.

Amazon has a market cap of USD 1.8 trillion and its stock is trading within a stone’s throw of its all-time high.

Jack Dorsey Tips Hand to Bitcoin’s Place at Twitter

Jack Dorsey is a known bitcoin bull. His payments company Square has an entire division dedicated to building on the Bitcoin blockchain and funding projects, Square Crypto. And he recently launched an initiative to make bitcoin more DeFi friendly. When it comes to his other company, Twitter, Dorsey has given the cryptocurrency a bitcoin emoji, which has left users wondering if there is more to come.

On Twitter’s earnings call on Thursday, Dorsey tipped his hand to how bitcoin fits into the future of the social media platform. He did so shortly after fellow billionaire Elon Musk pressed him at “The B Word” event on whether Twitter would accept bitcoin as a payment method from advertisers, which Dorsey danced around a bit. Musk may have been trying to take the focus off Tesla and when it would resume accepting bitcoin payments.

On the earnings call, Dorsey explained how Twitter is building out an ecosystem focused on news, conversation and payments. Next, the tech entrepreneur identified a trio of themes that are relevant to the company and its shareholders:

  • Artificial intelligence
  • Decentralization
  • “The internet, finally, having access to a global native currency in bitcoin.”

Internet Money

Dorsey is looking toward a future in which the internet has a native/global currency through which Twitter could accelerate the development of offerings including “Super Follows, e-commerce, subscriptions [and] Tip Jar.”

While Facebook has attempted to follow a similar path with its Diem stablecoin project, bitcoin is the best choice, according to Dorsey, and is where Twitter will be focusing its efforts. The Twitter chief touted bitcoin for lending itself to speed, innovation and use cases.

Bitcoin Price

While most investors are focused on what bitcoin has done lately, that can leave them depressed. The BTC price has surrendered much of its gains year-to-date. A wider lens, however, provides greater insight into the cryptocurrency’s performance compared to other asset classes.

As per data provided by Kraken’s Dan Held, bitcoin has outperformed rival store of value asset gold as well as the broader stock market over the past decade hand over fist.

For now, the bitcoin price is holding above USD 32K, and investors are crossing their fingers about moving it forward over the weekend.

Today’s Market Wrap Up and a Glimpse Into Friday

Stocks managed to move modestly higher with all three major indices extending recent gains. The S&P 500, Dow Jones Industrial Average and Nasdaq all finished the day with fractional gains. Tech stocks Amazon and Facebook were each up by more than 1% and helped fuel the Nasdaq higher.

At this rate, stocks are on track for weekly gains after a bumpy start on Monday. Weaker than expected jobless claims data weighed on sentiment early on but it wasn’t enough to hold stocks down.

 

Investors have the Delta variant in the back of their minds, but they are feeling emboldened by the strong profits being reported by corporate America.

Stocks to Watch

Domino’s Pizza was one of the biggest winners of the day. The food-delivery chain saw its shares soar by 15% to a fresh all-time high. Domino’s Q2 results exceeded analyst expectations on the top and bottom lines.

The company has enhanced its menu with new items that are resonating with customers, especially as consumers spend more time at home. Domino’s plans to keep the momentum going with a USD 1 billion share buyback program.

The semiconductor sector stayed under pressure all day and the selling isn’t over. Intel is down 1.5% in after-hours trading after the company reported earnings. Investors fled on the heels of Intel’s weak Q3 sales outlook amid heightened competition in the space. Meanwhile, Texas Instruments shaved 5% off its value today due to a similarly weak sales forecast.

Twitter shares are up 5% in after-hours trading after Jack Dorsey’s company reported better than anticipated Q2 results. Among the surprises was Twitter’s revenue of USD 1.19 billion, up 74% YoY. Twitter grew the number of monetizable daily active users 11% YoY to 206 million.

Look Ahead

Dow stocks American Express and Honeywell are on tap to report their quarterly earnings on Friday, as is oil company Schlumberger. Shares of Schlumberger are trading 1% higher in extended-hours ahead of the company’s earnings results, which are expected before the opening bell on Wall Street.

The oil price has been volatile of late and USD 100 oil is looking more and more like a long shot. Barclays analysts say that while USD 100 oil isn’t off the table, it would be a stretch. Instead, they are predicting Brent oil to hover at an average of USD 69 per barrel and WTI at USD 67.

DocuSign’s Stock Is Up 11% in July So Far

DocuSign, a modern-day technology company that supports electronic signatures, has been on a bull run this summer. The company also operates in the cloud and competes with the likes of Adobe. DocuSign’s slice of the digital signature pie is roughly 70% of the USD 25 billion market. The stock has proven to be more than just a one-hit-wonder whose business boomed during the pandemic.

DocuSign’s Stock

DocuSign shares have climbed 11% higher in the month of July alone. Digitization is only becoming more integrated into the lives of consumers and businesses alike. The role that digital agreements play in this paradigm, especially since COVID-19, could gain even more traction, which stands to benefit DocuSign even further. DocuSign performed especially well during the lockdowns when face-to-face meetings were replaced by remote working.

Pete Najarian, co-founder of Market Rebellion, pointed out some bullish buying in DocuSign options contracts. In particular, there is buying in the USD 310 calls expiring on July 23 compared to the current price of USD 306.70.

Meanwhile, DocuSign is one of the holdings in the ARK Innovation ETF. The stock ranks as the No. 14 holding, with a 2.75% weighting. DocuSign trades alongside high-profile companies in this fund, including the likes of Tesla, which is the top holding with a 10.14% weighting, payments platform Square with 5.12% and cryptocurrency exchange Coinbase with 4.27%.

While ARK still holds DocuSign, it has trimmed its position of late. Last month, Cathie Wood’s firm unloaded more than 107K DocuSign shares with a price tag of approximately USD 26 million. ARK Invest sold when the price was hovering at slightly above USD 240.

Future Outlook

DocuSign CEO Dan Springer was recently featured on The Drill Down podcast where he discussed the future direction of the company. Springer explained how DocuSign boasts more than 1 million customers and more than a billion people have signed their names on documents using the platform.

He says there was an acceleration in the company’s growth during the COVID-19 year. Even the U.S. SEC recently paved the way for companies filing their 10-K and 10-Q documents to do so using electronic signatures.

The company is looking to increase the wide-scale adoption of e-signatures and bolster the use cases for its technology. DocuSign has also moved into the cloud with its DocuSign Cloud offering, where it handles the management, storage and security of documents in addition to signatures.

Springer says that signatures will continue to be the “dramatic majority” of what drives the company’s business in the coming years. Nonetheless, the next chapter will be in the “agreement cloud,” he added.

Now Is the Time to Build Beyond DeFi on Ethereum: Vitalik Buterin

Ethereum has come a long way since it launched in 2015. The network has been behind some of the biggest crazes in the cryptocurrency industry, from ICOs to CryptoKitties to non-fungible tokens (NFTs) and decentralized finance (DeFi).

While ICOs in their original form have fallen by the wayside, the DeFi segment, in particular, has taken the financial industry by storm. DeFi gives users a way to generate passive income through activities such as lending and staking and bolster their returns.

The total value locked (TVL) in DeFi currently hovers at USD 99 billion, according to DeFi Llama. The Ether price has benefited from the rise of DeFi, with the price soaring 657% over the past 12-month period.

DeFi and Beyond

Vitalik Buterin, the co-founder of Ethereum, believes that Ethereum’s use cases could go far beyond financial applications, according to his recent keynote speech at the Ethereum Community Conference 4 (EthCC) event in Paris. He pointed to DeFi protocols such as Compound, Aave and Uniswap, for example, that have all experienced great success. Vitalik is a fan of DeFi, though he is quick to point out:

‘But this isn’t all that Ethereum was trying to do.”

Source: YouTube/Grand Amphi Theatre

Vitalik admits that “price is nice,” but he is quick to add that it should “only ever come as a consequence of utility.” He wants the common denominator among Ethereum users to be utility, not just price.

The reasons why financial applications have thrived on Ethereum are two-pronged, according to Vitalik. First, centralized technology in finance is abysmal. And secondly, fees are so high, a problem that is being solved.

Considering that Ethereum is addressing fees and scalability with the emergence of sharding and Eth 2.0, he says that now’s the time to start building and go beyond financial applications.

NFTs R’ Us

NFTs, which are digital assets containing a component such as art, music, video, etc., are helping Vitalik’s cause by expanding Ethereum’s use cases beyond finance. These digital tokens have caught on like wildfire and have helped to attract outsiders to the cryptocurrency and blockchain space. Vitalik said,

“NFTs are interesting, they’re this interesting cultural phenomenon. And they really have attracted a different kind of people to the Ethereum space that are interested more in the art side than in the finance side.”

Vitalik wants to bring Ethereum further beyond DeFi. He defines the near-term goals as something that drums up enough support in the Ethereum community and “something that is useful for people to do.”

Today’s Market Wrap Up and a Glimpse Into Thursday

This rally may have legs after all. Stocks extended their gains from yesterday’s monstrous rebound, with all three major indices finishing the day in the green. The S&P 500 was up fractionally and inched closer to its all-time high. The Dow Jones Industrial Average gained almost 300 points while the tech-heavy Nasdaq was up nearly 1%.

Corporate America has taken the attention away from the one-two punch of the Delta variant and inflation, as the earnings parade continues to roll on.

Oil is trading above the USD 70 threshold once again after gaining close to 5% on the day. The VanEck Vectors Oil Services ETF climbed higher by 4.5% and is up in extended-hours trading as well. This ETF has also rebounded 10% since its low point on Monday.

Elon Musk and Jack Dorsey were in the spotlight as they participated in “The B Word” event about bitcoin. Musk tipped his hand to his space travel company, SpaceX, owning bitcoin, as does he and Tesla. The attention did little for the Tesla stock price today but bitcoin is having a nice run.

Stock futures are little changed in extended-hours trading.

Stocks to Watch

AT&T will report its Q2 results before the opening bell. The company on Wednesday announced plans to offload Vrio, its Latin American DirecTV arm amid a USD 4.6 billion impairment charge. The telecom giant sold the business to Grupo Werthein.

US Steel advanced 4.5% on Wednesday and is higher in after-hours trading. Since the bottom fell out of the stock market on Monday, US Steel shares are up 12% from their lowest point. Steel prices have been hovering at record highs amid supply constraints, conditions that are expected to persist.

Look Ahead

Existing Home Sales for June come out at 10 a.m. ET. This indicator has been on the decline for four straight months but still hovers at a solid annual rate of 5.8 million units. Wells Fargo economists predict sales moved higher last month to a rate of 6.06 million units thanks to “demand for extra space” coupled with low rates.

The Leading Economic Index (LEI) for June also comes out on Thursday. In light of a “mixed bag of economic data” in recent weeks, Wells Fargo economists forecast that this indicator increased 0.8% last month.

 

Chipotle Mexican Grill Shares Flirt With Fresh All-Time High

Restaurant stocks are relevant once again, and Chipotle Mexican Grill is proof. The stock is up nearly 13% and even touched on a new all-time high of USD 1,774 after the restaurant chain reported better-than-expected earnings. The results are evidence that consumers have once again returned to the dining scene, and from the looks of it, the entire sector is winning.

Even though Chipotle’s stock touched on a new record, that doesn’t mean that there is no more runway left for gains. One Wall Street bull who believes that Chipotle has more room to run is Cowen analyst Andrew Charles. He reportedly raised his price target from USD 1,850 to USD 2,080 on the stock.

The gains have spilled over into the broader restaurant sector, with the following stocks rallying today too:

  • The Cheesecake Factory is up 4%
  • Brinker International is up 4%
  • Red Robin Gourmet Burgers is up nearly 7%

Let the Good Times Roll

Chipotle beat Wall Street estimates on both the top and bottom lines, with revenue of USD 1.9 billion and EPS of USD 7.46. Same-store sales, which reflect restaurants that have been opened for a year or longer, soared more than 31%.

Investors want to know if the good times will continue, even in light of the Delta variant that threatens to throw a wrench into the easing of the lockdowns. Based on anecdotal evidence, the momentum will continue. Chipotle is forecasting “comparable restaurant sales growth in the low to mid-double digits range” for Q3.

The company also plans to open another 200 locations or so, which is a vote of confidence in the state of the consumer. Chipotle has added some menu items and also hiked prices to help offset higher costs.

Carrying a Torch

Chipotle is milking the spotlight for all its worth. The company has introduced “gold foil wrapped burritos” in honor of the Tokyo Olympics and the Americans who are competing in the games.

The gold-wrapped burrito will be tied to digital orders. The restaurant chain’s digital segment experienced a 10.5% jump in sales last quarter even as customers returned for the dine-in experience. Chipotle’s Olympics promotion begins on July 23. Chipotle also gave away up to USD 1 million in free burritos during the NBA Finals.