Shares of Amazon found themselves under significant pressure after the company released its second-quarter earnings report.
Amazon reported revenue of $113.1 billion, which was lower than analyst estimates. The company’s GAAP earnings of $15.12 per share exceeded analyst expectations but were not sufficient enough to provide support to Amazon shares.
In Q3 2021, Amazon expects to report revenue of $106 billion – $112 billion, which means that Amazon’s revenue will decrease compared to the second quarter. The company’s operating income is projected to be between $2.5 billion and $6 billion compared to $6.2 billion in Q3 2020.
The market was clearly shocked by the company’s quidance for the next quarter, and the stock opened with a big gap down. The stock has made an attempt to gain ground as some speculative traders decided to buy the dip, but it failed to develop upside momentum.
What’s Next For Amazon Stock?
Investors and traders got used to strong reports from Amazon so the soft Q3 2021 guidance dealt a major blow to the stock. Analysts expect that the company will report earnings of $55.86 per share in 2021 and $72.38 per share in 2022, so the stock is trading at roughly 46 forward P/E.
Amazon has always enjoyed rich multiples as investors believed in its growth story, and it remains to be seen whether one report will change the market’s view.
It should be noted that the report highlights potential problems for all leading tech companies as they may face slower growth in case the world succeeds in its battle against the coronavirus pandemic and gets back to normal life.
It’s too early to say that Amazon’s growth story is under question, and the stock will surely attract opportunistic buyers. However, it remains to be seen whether support from such buyers will be sufficient enough to push Amazon shares back to recent highs in the upcoming trading sessions.
S&P 500 futures are moving lower in premarket trading as Amazon‘s disappointing quarterly results put pressure on tech stocks.
Amazon released its second-quarter report yesterday, after the market close. The company reported revenue of $113.1 billion and GAAP earnings of $15.12 per share, missing analyst estimates on revenue and beating them on earnings.
The market focused on the disappointing revenue performance and weak third-quarter guidance as Amazon forecasted revenue of $106 billion – $112 billion in Q3 2021.
Currently, the stock is down by about 7% in premarket trading, and Nasdaq futures are down by roughly 1%. It remains to be seen whether traders will rush to buy the dip in Amazon shares and other tech stocks ahead of the weekend or choose to take some profits off the table near record highs for S&P 500 and Nasdaq.
Personal Income Increased By 0.1% In June
U.S. has just released Personal Income and Personal Spending reports for June. The reports indicated that Personal Income increased by 0.1% month-over-month in June compared to analyst consensus whcih called for a decline of 0.3%. Personal Spending grew by 1% compared to analyst consensus of 0.7%.
Today, traders will also have a chance to take a look at the final reading of Consumer Confidence report for July. Analysts expected that Consumer Confidence declined from 85.5 in June to 80.8 in July.
WTI Oil Settles Above The $73 Level As Traders Shrug Off Virus Worries
WTI oil managed to get above the $73 level and continues to move higher as traders bet that demand for oil will continue to increase despite the recent surge in the number of new COVID-19 cases which was caused by the Delta variant of coronavirus.
Recent data indicates that crude inventories are moving lower, which is bullish for oil. Today, oil-related stocks will have a good chance to continue their rebound after strong results from Exxon Mobil and Chevron.
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.
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.
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.
Banks charged 12 bn in overdraft fees, a fortune in atm fees, a fortune in checking account fees. But you keep going after crypto where saving and money transfer is a fraction of banks. Good job @SenWarren You really don’t seem so progressive to me.
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.
The e-commerce leader for physical and digital merchandise, Amazon, is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.
The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has always beaten earnings per share (EPS) estimates in the last four quarters.
Amazon’s better-than-expected results, which will be announced on Thursday, July 29, would help the stock hit new all-time highs. Amazon shares have surged more than 10% so far this year.
“We expect Amazon (AMZN) to beat the consensus estimates for revenues and earnings. The company has reported better than expected revenue and earnings figures in each of the last four quarters. In the past year, due to the pandemic, people turned to e-commerce and online marketplaces for their day to day needs which converted into a high growth in revenue for the company,” noted analysts at Trefis.
“The momentum continued in Q1 2021 as revenue grew by 44% for the quarter. The company also continues its expansion into different segments. Our forecast indicates that Amazon’s valuation is $4241 per share, which is 15% above the current market price of $3703.”
Amazon Stock Price Forecast
Thirty-two analysts who offered stock ratings for Amazon in the last three months forecast the average price in 12 months of $4,332.90 with a high forecast of $5,500.00 and a low forecast of $3,775.00.
The average price target represents a 19.48% change from the last price of $3,626.39. All of those 32 analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.
Morgan Stanley gave the stock price forecast of $4,500 with a high of $5,300 under a bull scenario and $2,700 under the worst-case scenario. The firm gave an “Overweight” rating on the e-commerce leader’s stock.
“Amazon’s high-margin businesses continue to allow Amazon to drive greater profitability while still continuing to invest (last-mile delivery, fulfillment, Prime Now, Fresh, Prime digital content, Alexa/Echo, India, AWS, etc). Amazon Prime membership growth drives recurring revenue and a positive mix shift. Cloud adoption hitting an inflection point. Advertising serves as a key area for both further growth potential and profitability flow-through,” noted analysts at Morgan Stanley.
Several other analysts have also updated their stock outlook. BofA lowered the price objective to $4350 from $4360. Credit Suisse raised the target price to $4850 from $4000. Bernstein lifted the target price to $4200 from $4000.
Bitcoin has seen meteoric growth in the past 24 hours as fueled by news from Amazon.
Despite the uptrend which stirred a growth of up to 15% in the latest run, the market bears rejected a push-up beyond the $40,000 resistance point.
Ethereum is also seeing a rejuvenation as it looks to breach the $2,500 price level.
Unique fundamentals unraveled in the past days have stirred a rejuvenation in the cryptocurrency industry. For a market that has been begging for a bullish awakening in months, the 8.65% in the global crypto market cap to $1.53 Trillion is perhaps enough to suggest a major rally may be brewing. This, however, is dependent on how Bitcoin and Ethereum can sustain their current growth trends.
Bitcoin Sees Impressive Price Growth and a Simultaneous Rejection
The premier cryptocurrency is currently changing hands at $38,282.8, up 9.84% according to data from CEX.IO the price feed. The news that Amazon is looking to hire a crypto expert to help chart its pursuit of accepting Bitcoin payments can be tipped as a major cause for this recent growth.
With the institutional backing which has seen the likes of Tesla, MicroStrategy, and recently SpaceX places a Bitcoin holding on their balance sheets set to be complemented with the Amazon push, market bulls went on an unbridled accumulation, pushing the price to a weekly and monthly high of $39,280.42.
The uptrend as seen on the BTC/USD 4h chart is attaining the peak at the current price level, suggesting a bear action that is repressing the price growth from crossing the $40,000. The RSI and MACD indicators are still showing positive signs of growth, and while we may see a little retracement, crossing the $40,000 resistance point remains the short-term target for investors.
Ethereum Maintaining a Steady Growth
At a current price of $2352.31 and a growth rate of 8.01% in the past 24 hours, Ethereum’s uptrend correlation with BTC was reiterated. However, unlike Bitcoin which has started seeing a gradual bear action, Ethereum bulls are pushing the coin to a new price point, such as has never be seen in the past month.
With prices trading above the short-term Moving Average, a sustained buyup can push Ethereum to the $2,500 to $3,000 price level in the coming weeks.
Inox, however, said the report was “factually incorrect” and there were no discussions between the company and Amazon India.
Shares of the Mumbai-headquartered company jumped as much as 14.3% to 346.20 rupees after the report, but pared some gains to last trade 6% up.
Amazon India is planning to expand its content streaming platform Prime Video and is evaluating three to four deals, according to the report. (https://bit.ly/3iUpqgS)
India has been a hotbed of competition for companies like Amazon, Netflix Inc and Walt Disney Inc, all of which have been investing significantly to ramp up original streaming content in regional languages.
The e-commerce giant in January had launched a lower priced mobile-only subscription plan for its video streaming service in India, undercutting a similar plan by Netflix to woo price-sensitive subscribers.
Prime Video had marked its foray into Indian film production in March and counts the south Asian nation as one of its fastest growing markets.
Inox, India’s second-largest multiplex chain, has reported a net loss for at least five consecutive quarters since March 2020, when a nationwide coronavirus lockdown was imposed.
Amazon India did not immediately respond to a request for comment.
(Reporting by Shivani Singh in Bengaluru; Editing by Ramakrishnan M.)
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.
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.
Jeff Bezos has offered to cover $2 billion in NASA cost in a bid to land the lunar lander contract for his space company, Blue Origin.
Bezos Wants To Cover NASA Costs In ExchangAmazoe For A Contract
The CEO of Blue Origin, Jeff Bezos, has offered to cover roughly $2 billion of National Aeronautics and Space Administration (NASA) costs in exchange for the contract to build a lunar lander to land astronauts on the moon. NASA had already awarded the contract to Elon Musk’s SpaceX, but Bezos is encouraging them to keep the options open and the competition alive.
He stated that Blue Origin is offering to waive payments of up to $2 billion from NASA in the current and next two government fiscal years if they are awarded the contract. The CEO further added that Blue Origin is set to fund its own pathfinder mission to low-Earth orbit. In exchange for waiving up to $2 billion in costs, NASA would grant Blue Origin a fixed-price contract.
Bezos told NASA in an open letter that the offer is not a deferral but an outright and permanent waiver of those payments. He believes that the offer would create room for government appropriation actions to catch up.
NASA Should Promote Competition
The contract was awarded to Elon Musk’s SpaceX in April to build a $2.89 billion the next crewed lunar lander under NASA’s Human Landing Systems program. The government agency studied SpaceX, Blue Origin and Dynetics before choosing Elon Musk’s company for the contract.
However, Bezos doesn’t feel that is the best option. “Instead of this single-source approach, NASA should embrace its original strategy of competition,” he added.
Dow component Microsoft Corp. (MSFT) reports fiscal Q4 2021 earnings after Tuesday’s closing bell, with analysts forecasting a profit of $1.92 per-share on $44.3 billion in revenue. If met, earnings-per-share (EPS) will mark a 31% profit increase compared to the same quarter last year. The stock sold off nearly 3% in April despite beating Q3 expectations by wide margins and raising Q4 guidance. Buyers returned in June, lifting the tech giant into a series of all-time highs.
Overbought Signals Abound
Microsoft should post exceptionally strong results, as usual, but the stock has gained nearly 19% in the last seven weeks, setting off technically overbought signals. In addition, Mr. Softee has been named as a target by Biden administration trust-busters, even though it has avoided the broad swath of political controversy, unlike Facebook Inc. (FB) and Amazon.com Inc. (AMZN). Even so, its huge footprint has made it nearly impossible for small companies to compete, especially in the cloud computing segment.
Citigroup analyst Tyler Radke raised the firm’s target to $378 last week, noting “We expect to see a strong finish to Microsoft’s FY21 with a combination of recovering IT budgets, an uptick in expected reseller growth, signs of reacceleration in consumption models and slightly higher PC numbers vs. 3 months ago. The general numbers set-up looks attractive with conservative guidance against easy compares. We continue to like MSFT best in mega-cap software, with multiple levers for sustained DD growth at scale and significant room to run”.
Wall Street and Technical Outlook
Wall Street consensus is pristine, now yielding a ‘Buy’ rating based upon 21 ‘Buy’, 3 ‘Overweight’, and 2 ‘Hold’ recommendations. No analysts are recommending that shareholders underweight or sell positions. Price targets currently range from a low of $256 to a Street-high $378 while the stock will open Monday’s session about $11 below the median $300 target. Upside after the report appears limited, given the proximity to the median target and strong gains since June.
Microsoft cleared 16-year resistance in 2016 and entered an historic trend advance that stalled at 190 in February 2020. It returned to that level in May after a 58-point decline, ahead of a breakout that ended at 233 in September. The stock cleared that barrier in January 2021 and eased into a rising channel that broke to the upside last week. While this marks impressive strength, it also highlights a one-sided market that’s unlikely to persist in coming weeks.
Dogecoin made an attempt to settle above $0.2350 but pulled back towards $0.22 while Bitcoin rallied towards the $40,000 level.
Bitcoin gained strong upside momentum after reports indicated that Amazon may accept bitcoin payments by the end of this year. Not surprisingly, speculative traders rushed to buy Bitcoin and other cryptocurrencies after these reports emerged. Ethereum made an attempt to settle above $2,400 while XRP tested $0.6750.
While Amazon news have certainly served as the main catalyst for the recent rally, it looks that short covering has also played a role in this rally. Some traders rushed to short Bitcoin and other cryptocurrencies when Bitcoin made an attempt to settle below the key support level at $30,000. Bitcoin failed to gain downside momentum and began to rebound, so such traders rushed to exits at a time when bullish reports about Amazon’s plans were released.
Dogecoin is currently trying to stay above $0.22. RSI remains in the moderate territory so there is plenty of room to gain additional upside momentum in case the right catalysts emerge.
The nearest material resistance level for Dogecoin is located at $0.2250. If Dogecoin gets back above this level, it will move towards the resistance at $0.23.
A successful test of the resistance at $0.23 will open the way to the test of the resistance level which is located at the 50 EMA at $0.2385. In case Dogecoin gets above the 50 EMA, it will head towards the resistance at $0.25.
On the support side, the nearest support level for Dogecoin is located at $0.2150. If Dogecoin manages to settle below this level, it will move towards the support at the 20 EMA at $0.2040. A successful test of the support at the 20 EMA at $0.2040 will open the way to the test of the psychologically important support level which is located at $0.20.
The cryptocurrency market has been gaining adoption from corporate entities in recent years, and it now seems it is time for Amazon to join the list.
Amazon To Start Accepting Bitcoin Soon
Online retail giant Amazon is reportedly ready to start accepting Bitcoin payments before the end of the year. This is according to a report by London’s City A.M outlet, citing an insider. According to the report, Amazon will start accepting Bitcoin as a means of payment soon.
The retail giant recently posted saying that it wants to hire a cryptocurrency and blockchain lead. Amazon is looking to explore areas such as blockchain technology, cryptocurrency, central bank digital currencies (CBDCs) and distributed ledger.
The source told City A.M that the job post is a sign of bigger things from Amazon. She stated that the company is getting ready to set up cryptocurrency payment solutions at some point in the future. It is something the company is committed to achieving, she added.
The insider revealed that it starts with Bitcoin as it is the key first stage of the cryptocurrency project. The directive is apparently coming from Jeff Bezos himself. After establishing a strong Bitcoin payment option, Amazon will look to integrate other cryptocurrencies. “Ethereum (ETH), Cardano (ADA) and Bitcoin Cash (BCH) will be next in line before they bring about eight of the most popular cryptocurrencies online,” the insider added. Amazon has been working on the functionality since 2019, and it could soon come to fruition, she added.
Amazon To Develop Its Native Token
The second stage of the project is for Amazon to develop its own native token. The source stated that the company is planning to start developing its native token next year after establishing its cryptocurrency payment gateway.
She added that after a year of experiencing cryptocurrency payments, it is looking increasingly possible that the company is heading towards tokenization. The token will allow people to buy goods on Amazon and pay for other services. It will also come with a loyalty scheme to boost adoption.
Bitcoin has been performing excellently over the past few days. BTC is currently up by 12% over the past 24 hours and is now trading above the $38k mark for the first time in weeks. The rally has extended to other cryptocurrencies, with Ether also closing in on the $2,500 resistance point.
TESLA: The California-based electric vehicle and clean energy company is expected to report its second-quarter earnings of $0.94 per share, which represents year-over-year growth of over 113% from $0.44 per share seen in the same quarter a year ago.
The high-performance electric vehicle manufacturer would post revenue growth of about 90% to around $11.4 billion. The electric vehicle producer has beaten earnings three times in the last four quarters.
“A double-fly-wheel. We believe Tesla can leverage its cost leadership in EVs to aggressively expand its user base, over time generating a higher % of revenue from recurring/high-margin services revenue. Services drives the upside. We forecast Tesla’s network services EBITDA as a % of total TSLA EBITDA to reach 11% by 2025, ~18% by 2030 and ~35% by 2040. Tesla Service revenue includes automated driving, infotainment, upgrades, supercharging, maintenance, telematics, etc,” noted Adam Jonas, equity analyst at Morgan Stanley.
“Valuation supportive vs. tech. Including Network Services, Energy & Insurance to our core auto fcst, at $900 Tesla trades at ~29x EV/EBITDA in 2025 and ~6x 2025 sales. Expensive vs. auto but not vs. software/tech comps.”
LOCKHEED MARTIN: The Bethesda, Maryland-based global security and aerospace company is expected to report its second-quarter earnings of $6.53 per share, which represents year-over-year growth of about 13% from $5.79 per share seen in the same quarter a year ago.
The world’s largest defense contractor would post revenue growth of over 4% to around $16.9 billion. It is worth noting that the aerospace company has beaten earnings in all last eight quarters.
IN THE SPOTLIGHT: GOOGLE (ALPHABET), MICROSOFT, APPLE
GOOGLE (ALPHABET): The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its second-quarter earnings of $19.33 per share, which represents year-over-year growth of about 90% from $10.13 per share seen in the same quarter a year ago.
The Mountain View, California-based internet giant would post revenue growth of more than 45% to around $56.16 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 43% in the last four quarters.
Alphabet’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Alphabet shares surged more than 50% so far this year. On Friday, the stock closed at a fresh record high at $2,660.30, up 3.57%.
MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal fourth-quarter earnings of $1.91 per share, which represents year-over-year growth of over 30% from $1.46 per share seen in the same quarter a year ago. The world’s largest software maker would post revenue growth of over 15% to around $44.1 billion, up from the $38.03 billion a year earlier.
“Channel work and our CIO survey point to building momentum across the Cloud, Hybrid and On-premise portfolio, which should power a solid Q4. While investors seek reassurances margin expansion continues into FY22, our model suggests durable high-teens EPS growth and upside in the shares,” noted Keith Weiss, equity analyst at Morgan Stanley.
Microsoft’s better-than-expected results, which will be announced on Tuesday, July 27, would help the stock hit new all-time highs. Microsoft shares have surged more than 30% so far this year.
APPLE: The consumer electronics giant would post its fiscal third-quarter earnings of $1.01 per share, which represents year-over-year growth of over 55% from $0.65 per share seen in the same quarter a year ago.
The iPhone manufacturer would post revenue growth of over 20% to around $73.3 billion up from $59.69 billion a year earlier. It is worth noting that the company has beaten earnings in all last eight quarters.
The world’s largest online social network is expected to report its second-quarter earnings of $3.04 per share, which represents year-over-year growth of about 70% from $1.80 per share seen in the same quarter a year ago. The Menlo Park, California-based social media conglomerate would post revenue growth of over 49% to around $28.0 billion.
“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.
“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~33% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$18bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~39% CAGR (2019-2022).”
The eCommerce leader for physical and digital merchandise is expected to report its second-quarter earnings of $12.24 per share, which represents year-over-year growth of about 19% from $10.3 per share seen in the same quarter a year ago.
The Seattle, Washington-based multinational technology giant would post revenue growth of about 29% to around $115 billion. The company has beaten earnings per share (EPS) estimates at all times in the last four quarters.
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.
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.
The Australian Competition and Consumer Commission (ACCC), which previously slapped the world’s toughest content licencing rules on Facebook Inc and Alphabet Inc’s Google, said it was now looking at retail as part of a wider examination of so-called Big Tech.
“Online marketplaces are an important and growing segment of the economy so it is important that we understand how online marketplaces operate and whether they are working effectively for consumers and businesses,” ACCC Chair Rod Sims said in a statement.
“We want to be sure that the rules that apply to traditional retail are also complied with in the online context.”
The ACCC would take submissions until mid-August with a final report due in March 2022, the regulator said.
An Amazon spokesperson said the company looked “forward to engaging with the ACCC on these important topics in the coming months”, while an eBay representative was not immediately available for comment.
The Australian regulator said it would examine the relationships between large online markets and third-party sellers and shoppers, including competition impacts and handling of data, complaints and reviews.
Amazon has not reached the market dominance in Australia since launching in 2017 that it experiences elsewhere, but still doubled sales in calendar 2020, the ACCC said.
Overall, Australian online purchases jumped 57% in 2020 for a record $50.5 billion spend amid a series of coronavirus lockdowns, it added.
The ACCC said it had received wide-ranging complaints, including the “quality of goods sold on marketplaces, the timeliness of payment remittance to sellers, how goods are put on display on marketplaces, and the level of support provided by marketplaces to consumers when disputes arise”.
The ACCC has been conducting a series of investigations in recent months as part of a broader Digital Platform Services Inquiry.
($1 = 1.3609 Australian dollars)
(Reporting by Byron Kaye; editing by Jane Wardell and Michael Perry)
The S&P 500 technology sector index ended a four-day winning streak. Earlier this week, investors’ favor for heavyweight growth stocks pushed the S&P 500 and the Nasdaq to record highs.
The S&P 500 energy sector index fell more than 1% and tracked a drop in crude prices on expectations of more supply after a compromise agreement between leading OPEC producers.
Fresh data showed the number of Americans filing new claims for unemployment benefits fell last week to a 16-month low, while worker shortages and bottlenecks in the supply chain have frustrated efforts by businesses to ramp up production to meet strong demand for goods and services.
Federal Reserve Chair Jerome Powell told lawmakers he anticipated the shortages and high inflation would abate. Yet many investors still worry that more sustained inflation could lead to a sooner-than-expected tightening of monetary policy.
“People are very nervous and concerned about inflation, tax rates and the (2022 midterm) election. Those three things are very much on people’s minds,” said 6 Meridian Chief Investment Officer Andrew Mies, describing recent phone calls with his firm’s clients.
Unofficially, the Dow Jones Industrial Average rose 54.52 points, or 0.16%, to 34,987.75, the S&P 500 lost 14.29 points, or 0.33%, to 4,360.01 and the Nasdaq Composite dropped 101.82 points, or 0.7%, to 14,543.13.
Morgan Stanley dipped as much as 1.2% after it beat expectations for quarterly profit, getting a boost from record investment banking activity even as the trading bonanza that supported results in recent quarters slowed down.
Second-quarter reporting season kicked off this week, with the four largest U.S. lenders – Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co – posting a combined $33 billion in profits, but also highlighting the industry’s sensitivity to low interest rates.
Blackstone said late on Wednesday it would pay $2.2 billion for 9.9% stake in American International Group’s life and retirement business. AIG and Blackstone both rallied.
Johnson & Johnson dipped after it voluntarily recalled five aerosol sunscreen products in the United States after detecting a cancer-causing chemical in some samples.
If you are becoming interested in trading Options, you need to learn the basics about Options and how to trade them before jumping in with both feet. Options are very different from stocks and there are more factors that go into the pricing.
Many view trading Options as a get-rich-quick scheme while others think of it as gambling. I am here to say it is neither. What I will say, is that you have to know the rules before you begin trading if you want to be successful. Keep reading as I cover some little-known basic facts that, if you are new, will surely spark your interest.
There are Options on More Than Just Stock
Most people hear of options and think they only apply to stock. In reality, you can trade options on futures, Forex, Bonds, and even the index themselves. Most assets have options available.
The OCC option symbol can consist of up to 4 parts:
Root symbol of the underlying stock or ETF, padded with spaces to 6 characters
Strike price, as the price x 1000, front padded with 0s to 8 digits
Expiration date, 6 digits in the format YY/MM/DD
Option type, either P or C, for put or call
AAPL: AAPL210723C145 – This symbol represents a call on Apple, expiring on 23 Jul 2021, with a strike price of $145.
AMZN: AMZN210917P3700- This symbol represents a put on Amazon, expiring on 17 Sept 2021, with a strike price of $3,700.
Buying an Option
If you own an option, you are not obligated to buy the underlying instrument; when you buy a Call Option, you have the right to BUY stocks at your option’s strike price. You can also sell the option itself before expiration.
Similarly, when you buy a Put Option, you have the right to SELL stocks at your Option’s strike price through exercising it but like Call Options you can sell the put contract as well before expiry.
Selling an Option
First, you can sell an option you don’t own stock in! However, if you sell a Call Option, you are obligated to deliver the underlying asset at the strike price at which the Call Option was sold if the buyer exercises his or her right to take delivery. If they do not exercise then you keep the premium you sold the option for. Put Options are the reverse, if you sell a Put Option, you are obligated to buy the underlying asset if exercised.
Selling Means Credit And Buying Means Debit
Options when BOUGHT are purchased at a DEBIT to the buyer and should be considered assets. So when you buy an option the money is debited from your brokerage account. It’s exactly like buying a stock.
As mentioned above you can also sell an Option, without owning the shares. Options when SOLD are sold at a CREDIT to the seller. When you sell an option it should be considered a liability and money is added to the brokerage account at the time of sale. Not many things are guaranteed in the market but this is. However, you can’t withdraw this money until the trade has been closed, usually, this money is used to offset the margin required for selling the options.
Every day on Options Trading Signals our resident specialist, Neil Szczepanski, does defined risk trades that protect us from black swan events 24/7. Many may think that is what stop losses are for. Well, remember the markets are only open about 1/3 of the hours in a day. Therefore, a stop loss only protects you for 1/3 of each day. Stocks can gap up or down. With options, you are always protected because we do defined risk in a spread. We cover with multiple legs which are always on once you own.
My team and I have been building and developing fully systematic algorithmic trading strategies for many years and can tell you that unless you have a solid foundation related to knowing when and where opportunities exist in market trends, you are likely churning your money in and out of failed trades. Though I have already completed the first live presentation, I will be hosting one more at the July Wealth365 Summit on July 16th at 12 pm. The Summit is free to attend and offers unparalleled opportunities for learning…plus a potential prize or two!
For years, growth stocks have been beneficiaries of outsized gains compared to the averages. The main criteria we look for when betting on upside in a stock is improving fundamentals, great entry points (technicals), and a history of bullish trading activity in the shares. 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 FTNT, AMZN, PAYC, TTD, & ZM.
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 Fortinet, Inc. (FTNT), which is a leading cyber security 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 FTNT being:
1-year performance (+95.86%)
YTD outperformance vs. NASDAQ ETF (+57.56% 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 FTNT has made the past few years. That’s one strong uptrend. Blue bars are showing that Fortinet was likely being bought by a Big Money player according to MAPsignals.
It’s clear there’s a lot of blue historically with this stock. That’s exactly what you want to see when looking for a great growth name. This is what I call the stairway to heaven:
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, Fortinet’s revenue numbers have been strong:
3-year sales growth rate (+20.17%)
3-year earnings growth rate (+347.93%)
Next up is Amazon, Inc. (AMZN), which offers a leading online marketplace. They are also dominant in cloud computing via AWS.
When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for AMZN being:
1-year performance (+19.82%)
YTD vs. Staples ETF (+.2% vs. XLP)
Historical big money signals
While the stock has outperformed recently, look at the long-term picture. These are the top buy signals Amazon 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, Amazon has grown revenues massively:
3-year sales growth rate = +29.67%
3-year earnings growth rate = +107.5%
Another growth name to consider is Paycom Software, Inc. (PAYC), which offers HR and payroll solutions to small businesses.
When we decide on the strongest candidate for long-term growth, we want to see a history of big money buying the shares. Paycom has that. Also, recent underperformance can be attractive:
1-year performance (+32.16%)
YTD underperformance vs. technology ETF (-32% vs. XLK)
Below are the big money signals Paycom has made since 2015. This stock has been a magnet for Big Money:
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. Paycom’s growth rate is impressive. I expect more growth in the coming years:
3-year sales growth rate = +25.03%
3-year earnings growth rate = +39.28%
Number 4 on the list is Trade Desk, Inc. (TTD), which is the leader in digital advertising. 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 Trade Desk being:
1-year performance (+81.03%)
YTD outperformance vs. discretionary ETF (-16.53% vs. XLY)
Historical big money signals
Below are the big money signals that TTD has made since 2017:
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, Trade Desk has been growing nicely:
3-year sales growth rate = +39.94%
3-year earnings growth rate = +65.73%
Our last growth candidate is Zoom Video Communications, Inc. (ZM), which is a video communications company.
When we decide on the strongest candidate for long-term growth, we consider many technical areas important to success with a few for Zoom Video being:
1-year performance (+47.94%)
YTD underperformance vs. technology sector (-2.66% vs. XLK)
Historical big money signals
Below are the big money signals Zoom Video has made since 2019. You can see how powerful the performance has been since the pandemic hit in March 2020:
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, Zoom Video has grown revenues massively over the past few years:
3-year sales growth rate = +177.46%
3-year earnings growth rate = +2441.03%
The Bottom Line
FTNT, AMZN, PAYC, TTD, & ZM represent top growth stocks for August 2021. Given the strong historical revenue & earnings growth, and multiple big money buy signals, these stocks could be worth extra attention.
By completing the test flight to space, Branson became the first billionaire space company founder to do so, beating the likes of Jeff Bezos and Elon Musk. Branson followed Virgin Galactic’s spacecraft VSS Unity, which took off above the skies of New Mexico on Sunday.
Following the flight, Branson said, “We’re here to make space more accessible to all at all. The mission statement that I wrote inside my spacesuit was to turn the dream of space travel into a reality for my grandchildren and for many people who are alive today, for everybody.”
The VSS Unity is designed to hold two pilots and six passengers. The company now has roughly 600 reservations for tickets on future flights, with each ticket sold between $200,000 and $250,000.
Space Flight Pushes Virgin Galactic’s Shares Higher
The shares of Virgin Galactic surged by nearly 10% earlier today following the success of the Branson-led space flight. The stock price rose as high as $51 per share earlier today during the pre-market trading session.
However, the Virgin Galactic’s rally has cooled down, and the stock is now trading just above the $49 mark. The company is expected to make three more spaceflights before the end of the year.
With Virgin Galactic’s share price rallying following, investors could expect Amazon’s stock price to increase once Jeff Bezos goes to space with his Blue Origin company. Bezos is expected to make the trip on July 20, less than ten days after Richard Branson.
Stocks interrupted their winning streak as investors took a breather to start the holiday-shortened week on a sour note. The S&P 500 finished slightly lower, while the Dow Jones Industrial Average shed more than 200 points and the tech-heavy Nasdaq managed to eke out some gains.
The S&P ended its seven-day record-close stretch, while the Dow similarly failed to build on its all-time high. There was no single negative event to drag stocks lower, though the ISM’s purchasing managers’ index for June came in slightly weaker than expected.
And even though last week’s employment report showed robust jobs growth, the unemployment rate is still hovering at an alarmingly high 5.9%. Trading was relatively light, suggesting that the summer doldrums might stick around for a while.
Tech was the bright spot, buoyed by Amazon, which bucked the downward trend and raced ahead by nearly 5%. The stock benefited from a decision by the government to shutter a multi-billion-dollar JEDI cloud contract it had with Microsoft, potentially paving the way for Amazon to muscle its way in.
Stocks to Watch
Wall Street Bets, the Reddit account that started the meme stock craze, has taken its subreddit away from public view. The popular account has switched the forum to private mode, essentially blocking anybody who has not been approved from viewing or participating in the discussion.
As fate would have it, a couple of meme stocks were punished on Tuesday, chief among which was Clover Health, which shaved nearly 15% off its value. AMC Entertainment shed almost 4%, failing to maintain the gains it achieved after revealing it would nix plans to pursue a sale of 25 million shares.
In true Amazon fashion, GameStop has leased space in Reno, Nev. for a fulfillment center to house its video games and electronic components. The facility, which will be operational next year, will be used to accelerate shipments to West Coast customers. GameStop recently tapped Amazon alum, Matt Furlong, as its CEO, and the company’s digital strategy is beginning to take shape.
The FOMC meeting minutes will be released on Wednesday afternoon, giving investors the opportunity to see exactly what policymakers are thinking. The Fed has already tipped its hand to upcoming more hawkish monetary policy, and investors are hunting details on when as well as any indication of inflation trends.