Author: admiin

Major U.S. stock indexes rose slightly Wednesday after President Trump tweeted that Chinese officials were coming to make a deal, injecting some optimism into a market on edge over resurgent trade fears.

Stocks from shares of technology companies to industrial manufacturers gained momentum early in the trading session to pull all three major indexes higher. The gains have so far stopped a harsh two-day stretch of declines after President Trump’s threat Sunday to slap higher tariffs on billions of dollars of Chinese imports….

Brad Katsuyama, the trader turned famous overnight by the Michael Lewis novel Flash Boys, believes his investor-friendly exchange is gaining ground in its battle against the New York Stock Exchange and Nasdaq.

Katsuyama’s IEX Group only launched in 2016, but today it handles $8 billion to $10 billion of equity trading a day. While that trails IEX’s rivals, it’s more than foreign exchanges like the London Stock Exchange, Deutsche Boerse and the Toronto Stock Exchange.

“We use technology to protect pension funds from getting picked off by high-speed traders,” Katsuyama told CNN Business on the sidelines of the SALT Conference in Las Vegas

Katsuyama, who played the leading character in the novel Flash Boys, criticized the establishment exchanges for making more money off high-speed data than in their traditional role of matching buyers and sellers.

“It’s like finding out the electricity company makes more money doing something other than selling electricity,” Katsuyama said.

IEX, which has been profitable since its launch, has drawn takeover interest from Silicon Valley.

“We’ve been approached by bigger tech companies,” said Katsuyama, who declined to say when the negotiations took place nor say which firms.

He added that while an IPO of IEX is not in the short-term plans, it’s definitely a long-term option.

IEX also announced on Tuesday the addition of former Democratic SEC commissioner Kara Stein to its board.

“The SEC’s mission is to protect investors and the public. That’s also IEX’s mission in many ways,” said Katsuyama. 

Nobody likes to fall into a trap. Yet investors may soon be falling into two traps that the stock market has potentially set up.

Let’s explore the issue with the help of a chart.

Please click here for an annotated chart of ETF S&P 500 ETF SPY, +0.06%  which represents the S&P 500 Index SPX, +0.04% Please note the following:

• The chart shows two potential traps that the stock market has set up and investors are slowly falling into.

• The potential bull trap is characterized by the breakout of stock prices above the green line shown on the chart.

• The potential bear trap is shown by stock prices falling below the orange line shown on the chart.

• Only one of these two traps will become valid.

• There is no way to know with 100% certainty which trap will become valid.

• Under these circumstances, investors ought to pay attention to Arora’s Third Law of Investing and Trading: Making investing and trading decisions based on probabilities is the only realistic and profitable approach.

Read: Prepare for a ‘sell the news’ scenario once a U.S.-China trade deal is signed

Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora.

Three probabilities

In our analysis at the Arora Report, the following are the probabilities:

• Bull trap coming true: 30%

• Bear trap coming true: 45%

• Whipsaws: 25%

The highest probability is the bears getting trapped. In plain English, this means there is a 45% probability of the market going higher.

Supports and target zones

Please click here to see support and target zones. For details, please see “How to trade stocks as Trump threatens China with new tariffs.”

Stocks to watch

Stocks with little direct exposure to China, such as Google GOOG, -0.26% GOOGL, -0.35%  Amazon AMZN, +0.16% and Facebook FB, +0.08% are likely to be least affected. Stocks with direct exposure to China, such as Apple AAPL, +0.21% Starbucks SBUX, +0.78% Nike NKE, +1.05% and Boeing BA, -0.24% are likely to be most affected. Semiconductor stocks, such as Intel INTC, -0.38% AMD AMD, +2.44% Micron Technology MU, -0.70% and Qorvo QRVO, +5.77% may see wild swings. Chinese stocks such as Alibaba BABA, -0.90% and JD.com JD, -0.65% may also see wild swings.

Portfolio protection

At The Arora Report, we increased portfolio protection Monday. A rebound during the day gave us advantageous fills. How could you have protected your portfolio? Start with Arora’s Second Law of Investing and Trading: Nobody knows with certainty what is going to happen next in the markets.

Disclosure: Subscribers to The Arora Report may have positions in the securities mentioned in this article or may take positions at any time. Nigam Arora is an investor, engineer and nuclear physicist by background who has founded two Inc. 500 fastest-growing companies. He is the founder of The Arora Report, which publishes four newsletters. Nigam can be reached at Nigam@TheAroraReport.com.

The cryptomarket is going through a complete bullish trend and most coins are benefitting from the increased market momentum. Out of all the coins on the market bitcoin has outperformed all of them and shown impressive fifty percent (50%) growth.

Along with this it has crossed multiple resistance levels and entered the Golden Cross and introduced an increased market momentum there. As if all of these achievements were not enough bitcoin has surpassed its own expectations.

The eldest son of the Queen of England Prince Charles has accepted Bitcoin and its underlying blockchain technology with open arms. The event occurred in Germany when the Prince was asked a question related to the technology.

The Prince was asked about his take on bitcoin in Berlin, Germany and at first, he dismissed the question by saying he does not know much about the technology.

However, later on, blockchain technology was brought up and the Prince gave his thoughts on the technology saying that the technology is showing some very interesting developments.

This statement from such a prominent figure in England means a lot to the crypto industry. It validates its existent in the world and proves how much the industry has improved and grown.

No one expected the Prince to be updated on the new rising technology and his statement comes as a pleasant surprise.

This is making the crypto space excited because after getting this much recognition its reputation and market momentum is bound to increase.

This event makes many people suspect if England will be making its own cryptocurrency for its own citizens and whether those crypto coins will be named after Queens and Kings. The crypto space is very enthusiastic about the opportunities this event will bring.

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Barry Silbert, Founder and CEO of Digital Currency Group, has been a vocal advocate of Bitcoin [BTC] and the cryptocurrency market. In a recent interview with Fox Business, the Bitcoin bull touched upon the Drop Gold campaign, while focusing on the advantages that BTC possesses over gold.

Silbert stated that although the gold industry is valued at $8 trillion, it still does not have a connection with the latest generation of investors. He added,

“The younger generation of investors do not view gold in the same way as our ancestors did. They grew up with a gold standard and that is not what the economy needs right now. There is a major disconnect with the gold bodies and the central banks too. Why would you want to align yourself with Russia and China where the gold deposits go?”

The CEO added that the only way gold can have practical value is if the Dollar falls. However, Silbert also claimed that he wouldn’t bet against the United States. He stressed on Bitcoin’s benefits, emphasizing that the world’s largest cryptocurrency has utility and is much more accessible and portable than gold. According to him,

“At a 100 billion market cap, Bitcoin will only go up. It has all the benefits of gold with more upsides. Compare to the use cases of Bitcoin, gold can only be used to make nice jewelry and as a store of value. You have to change the perspective of an entire generation and that is why this campaign, which is designed to be provocative, was launched and marketed.”

Barry Silbert also spoke about the entry of tech giants like Facebook and Square into the cryptoverse, claiming that their entry will be followed by the creation of more infrastructure. He even pointed out the case of JPMorgan CEO Jamie Dimon, who agreed to creating a native token, despite being vehemently opposed to Bitcoin a year ago.

Their omnipresent adversaries – the bears – have successfully repelled everything that has been thrown at them during the surge in bullish sentiment these last few weeks. In fact, it would appear they may have even laid out an impressive length of lethal cavalry spikes in front of their robust defences, as most manoeuvres towards the psychological $6k barrier seem to be lain to waste at the $5,900 mark. This line of resistance is proving problematic for the highly anticipated return of BTC to higher ground, along with some of the leading alternative cryptocurrencies. It would be safe to say, though, that those defences appear to be weakening somewhat.

You only need to wind the clock back by two weeks to see a similar scenario.

Back then, the line of resistance was $5,350 and, just like we’re seeing this week, the repeated attempts upon it were pushed back down time after time.

However, after a series of breaches, bitcoin managed to hold its head above the line and crawl its way up to $5,800.

Overstretched, it quickly snapped back below $5,350.

The return to this week’s level was strong and surefooted though, with a swagger and confidence we have rarely witnessed for more than a year.

To some, this cockiness betrays what could be seen as a cruel element of a bear market – it has a predisposition to cause maximum pain after luring victims – siren-like – into a false sense of security before the ground crumbles beneath their feet.

And therein lies another problem – the possibility that the muscle-flexing is actually the real deal.

The trouble is, it’s almost impossible to tell.

Instead, we will need to wait and see what happens during the remainder of this week.

We’ve already seen $5,900 breached a handful of times over the last few days, which matches the pattern from the previous line of resistance. 

There is though, something deeply significant about $6,000.

It has been viewed in the past as one of the sturdiest footholds from which building meaningful upwards movement comes from.

Plus, there is common thinking across many analysts who would suggest that a sustained break through this foothold would almost certainly mean that BTC would remain above it for many months.

If that happens, it would effectively bring to end what has been a fairly oppressive bear market, and put bitcoin and no doubt other cryptocurrencies into a bull market once again.

The flipside is, of course, that this is the trap that some observers fear.

In essence, it merely means that the current market simply is not ready to become a bull market.

Everything now hinges on how triumphant the next attempts at breaching $5,900 and then $6,000 are.

In simple terms, successfully holding above $6k returns BTC to a bull market.

If these attempts are unsuccessful, it could herald a slump into consolidation and a drop back to the $5,350 line or lower.

• Coin Rivet is a website bringing news, information, analysis, opinion and insight from the fast-moving blockchain world.

As markets tumbled under the threat of a trade war with China, Goldman Sachs told clients there would be one distinct group of winners and one group of losers in the stock market as this foreign policy drama unfolds.

Service-providing companies like Amazon will fare better than goods-producing firms like Apple during a trade war, Goldman Sachs said in a note to clients on Tuesday.

“Services firms are less exposed to trade policy and have better corporate fundamentals than goods companies and should outperform even if the trade tensions are ultimately resolved, as our economists expect,” said chief U.S. equity strategist at Goldman Sachs David Kostin. 

Stocks are getting hammered this week as President Trump threatened new tariffs on China after they reneged on key parts of a developing trade agreement. The Dow Jones Industrial Average is down nearly 540 points this week while the S&P 500, and the Nasdaq are down more than 2%. U.S. trade representative Robert Lighthizer said the U.S. is raising tariffs on $200 billion worth of Chinese goods from 10% to 25% on Friday.

This turmoil will divide the market into two parts, Goldman’s strategy team said. They split the S&P 500 into two baskets: good-producing companies and service-producing companies, evaluating each one’s risk factors during a looming trade war.

During the sell-off, Goldman says service stocks like Amazon, Google and Microsoft have less foreign input costs subject to tariffs and should outperform.

“The trading pattern during the past year of tariff announcements and delays suggests services-providing stocks will outperform goods-producing stocks as long as the trade dispute continues,” the note said.

Plus, these companies have more stable gross margins and stronger balance sheets, the firm points out, which could lead to their outperformance regardless.

On the other side, goods-producing companies like Apple, with $10.22 billion in sales in its Greater China category for the second quarter, along with Johnson & Johnson and Exxon Mobil are more exposed to retaliation by China.

The services basket, containing additional companies like Facebook, Disney, Home Depot, AT&T, and McDonald’s, are expected to grow 2019 sales by 9% and earnings by 7%, Goldman points out.

Other names on the services list that should outperform include Netflix, Comcast, and Wells Fargo, the firm said.

“Counter-intuitively, wage inflation above 3% will provide a slight relative boost to services firms, which commit a smaller share of revenues to labor,” said Kostin.

Plus, Goldman noted that of the 260 companies in the services basket, 175 or 58% of market value, also fall into Goldman’s domestic sector basket, less exposed to China. The goods basket is overwhelmingly international, 193 companies or 85% of market cap fall into Goldman’s global sector basket.

Within the goods basket, companies like Procter & Gamble, Intel, Chevron, Coca-Cola, and Boeing, are estimated to have negative earnings growth of 2% and no sales growth at all this year, the firm said.

“The faster growth rate supports the valuation premium of services, which trades at a 17.5x forward P/E multiple vs. 16.8x for goods,” Kostin said in the note.

Pepsi Co, Broadcom, Honeywell, and NVDIA are also on the goods list and should be avoided, Goldman said.

Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.

Buy this stock-market decline on Monday.

That’s the recommendation of Fundstrat Global Advisors analyst Thomas Lee in a Monday research note, in the wake of a tumble by equity indexes across the globe partly inspired by an apparent escalation of Sino-American trade tensions.

President Donald Trump ramped up conflict between China and the U.S. after he tweeted on Sunday a threat to raise tariffs on $200 billion in Chinese imports to 25%, up from the current 10%, putting a tentative accord between the two countries in doubt ahead of negotiations set to begin this week in Washington.

The unexpected Trump announcement, coming as markets had held out apparent optimism over a near-term resolution, roiled global markets, driving China’s 399106, -0.65% Shenzhen Composite Index to a 7.4% loss, while the CSI 300 Index 000300, -1.43%  tumbled 5.8% and the Shanghai Composite Index SHCOMP, -1.12%  lost 5.6% on Monday.

Domestic markets also got whacked, with the Dow Jones Industrial Average DJIA, +0.08%  , the S&P 500 index SPX, +0.04% and the Nasdaq Composite Index COMP, +0.01% on track for the steepest slides, at their intraday lows, since March 22, according to FactSet data.

Read: Investors are pushing the panic button on U.S.-China trade talks, analyst suggests

However, Lee says there is reason to be a buyer in this downbeat environment.

He points to the fact that markets had been near records already, including the Nasdaq, which finished Friday at an all-time high, with the S&P 500 not far behind. The strategists said that even though some bears might argue that the heightened trade tensions represent an opportune period to take some chips off the table, or sell down holdings, it might be a lost opportunity for bulls because stock-supportive factors remain in force.

“Retail investors have been selling stocks and buying bonds so far in 2019. And hedge fund net long positions are among the lowest levels in 5 years. Hence, only the long only funds are fully exposed to equities. With so much on the sidelines, markets near highs, and with manager underperformance, we see this dry powder as a key dynamic,” Lee wrote.

The Fundstrat analyst also makes the case that the trade spat might prompt the Federal Reserve to remain “market friendly” by holding off on near-term interest-rate increases.

Lee said, “Unlike 2018, where the Fed seemed blinded by data dependency, we believe any mounting financial stress will be met by an eventual Fed response.”

At the start of the year, the Fed adopted a decidedly accommodative policy stance after a raising rates four times in 2018, citing tightening financial conditions and worries about trade wars. That Fed’s U-turn has been partly credited with helping the markets return to fresh records after a selloff late last year culminated in the worst plunge on the trading day before Christmas on record.

Growing optimism about a trade resolution and the softer posture by the Fed have often been viewed as key catalysts for the markets in recent months.

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Match Group, the dating app conglomerate that owns Tinder, Hinge, and more, had to pay Tinder employees $9.4 million in stock compensation this quarter because of the app’s rapid growth. That large number could have implications beyond the company’s finances: it might be consequential in the $2 billion lawsuit the company faces from Tinder co-founder Sean Rad.

Rad claims Match purposely undervalued Tinder in an effort to avoid paying out billions of dollars in stock to the team’s original employees. The bonuses being given out this quarter suggest Tinder’s valuation grew monumentally over the past couple years.

Alex Heath reported in Cheddar that an independent valuation earlier this year valued Tinder at $10 billion, which would trigger performance-based payouts. While Match didn’t announce Tinder’s valuation, the payouts it disclosed this week support Heath’s report.

This new valuation, which comes only two years after Match valued Tinder at $3 billion, could lend Rad’s case some merit. In a comment to The Verge, Rad’s lawyer, Orin Snyder, said today’s news is evidence that “IAC and Match ripped off the Tinder founders and early employees to the tune of billions of dollars.”

Match Group’s spokeswoman Justine Sacco said the company doesn’t “disclose information on internal valuations.”

Match CFO Gary Swidler confirmed that the $9.4 million in stock went to Tinder employees on the company’s earnings call today, and the figure is listed in the company’s earnings release. The announcement follows Heath’s report, which didn’t have the exact payout numbers.

Heath said that, at the time of Tinder’s last valuation, Match gave Tinder employees performance-based stock packages to incentivize them to continue working hard to grow the app.

In the months since Rad’s lawsuit, Match countersued him over claims that he copied internal files and proprietary information before he left the company, violating his employment contract. Match is seeking $230 million, and Rad’s team has filed a motion to dismiss, claiming the contract allowed it.

Online fashion house Farfetch’s CEO Jose Neves and members of the company’s leadership team ring the opening bell to celebrate their IPO at the New York Stock Exchange in New York, September 21, 2018.

Brendan McDermid | Reuters

London-based luxury online marketplace Farfetch is Wells Fargo’s “hidden gem” with major growth potential in China despite heightened trade tensions, the bank said in a note on Tuesday.