Dow Jones: 33,223 (+0.28%)
S&P 500: 4,288 (+1.50%)
Nasdaq: 13,473 (+3.34%)
Russell 2000: 1,995 (+2.64%)
Bitcoin: $38,407 (+2.37%)
Ethereum: $2,629 (+0.44%)
Stonks don’t always go up… But when they do, it’s apparently at the most unexpected times — like when Russia actually makes its move against Ukraine.
The stock market had decided to go on a rollercoaster ride today — the kind that would immediately get discontinued from any self-respecting theme park. The S&P 500 ended up 1.5% (after being down 2.6% earlier in the day)… Almost as impressive as Tom Brady’s 28-3 comeback.
Investors snapped up shares of Big Tech names on this morning’s dip, sending Amazon, Netflix, Alphabet, Microsoft, and Meta higher.
It seems like markets were certainly confused, but ultimately not too concerned about the launch of military action in Ukraine by Russia late last night given today’s moves — but we are certainly keeping an eye on how this plays out moving forward into the following days/weeks.
Crypto: Bitcoin wasn’t immune to the rollercoaster jitters either — after nearly $250 million was liquidated from futures funds shortly after the invasion announcement, Bitcoin ended the day above $38k.
Now, for the top stories of the day…
Source: Heat Map & Sector Performance — Finviz.com
Bitcoin And “Digital Gold” Are Having a Falling-Out…
Bitcoin proponents have long said that Bitcoin is a great store of value. In other words, it’s like a digital gold — one that can be mined safely behind a computer and one that’s supply is digitally capped with code.
But as the market experienced a wild day of volatility, so did Bitcoin. And some industry execs are saying that there’s “no way” that the digital gold narrative is actually holding up.
- As the stock market fell this morning amid the uncertainty in Ukraine, gold futures rose.
- At the same time, Bitcoin and the total crypto market fell hard in the early trading hours as hundreds of millions of long futures positions were liquidated amid the volatility.
Here are both sides of the argument (or, uh, coin):
Not your grandpa’s gold: Some experts are saying that cryptocurrencies like Bitcoin are more closely linked to speculative parts of the market (like tech stocks) than anything else.
- “The correlation between crypto and stocks has been high over the last few months on both inflation-related macro news and the Russia-Ukraine geopolitical situation,” said Chris Dick at crypto market-maker B2C2. “This correlation shows that bitcoin is firmly behaving like a risk asset at the moment — not the safe haven it was touted to be a few years ago.”
- “Bitcoin, the asset purported to be the answer to every question, has quietly weakened and is notably underperforming its arch enemy, gold,” John Roque, head of technical strategy at 22V Research.
The digital gold-bugs: On the other hand, other industry experts say that the digital gold narrative is still intact.
- CEO of South Korean analytics firm (CryptoQuant) points out that despite this morning’s crash in crypto, there have been no significant on-chain activities in Bitcoin, meaning institutional buyers are (for the most part) not dumping their holdings.
- Glassnode analytics show that over 75% of BTC volume is being held by long-term wallets, indicating that trading activity is limited to a small amount of the actual BTC supply.
- Essentially, the argument is that even though BTC is crazy volatile, the narrative of “store of value” still exists on a large scale in the marketplace.
That is, of course, until large accumulating whales like Michael Saylor decide to start dumping their tokens on the open market…
Who is Winning the Streaming Wars of 2022?
We all know that streaming is getting super competitive with incumbents and new market players battling it out for the attention of late-night binge-watchers. But where exactly do each of the platforms stand in the Streaming Wars of 2022?
Here’s how they stack up with regards to subscriber counts (and their most recent gains from previous quarters):
- Netflix: 220 million (+8.3 million)
- Disney+: 118.1 million (+11.7 million) — but don’t forget about Hulu (41 million) and ESPN+ (21 million)
- Amazon Prime Video: 175 million (according to Jeff Bezos comments from last April)
- Apple TV+: Less than 20 million (as of last July)
- Peacock: 24.5 million
- Paramount: 56 million
- Starz: 19.7n million (+1.7 million)
- WarnerMedia’s HBO/HBO Max: 73.8 million (+4.4 million)
As you can probably tell, some streaming companies are a bit more transparent than others… and investors in the space generally view transparency as a good sign that the company is confident in its service’s viability in the marketplace.
Netflix (NFLX) has always been reliable when it comes to putting out clear stats. The company makes sure to provide numbers like average revenue per user (ARPU) and subscribers based on region — which makes sense, given that’s pretty much everything the publicly-traded company does.
- Netflix ARPU in US and Canada — $14.78
But it seems like Disney+ was the real MVP this quarter, adding 11.7 million to their customer ranks with hyped-up releases of Marvel shows and movies (let’s not forget that Beatles documentary as well).
- Disney was also able to gain more subs and raise its ARPU on Disney+, Hulu, Hulu+Live TV, and ESPN+ during the quarter.
- The company is confident that it will be able to reach 230 million to 260 million Disney+ subscribers by 2024, while Netflix’s stock crashed as the streaming giant lowered subscriber forecasts.
Nikola Just Shocked the Market — What You Need to Know
Much to the dismay of many investors in the $3 billion EV company, Nikola has failed to report any revenue to date… But that’s all about to change.
On the Q4 conference call, Nikola execs said that they finally expect to generate revenue in 2022. While it won’t happen in this current quarter, the company says that it expects revenue between $90 million and $150 million for the full year.
Rising from the ashes… The Phoenix-based startup (did you get the pun?) is still working on paying that $125 settlement to the SEC for Trevor Milton’s previous screwups. Aside from that, however, there is a decent amount of good news around the corner for Nikola.
- The company is expanding its plant in Coolidge, Arizona and delivered its first two electric trucks in December (as part of a three-month pilot program). The expansion should give Nikola a production capacity of 20,000-trucks per year by 2023.
- Nikola anticipates “beginning series production of the Tre BEV on March 21.”
- The company built 30 prototypes during the fourth quarter in Arizona.
As far as generating revenue goes, Nikola says that it expects to deliver between 300 and 500 Nikola Tre semitrucks to customers over the course of this year.
The announcement sent Nikola’s stock surging over 17% on the day. It seems like investors really liked what they heard on the earnings call, especially after a rough year of news. NKLA was down over 33% year-to-date before today’s boost.
Wind Power Broke a New Record in 2021 — How to Invest
Have you ever gone all out on something just for an authority to come in and say, “that’s still not enough”? Yeah… it doesn’t feel great. And that’s probably how the energy sector in Europe feels right now.
In 2021, as the push for green energy intensified across the globe, Europe installed 17.4 gigawatts of wind power capacity.
- That marked a record amount of wind power created in one year, and an 18% jump from 2020.
- 11 gigawatts were installed specifically in the European Union (which consists of 27 countries).
However it still wasn’t enough… Industry body WindEurope says that in order for the EU “to reach its 40% renewable energy target for 2030, the EU needs to build 30 GW of new wind a year,” nearly triple what they managed in 2021.
The EU wants to cut its greenhouse gas emissions by 55% by the year 2030, and as far as renewable energy is concerned, the EU wants to hit 40% renewable energy by 2030. Wind power is just one of the routes to this goal, but it’s definitely a big one.
- But here’s the thing: The “main bottleneck,” according to WindEurope, has been regulation and permitting. A WindEurope letter to the European Commission earlier this week says, “Europe is simply not permitting anything like the volumes of new wind farms that you and national Governments want to build.”
How can you invest in wind?
- ETFS: First Trust Global Wind Energy ETF (FAN), Global X Wind Energy (WNDY)
- Wind farm developers: Orsted (DNNGY), Avangrid (AGR), Eversource Energy (ES), Dominion Energy (D), NExtEra Energy (NEE)
- Turbine manufacturers: General Electric (GE), Vestas Wind Systems (VWDRY), Siemens Gamesa (GCTAY)
The Odds of a Bear Market Just Surged
- Russian ruble falls over 5%
- Russia’s Moscow MOEX index falls 45% before being halted, and finishes down 33% in the 5th worst market crash in history
- Brent Oil briefly surges above $100/barrel to $105/barrel before settling out at $99/barrel
- Euro falls to its lowest level against the dollar since 2020, falling as much as 1.8%
- European gas prices surge as Dutch Gas futures rise 62% and German power for March increased 58%
NATO was relying on sanctions to be a deterrent for an invasion, but that clearly failed. The United States, Canada, Germany, France, Great Britain, and other nations have all recently released new sanctions against Russian companies, government officials, and citizens. The sanctions target trillions in assets and are intended to cripple the Russian economy. The specifics are kind of boring so if you want to know more we suggest looking it up.
Whats a bear market mean?There’s no way this is a “sell the rumor, buy the news” situation, but it looks like it right now. After the Nasdaq started the day down 3%, the index was able to make a MASSIVE 885 point (7%) comeback throughout the day to finish up 3.35%! Perhaps the most absurd market move ever. While today’s market move was cheered, some analysts say the invasion makes falling into a bear market more likely.
Sunrun (RUN) +21.96% – Sunrun stock recovered its weekly losses today as energy pricing pressures ignite interest in renewable sources.
Cloudflare (NET) +18.71% – Cloudflare to acquire Area 1 Security for $162m and rallied along with the Nasdaq today.
Nikola (NKLA) +17.72% – Nikola shares surged today after beating earnings and announcing it expects to deliver between 300 and 500 EV semi-trucks this year.
Citigroup (C) -4.03% – Citigroup became the first “mega bank” to do away with overdraft fees today, which will cut into future revenues.
TSMC (TSM) -3.47% – TSMC fell today on seemingly no news other than investors’ concerns over a potential Taiwan invasion by China after watching Russia invade Ukraine.
Las Vegas Sands (LVS) -3.41% – Las Vegas Sands completed the $6.25 billion sale of the Venetian to competitor Apollo Global Management.
FuboTV (FUBO) – JPMorgan downgraded shares of FuboTV from overweight to neutral after latest earnings report shows unclear path to profitability. “We view FUBO as more susceptible in the near term to a potential drop-off in subscribers without Turner Networks for March Madness content in Q1, and a lower allocation of marketing dollars to its sports book may lead to a sub-scale operation vs. competitors.”
Coinbase (COIN) – D.A. Davidson reiterated its buy rating for Coinbase but lowered its price target to $275/share.“Publicly available exchange data suggests COIN had a much better-than-expected 4Q21, but 1Q22 activity has slowed dramatically. This should be priced in at this point, so we’re optimistic into results as we look for several key positives.”
Macy’s (M) – Citi upgraded Macy’s from sell to neutral saying the stock may have found its floor. “While we continue to believe M faces substantial structural challenges … we believe the stock has reached a level (trading at a 5x P/E our F22E) where the risk/reward is balanced.”
Quote of the Day: “Never, never, never give up.” —Winston Churchill
Fun Fact: In 2005, an inexperienced trader at a Japanese bank tried to sell 1 share of J-Com stock for ¥640,000. He accidentally sold 640,000 shares for ¥1 each; the equivalent of selling $3 billion worth of shares for the price of $5,000.
- Ukraine warns Nuclear dust from Chernobyl battleground may spread across Europe
- SEC reportedly probes Elon Musk and his brother over recent Tesla stock sales
- Moderna says Covid is entering endemic phase in 2023
- U.S. new home sales fall in January as prices continue to increase
- Bitcoin donations to the Ukrainian military top a half-million dollars in 12-hour window since invasion began