The stock market enjoyed a broad rebound Tuesday as fresh economic data suggested the U.S. consumer is still shopping strong.
The U.S. Census Bureau said today that April retail sales improved by 0.9% over March. Though that was slightly less than the 1.0% expected, there was a show of strength in the significant upward revision to March’s numbers, to 1.4% growth from 0.5% originally.
“To the extent that markets are worried about a growth slowdown, this is good news, but it is also a further catalyst for the Fed to raise rates even higher to get inflation under control,” says Chris Zaccarelli, chief investment officer for registered investment advisor Independent Advisor Alliance.
While Zaccarelli joins other names in believing a recession is unlikely in 2022, “the Fed is going to need to raise interest rates to a point where they are likely to cause a recession in 2023 or 2024, and that gives us cause for concern,” he says.
Despite the promising retail data, success in retail stocks wasn’t a gimme.
Walmart (WMT, -11.4%) plunged after delivering a mixed quarterly report. Revenues improved 2.4% year-over-year to $141.6 billion to easily top expectations, and Walmart lifted its full-year sales outlook. However, that windfall is coming from cost-conscious consumers flocking to its grocery aisle, which has lower margins than its other offerings. This, as well as supply-chain problems and other headwinds, caused Walmart to report profits of $1.30 per share that were well short of estimates, and to lower its income forecast for 2022.
Home Depot (HD, +1.7%) fared better, however, after delivering record fiscal first-quarter sales and upgrading its full-year outlook.
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“Walmart’s report this week basically confirmed all the negative scenarios that you would expect given inflationary pressures and rising interest rates,” says David Keller, chief market strategist at StockCharts.com. But he added that “Home Depot’s report had a much more encouraging tone as consumers fueled a strong earnings win for the company.”
Other pockets of strength Tuesday included airline stocks such as American Airlines (AAL, +7.7%) and Delta Air Lines (DAL, +6.7%), which were boosted by United Airlines’ (UAL, +7.9%) higher second-quarter revenue outlook. Semiconductor stocks including Micron Technology (MU, +5.7%) and Qualcomm (QCOM, +4.3%) also rallied around Piper Sandler’s upgrade of Advanced Micro Devices (AMD, +8.7%).
The Nasdaq Composite was tops among the major indexes Tuesday, up 2.8% to 11,984. The S&P 500 delivered a 2.0% gain to 4,088, while the Dow Jones Industrial Average improved 1.3% to 32,654.
Other news in the stock market today:
The small-cap Russell 2000 surged 3.2% to 1,840.
U.S. crude oil futures slumped 1.6% to $112.40 per barrel.
A retreat in the U.S. dollar helped gold futures tick 0.3% higher to $1,818.90 per ounce.
Bitcoin improved by 1.7% to $30,058.48. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Twitter (TWTR, +2.5%) made some gains despite a potential deal with Tesla (TSLA, +5.1%) CEO Elon Musk looking increasingly unlikely. Musk insisted today that he would back out of his $44 billion bid to buy the social platform unless Twitter proved that fewer than 5% of its users are bots. He tweeted that “20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher” without providing proof. Numerous analysts have now said they believe Musk’s sudden interest in Twitter’s bot numbers is either an attempt to escape his deal, or lower the $54.20-per-share price tag.
Buffett’s Latest Buys Are In!
A number of other stocks were driven higher Tuesday by their newfound inclusion into a prestigious order: the equity portfolio of Warren Buffett’s Berkshire Hathaway.
Berkshire filed its quarterly Form 13F with the SEC yesterday afternoon, revealing that after more than a year of heavy selling, Warren Buffett was finally eager to buy. Paramount Global (PARA, +15.4%) and Celanese (CE, +7.5%) were just two of the eight new positions Berkshire entered during the first quarter, and among the top beneficiaries of earning Buffett’s seal of approval.
We recently mentioned that inflation has been a major driver of many of Buffett’s purchases of the past few months, but it’s not the only story.
Read on as we explore each and every one of Buffett’s 22 moves from the first quarter of 2022, including what likely drew the Oracle of Omaha (or his lieutenants) to the position.
Gemini is a security-focused crypto exchange owned by the Winklevoss twins (of Facebook infamy), aimed at crypto newbies as well as institutional investors. Gemini is known for its robust security features, including an industry-first hot-wallet insurance program that covers theft of digital assets held in the Gemini digital wallet.
After Cameron and Tyler Winlkevoss made a fortune investing their Facebook lawsuit funds into Bitcoin, Gemini was founded in 2015 to help others invest in digital assets. Gemini has grown to offer over 90 cryptocurrencies, and caters to new investors with its simple-to-use platform and mobile app. Gemini also specializes in institutional investors, offering an over-the-counter trade desk, 24/7 support, and even portfolio management for large crypto investing clients.
Gemini Fees
Gemini allows users to sign up for a free account but, like most crypto exchanges, charges a fee for trading on the platform. Here is a breakdown of the fees on Gemini:
Type
Fees
ACH deposit
Free
Crypto deposit
Free
Debit card purchase
3.49% + trading fees
Wire transfer
Determined by bank
Crypto trades below $200
$0.99 to $2.99
Crypto trades above $200
1.49%
Gemini charges fairly high trading fees, especially for orders below $200. There are minimum fees charged on smaller transactions, which can amount to up to 10% of the purchase price (or more). Here’s are how fees are assessed on smaller transactions:
Less than $9: $0.99 fee
$10 to $24: $1.49
$25 to $49: $1.99
$50 to $200: $2.99
Over $200: 1.49% of order total
Debit card purchases are the worst offenders, charging a 3.49% surcharge in addition to the regular trading fees.
Gemini ActiveTrader Fees
Gemini has an advanced trading platform with much lower fees, designed for active traders and offering discounts for those that trade higher volumes per month.
Gemini ActiveTraders uses a maker-taker fee schedule. A maker is someone who places an order that gets placed in the order book to be matched at a later time, effectively “making” a market. A taker places an order that is matched immediately, “taking” the order off the books. Makers generally enjoy lower fees than takers.
Here’s a breakdown of the Gemini ActiveTrader fees:
30-Day Trading Volume (USD)
Taker Fee
Maker Fee
0
0.40%
0.20%
≥ $10,000
0.30%
0.10%
≥ $50,000
0.25%
0.10%
≥ $100,000
0.20%
0.08%
≥ $1,000,000
0.15%
0.05%
≥ $5,000,000
0.10%
0.03%
≥ $10,000,000
0.08%
0.02%
≥ $50,000,000
0.05%
0.00%
≥ $100,000,000
0.04%
0.00%
≥ $500,000,000
0.03%
0.00%
Key Features of Gemini
Gemini is a full-service crypto exchange, offering a wide range of services and features for both beginner and experienced crypto traders, as well as institutional investors. Here are a few of the key features offered on the Gemini platform:
Easy-To-Use Mobile App
Gemini offers an intuitive mobile app that makes it easy to buy, sell, and trade crypto on the go. The mobile app takes the same approach to simplified design as the regular Gemini platform, with easy-to-read price charts, a simplified order form, and even the ability to set up price alerts on your favorite cryptocurrency. And you can set up recurring purchases on a regular basis for investing in crypto over time.
The Gemini mobile app allows quick access to Gemini Earn for earning interest on deposited crypto, which pays out daily interest on your crypto holdings. Gemini Pay can be used on the app to make regular retail purchases with your Gemini account crypto balance. And you can also manage your Gemini Credit Card account directly from the Gemini mobile app.
Overall, the Gemini mobile app is one of the better crypto exchange apps on the market, and is ideal for beginner investors.
Gemini Earn
Gemini offers interest-bearing accounts that pay crypto rewards in exchange for lending your crypto out to borrowers. The Gemini Earn program pays out interest daily, up to 8% APY on certain cryptocurrencies.
Gemini offers interest on over 40 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and USD Coin (USDC). Rates vary by coin, and coins are only lent out to vetted institutional investors.
Gemini ActiveTrader
Gemini offers an advanced trading platform for experienced crypto investors with a wide assortment of trading tools. With live order books, multiple order types, and customizable charting, traders can stay up-to-date on the market and place orders with ease.
ActiveTrader lists all crypto in trading pairs, giving you hundreds of trading options. Market, limit, and stop-loss orders are available, and multiple orders can be placed on the books at the same time.
Gemini also offers block trading (for larger orders), and a daily auction that allows you to set a maximum asset buy price and be matched with other sellers to trade.
Overall, Gemini ActiveTrader offers just enough tools for active traders, but doesn’t overwhelm intermediate traders who are still learning about active crypto trading.
Gemini Custody
Gemini offers secure custodial services for cryptocurrency, keeping assets in protected offline cold storage, and insuring balances kept in custodial accounts.
As one of the only regulated crypto exchanges by the New York Department of Financial Services, Gemini has become a go-to custody option for institutional customers and those wanting to protect large crypto balances. Gemini also offers its custody service to other crypto platforms as well, used as the cold storage solution for smaller exchanges.
Gemini Custody features $200 million in insurance coverage, instant liquidity for trading, same-day withdrawals, and 24/7 customer support. Each Custody client can access a dedicated account representative for assistance.
Gemini Wallet
The Gemini Wallet is used to securely store crypto, supporting all assets on the Gemini platform. It is one of the only crypto hot wallets that offers insurance against certain types of losses, such as from a security breach or hack, a fraudulent transfer, or employee theft.
The wallet is mainly used for transferring assets to and from the Gemini exchange, and it does not connect to decentralized applications.
Advantages of Gemini
Gemini is one of the most popular U.S.-based crypto exchanges for its security features and friendly user interface. With an intuitive mobile app, crypto insurance on custody accounts and the Gemini Wallet, as well as a low-fee advanced trading platform, Gemini offers quite a few advantages to crypto investors. Here are a few of them:
Intuitive Trading Platform. The Gemini platform makes it easy to buy and sell crypto, especially for beginners. You can quickly see the pricing of assets on the platform, check in on your portfolio, and view educational articles and current crypto news on the homepage.
Hot Wallet Insurance. A first in the industry, Gemini protects your digital assets with insurance on the Gemini hot wallet. This allows you to safely store your crypto in your custody, but with the added protection of insurance against theft or other types of losses in your wallet.
Easy-to-Use Mobile App. The mobile app is one of the simplest to use in the industry, making it easy to view your holdings and place orders. With a simplified trading view, built-in educational content, and the ability to trade on the go, the Gemini mobile app is one of the best available.
Advanced Trading Platform. Although Gemini is designed primarily for beginners, the advanced trading platform offers very low fees and a wide range of trading tools for active traders. With customizable charting, multiple order types, and the ability to place larger block orders, Gemini ActiveTraders is ideal for expert crypto investors.
Disadvantages of Gemini
Although Gemini offers great features for beginners and advanced traders alike, there are a few disadvantages to be aware of:
High Fees. Using the standard trading platform results in very high fees, especially for users placing small orders. With a minimum $0.99 fee on orders under $10, this could result in a 10% fee (or higher). Combine that with a 3.49% surcharge on debit card transactions, and investors placing small orders will be paying quite a bit more than most other exchanges.
Limited Crypto Selection. Although Gemini has added assets regularly for the past few years, the total supported list is around 90 cryptocurrencies, which is a much smaller collection than most other exchanges. Bitcoin, Ethereum, and other popular crypto are listed, but you may not be able to find some smaller up-and-coming crypto projects on this exchange. If you are looking for a larger selection, you may want to check out Coinbase or Crypto.com instead.
How Gemini Stacks Up
Gemini is a solid crypto exchange, especially for security-conscious investors who want the most protection for their digital assets. But how does it compare to another large crypto exchange in the U.S.?
Coinbase is the most popular exchange in the U.S. by far, with over 70 million active users and over $500 billion in quarterly trading volume. With a large number of tradable assets and well-designed user interface, Coinbase is one of the best exchanges on the market.
Gemini and Coinbase charge similar fees on their standard trading platforms — both quite high — while their advanced platforms offer discounted fees to high-volume traders. Both also offer institutional investor platforms and crypto secured storage options as well.
Overall, Coinbase and Gemini are both great options for beginners to start investing in crypto, but Gemini offers a more secure platform, whereas Coinbase offers more assets.
Gemini
Coinbase
Fees
Standard trading: 1.49% to 3.49%ActiveTrader: 0.00% to 0.40%
Standard trading: 1.49% to 3.99%Advanced trading: 0.00% to 0.50%
Number of Cryptocurrencies
90+
160+
Trading Features
Simple order form, advanced trading platform, mobile trading, crypto wallet, crypto custodial services
Simple and advanced charting, simple order form, mobile trading, recurring purchases
Security Features
Cold storage, two-factor authentication, FDIC insurance, crypto wallet insurance, user role management, whitelisting
Gemini offers some great features for crypto investors, including a super-simple mobile app for beginners, and an advanced trading platform for experienced crypto traders. With a focus on security, Gemini is the go-to custodian for institutional investors, as well as investors who want to insure their cryptocurrency.
Gemini fees are high for users who trade on the standard platforms, charging especially high fees for small purchases. That being said, using the advanced trading platform offers very low fees, with discounts available for high-volume traders.
In addition to a solid trading platform, Gemini offers a rewards credit card, as well as the ability to pay for retail purchases with your account balance using the Gemini Pay feature.
Overall, Gemini is ideal for beginner investors who want secure access to crypto investing, as well as institutional clients who want insurance on their digital assets.
GME is so 2021. Fine art is forever. And its 5-year returns are a heck of a lot better than this week’s meme stock. Invest in something real. Invest with Masterworks.
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If you’re investing in cryptocurrency, it needs to be part of a balanced portfolio that meets your goals. For most people, this means allocating no more than 5% of your portfolio to a risky investment like crypto.
Possibly the most important thing for investors to remember is don’t panic. Cryptocurrency is a highly volatile investment and these types of price swings are to be expected. — Cody Lachner, certified financial planner and director of financial planning at BBK Wealth Management
Most investors are seeing a broad pull back in all their investments right now, including stocks. There’s not much investors can do in such situations except to keep their portfolios balanced and diversified.
The machine worked great — until it didn’t.
The collapse of terra and luna erased some billion in market capitalization in a week. Experts say that money is unlikely to return. The fallout sent ripples across the entire crypto ecosystem, causing bitcoin and ethereum to hit lows not seen since December 2020.
The crash in crypto has reminded us why a long-term investment strategy is so important. The crypto community has even come up with the phrase HODL which means “hold on for dear life.” Source: thepennyhoarder.com
In the months and weeks ahead, cryptocurrencies will face the same challenge as other major asset classes — rising interest rates — which tend to negatively impact the value of risky investments.
Sometimes people only look at the upside when investing. They think “Wow, I could have made a lot of money if only I had invested in this or that.” — Chris Brooks, co-founder of Crypto Asset Recovery
But why did investors sink so much money into these tokens?
By May 12, the stablecoin once pegged at was trading for less than a penny.
When investing for the long-term, you understand that corrections are part of a normal market. That makes it easier to ride out the lows and wait for the eventual recovery.
Terra’s value is meant to stay at . But it wasn’t backed by real-world assets. Instead, the two tokens were tied in value to one another like a seesaw. One token would be automatically created or destroyed based on the supply and demand of the other.
How To Protect Your Portfolio From Another Crypto Crash: 5 Experts Weigh In
Photo courtesy of Robert Persichitte
1. Don’t Go All in
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Eventually, trust will re-enter the market and you’ll get another shot. — Lance Elrod, a certified financial planner with Next Step Financial Transitions
Photo courtesy of Erik Goodge
2. Read the Fine Print
— Robert Persichitte, a tax accountant and certified financial planner at Delagify Financial Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
New York Magazine described the system “as a perpetual wealth-creation machine, a way to always make money through the magic of code and financial engineering.”
Terra’s algorithm eventually broke — there’s still some confusion and debate over why — and its value started nosediving May 8. As investors sold off UST, the supply of luna ballooned, causing its price to plummet. From there, UST and luna locked arms in a death spiral race to the bottom.
3. Be Safe, Be Secure
By May 16, bitcoin traded at around ,000 — more than a 50% decline in value from its all-time high of roughly ,000 five months ago.
Photo courtesy of Chris Brooks
Cryptocurrency investors are reeling and wondering what comes next after a massive market shakeup sent the price of bitcoin plummeting to its lowest level in 17 months last week. Privacy Policy
Photo courtesy of Lance Elrod
4. Play the Long Game
One positive that can occur during a correction like this is a tax-loss harvesting opportunity: You can sell certain assets to capture losses and offset capital gains tax you may owe next year.
Many cryptocurrency investors are now wondering what comes next and how to safeguard their portfolios. After all, it’s not just cryptocurrency that’s suffering — the entire U.S. economy is sluggish. Inflation is high, interest rates are rising, stocks are down (the S&P 500 has lost 16% of its value so far in 2022) and many experts are forecasting a recession in the next six to 12 months.
But few terra/luna investors paused to realize they were stacking risk on top of risk on top of more risk.
Photo courtesy of Cody Lachner
5. Buy and Hold (on for Dear Life)
— Erik Goodge, a certified financial planner and president of uVest Advisory Group
No one has perfect foresight. That’s why it’s so important to diversify with other assets.
Employ best practices in diversity, securing your private keys and don’t over-leverage yourself. Know that while this is a setback, it’s a temporary one.
We sat down with five experts who offered insight into navigating these uncertain times — and the best ways to protect your portfolio from a future crypto crash.
The phrase reminds us that investing in crypto is anything but a smooth ride. <!–
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The pullback was triggered by the collapse of two of the largest cryptocurrencies — the stablecoin terraUSD (UST) and its sister token luna. The UST-luna fiasco highlights the danger of investing in unproven algorithmic stablecoins and leveraging money in the unregulated world of decentralized finance. The lesson people should take away from the terra/luna crash is that you need to make sure you clearly understand the economic rationale of these projects before investing in them.
A scheme known as the Anchor protocol promised crypto investors annual returns of nearly 20% in exchange for lending out their terra holdings. With cryptocurrency markets relatively stagnant since December, the lure of 20% returns seemed too good to pass up.
The potential for the U.S. to slip into recession was the topic du jour Monday as stocks kicked off the week with a wobbly, uneven session.
Over the weekend, former Goldman Sachs chief Lloyd Blankfein told CBS’ Face the Nation that recession was “a very, very high risk factor.” That opinion was met by a number of other calls Monday morning.
Wells Fargo Investment Institute, for instance, says “our conviction is that the chances of an outright recession in 2022 remain low” but believes odds are growing that 2023 could see an economic contraction. UBS strategists say the chances are different depending on where you look – their global economists say “hard data” points to a sub-1% chance of recession over the next 12 months, but the yield curve implies 32% odds.
“There’s no crystal ball to predict what’s next, but historical trends can come into play here. With the [S&P 500] closing 15% below its weekly record, there’s only been two times in the past 60-plus years that the market didn’t fall into bear territory after a similar drop,” adds Chris Larkin, Managing Director of Trading at E*Trade. “This doesn’t mean it’s bound to happen, but there is room for potential downside.”
Larkin says to keep an eye on major retail earnings this week – which will kick off in earnest with Walmart’s Tuesday report – to get a pulse check on the American consumer.
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Monday itself was a fairly quiet affair. Exxon Mobil (XOM, +2.4%) and Chevron (CVX, +3.1%) were among a number of plays from the energy sector (+2.7%) that popped after U.S. crude oil futures jumped another 3.4% to $114.20 per barrel.
Twitter (TWTR, -8.2%) shares dropped after Tesla (TSLA, -5.9%) CEO Elon Musk spent the weekend questioning how much of Twitter’s traffic comes from bots. Wedbush analyst Daniel Ives said the move feels more like a “‘dog ate the homework’ excuse to bail on the Twitter deal or talk down a lower price.” TWTR stock has now given up all its gains since Musk announced his stake in the social platform.
The major indexes finished an up-and-down session with mostly weak results. The Dow Jones Industrial Average managed to eke out a marginal gain to 32,223, but the S&P 500 declined 0.4% to 4,008, while the Nasdaq Composite retreated 1.2% to 11,662.
Also worth noting: Warren Buffett’s Berkshire Hathaway will file its quarterly Form 13F soon. Check back here tonight as we examine what Buffett has been buying and selling.
Other news in the stock market today:
The small-cap Russell 2000 closed out the session with a 0.5% dip to 1,783.
Gold futures gained 0.3% to settle at $1,814 an ounce.
Bitcoin was off 1.6% to $29,551.92 (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
JetBlue Airways (JBLU, -6.1%) ramped up its hostile takeover attempt of Spirit Airlines (SAVE, +13.5%) on Monday, urging SAVE shareholders to vote against a buyout offer from fellow low-cost air carrier Frontier Group Holdings (ULCC, +5.9%). JBLU last month offered to buy Spirit Airlines for $33 per share – a premium to the $21.50 per share ULCC offered in February – but SAVE’s board of directors rejected the bid citing concerns over regulatory approval. JBLU followed up in early May with an “enhanced superior proposal,” including paying a $200 million, or $1.80 per SAVE share, reverse break-up fee should regulators block the deal.
Warby Parker (WRBY) fell 5.3% after the eyeglass maker reported a loss of 30 cents per share in its first quarter. This was much wider than the per-share loss of 3 cents the company reported in the year-ago period and missed the consensus estimate for breakeven on a per-share basis. Revenue of $153.2 million also fell short of analysts’ expectations. WRBY did maintain its full-year revenue guidance of $650 million to $660 million. “We remain cautiously optimistic on shares as WRBY continues to show ability to grow the top line, open new stores, and is recession resistant as a lower cost option for non-discretionary spend,” says CFRA Research analyst Zachary Warring (Buy). “We see the company leveraging SG&A to become profitable in the second half of 2022.”
Check Out Europe’s Dividend Royalty
If you’re seeking out more stable opportunities amid an uncertain U.S. market … well, the rest of the world is admittedly looking pretty shaky, too. But that doesn’t mean there aren’t a few morsels worth a nibble.
BCA Research notes that while there’s negative news around the globe, “European benchmarks already discount a significant portion of the negative news.” And looking ahead, inflation there is expected to peak over the summer “as the commodity impulse is decelerating” – that should help stagflation fears recede and help European shares.
Graham Secker, Morgan Stanley’s chief European and U.K. equity strategist, chimes in that his firm remains “overweight [European] stocks offering a high and secure dividend yield.”
We’ve previously highlighted our favorite European dividend stocks, which on the whole tend to produce higher yields than their U.S. counterparts.
But we’d also like to shine the spotlight on Europe’s twist on an American income club: the Dividend Aristocrats. The S&P Europe 350 Dividend Aristocrats have somewhat different qualifications than their U.S. brethren, but in general, they’ve proven their ability to provide stable and growing dividends over time.
Read on as we look at the European Dividend Aristocrats.
Investing in cryptocurrency might seem like a great idea, but with so many ways to invest and dozens of crypto exchanges to choose from, it can feel overwhelming to get started. But there are a few services that help automate the entire process, making crypto investing simple for passive investors.
RoundlyX has taken the idea of investing small amounts of money and turned it into an automated crypto investing app. Similar to micro-investing apps like Acorns and Stash, RoundlyX helps users round up purchases to the nearest dollar and invest the spare change into cryptocurrency.
RoundlyX partners with top crypto exchanges to allow you to invest in crypto, making a purchase through your chosen exchange when your rounded up savings reach a certain threshold.
We have reviewed the features, pricing, security, and support of RoundlyX to help you decide if this crypto investing app is right for you.
Key Features of RoundlyX
RoundlyX has a single monthly plan that costs $1 per month for all subscribers, regardless of their account size. The monthly plan also comes with a three-day free trial for users who want to test drive the platform before signing up for the paid plan.
Here are the key features of the RoundlyX platform:
Round Ups
The core feature of RoundlyX is the ability to connect your spending accounts (bank account or credit card) and round up purchases to the nearest dollar. This rounded-up spare change is transferred to your RoundlyX account, and when it hits a certain threshold, the funds are used to purchase your choice of cryptocurrency.
Here’s how it works:
Using a built-in financial account integration tool (Plaid), you can sign into your financial spending accounts for RoundlyX to track your spending. One of these has to be a bank account that will be used for transferring money.
You then select which crypto exchange you want to use and connect it to RoundlyX for executing purchases. You will also select which crypto you want to purchase with your round-ups.
When you spend on any of your connected spending accounts (credit cards, debit cards, bank accounts), RoundlyX will round up your purchases to the nearest dollar.
The rounded-up amount is transferred from your bank account (not credit cards), and deposited on to your selected crypto exchange.
When the deposited amount hits a certain threshold, RoundlyX will purchase your selected crypto.
Although this is the simplest way to set up RoundlyX, you can also set rules to purchase multiple types of cryptocurrency or split your funds between multiple crypto exchanges as well.
Choice of Crypto Exchanges
Because RoundlyX is not a custodian of your crypto or other assets, it connects to multiple different crypto exchanges, giving you a choice of which exchange you want to use to purchase crypto. This connection is done through a secure API (encrypted access) to your exchange account, only allowing RoundlyX to view transactions and make purchases.
Currently, RoundlyX supports the following exchanges:
Coinbase
Voyager
Okcoin
Kraken
Binance
Gemini
RoundlyX also partners with Prizeout, a platform that allows you to purchase gift cards at a discount. The integration allows you to round up purchases and use your balance to purchase gift cards through Prizeout.
Recurring Purchases
Investing regularly is one of the best ways to build wealth, allowing your investments to compound over time. In addition to rounding up purchases and investing your spare change, RoundlyX also offers a recurring purchase option, letting you purchase crypto on a regular schedule.
Recurring purchases are made through the same crypto exchange connections you have in place, and can be set up to make purchases on a daily, weekly, or monthly basis. For example; you can choose to set up a recurring $10 purchase of Bitcoin daily, and RoundlyX will execute the $10 purchases every day.
Quick Buy
RoundlyX allows you to purchase crypto directly from your account with its Quick Buy option. Instead of waiting for your round-up balance to grow or setting up a recurring purchase, you can select to buy crypto for any amount, and the purchase will be made on your connected exchange.
Whether you are looking to make a quick purchase while the price of crypto is lower, or you simply just want to purchase a little more in between your recurring buys, the Quick Buy option makes it easy.
Referral Rewards
As soon as you sign up for a RoundlyX account, you will have access to your own referral link. You can earn $4 in Bitcoin every time someone signs up for RoundlyX using your link, and all referrals will receive $4 in Bitcoin as well. There are no limits to referrals, and rewards are paid out monthly into your Bitcoin wallet.
Sharing your link on social media or with family and friends is an easy way to earn referral rewards.
Advantages of RoundlyX
RoundlyX takes the hassle out of investing in crypto, and also allows you to make small investments over time instead of saving up for a big investment. There are several advantages to using the RoundlyX service for crypto investing:
Round Up Service. You can round up the spare change from your purchases to invest small amounts in crypto. This helps you invest without thinking about it, and dollar-cost average into the crypto market.
Multiple Exchange Partnerships. RoundlyX partners with some of the best crypto exchanges to invest with, allowing you to choose your preferred exchange. The connections are secured, and you can even use multiple exchanges at once.
Mobile App Available. RoundlyX recently launched a mobile app for both Android and iOS, allowing users to manage their account from anywhere.
Track Other Financial Accounts. RoundlyX wants to become the Mint of crypto, and allows you to connect all your financial accounts to track everything from its user dashboard.
Recurring Purchases. You can set up a recurring purchase of crypto for additional dollar-cost averaging into your investments.
Disadvantages of RoundlyX
Although RoundlyX offers a simple-to-use service, it is not for everyone. Here are a few of the disadvantages of using the service:
Monthly Fee. The $1 fee per month seems low, but when you are only investing spare change, that $1 may represent a decent portion of your monthly investment. You are also still charged trading fees on the crypto exchange you choose.
No Phone or Chat Support. If you want to speak to someone at RoundlyX, support is only available via email using an online contact form.
Final Word
RoundlyX offers a simple service for a reasonable fee, allowing you to round up your purchases and invest the difference. Although the platform is still new, it has partnered with some of the top crypto exchanges available today, and is continuing to add features.
The RoundlyX dashboard allows you to view all of your financial accounts in one place, making it similar to financial apps such as Personal Capital and Mint.com. You can also manage your account on the go with the newly-launched mobile app for both iOS and Android phones.
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Wall Street spent most of Friday applying some vibrant lipstick to what was otherwise a pig of a week for investors.
A broad market rally – one that saw each of the S&P 500’s 11 sectors finish higher – wasn’t a response to any new positive catalysts. Quarterly reports were light today, with most investors flipping the earnings calendar to next week’s retail-heavy slate.
And Friday’s most noteworthy datapoint was the University of Michigan’s latest consumer sentiment index reading, which dropped from 65.2 in April to 59.1 in May – a 10-year nadir that was well lower than the 64.1 reading expected.
Sometimes the market just enjoys a relief rally.
“Following a week of heavy selling, but with inflationary pressures easing just at the margin, and the Fed still seemingly wedded to 50-basis-point hikes for each of the next two FOMC meetings, the market was poised for the kind of strong rally endemic to bear market rallies,” says Quincy Krosby, chief equity strategist for LPL Financial.
He adds that given the Federal Reserve is only at the beginning of its rate-hike cycle and would like to see demand pull back further, “this rally will most likely weaken.”
Of course, even if this is just a pause before more market declines, investors don’t necessarily have to time the bottom to buy in at a decent valuation.
“This is still an attractive entry point, as we do not believe this is 1999/2000,” says Nancy Tengler, CEO and CIO of asset management firm Laffer Tengler Investments.
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The buying was strongest in consumer discretionary stocks (+3.9%) such as Amazon.com (AMZN, +5.7%) and Tesla (TSLA, +5.7%), along with technology plays (+3.3%) including Nvidia (NVDA, +9.5%) and Advanced Micro Devices (AMD, +9.3%).
Energy (+3.4%) was also bid higher amid a big pop in oil; U.S. crude futures finished 4.1% higher to $110.49 per barrel, helping to spark new highs in gasoline futures prices.
Notably absent from the rally was Twitter (TWTR, -9.7%), which sank after Elon Musk tweeted that the deal was “temporarily on hold.”
All the major indexes put up spectacular gains Friday, though for the week, it was still losses all around: The Nasdaq Composite (+3.8% to 11,805) still finished off 2.8% for the week, the S&P 500 (+2.4% to 4,023) was down 2.4% across the five days, and the Dow Jones Industrial Average (+1.5% to 32,196) closed the week 2.1% in the red.
Other news in the stock market today:
The small-cap Russell 2000 bounced 3.1% to 1,792.
Gold futures had no such luck. The yellow metal was off 0.9% to a 14-week low of $1,808.20 per ounce.
Bitcoin snapped back 5.1% to $30,034.99. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Keep Your Guard Up Against Inflation
Inflation is prevalent virtually everywhere – including on corporate America’s earnings calls.
We’re most of the way through the first-quarter earnings season, and over the past few months, publicly traded companies keep repeating the “I” word as they discussed their most recent financial results.
FactSet used its Document Search technology to track mentions of the term “inflation” on corporate earnings calls, According to their senior earnings analyst, John Butters, of the 455 S&P 500 companies that have conducted earnings conference calls from March 15 through May 12, “377 have cited the term ‘inflation’ … which is well above the five-year average of 155.”
In fact, this is the highest overall number of S&P 500 companies citing inflation on their calls going back to at least 210. (The previous record? 356 … in the final quarter of 2021.)
It’s another signal that inflation continues to be a persistent problem – and with forecasts calling for still-high inflation to come, more active investors might do well to pack a little more protection. We’ve previously analyzed other ways to stay in front of inflation, such as stocks with pricing power and inflation-fighting funds.
Today, we look at another batch of investments that can help harness high inflation, with a focus on commodities, real estate and other areas of the market.
Kyle Woodley was long AMD, AMZN and NVDA as of this writing.
It was a choppy day for stocks as investors unpacked the latest consumer price index (CPI). Data released by the Labor Department this morning showed that prices consumers paid for goods and services in April rose at an annual rate of 8.3% – down from March’s 8.5% pace to mark the first drop in inflation in eight months. While encouraging at first glimpse, there were concerning signs deeper inside the report.
For instance, the decline in CPI last month reflected a drop in gas prices, which have since rebounded. Food prices remained elevated, while airfare and restaurant bills increased ahead of the key summer travel season. And core CPI, which excludes the volatile energy and food categories, rose 0.6% on a sequential basis – double what it was in March.
“While this report appears to mark the first that shows some moderation from the ever-rising pace of inflation since September of last year, one data point does not necessarily make a trend; and the rise in core CPI should lead to some consideration that the moderation in inflation will not be quick,” says Jason Pride, chief investment officer of private wealth at wealth management firm Glenmede.
With prices already high, Pride said, it should be harder for the CPI to continue to rise at the same pace, especially with the Federal Reserve also hiking interest rates to combat higher prices. “However, it will likely take multiple reports for such a trend [of moderating inflation] to clearly establish itself,” he says.
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This sentiment is echoed by Mike Loewengart, managing director of Investment Strategy at E*Trade. “Today’s read is a stark reminder that the journey to pre-pandemic levels of inflation will be a long one,” Loewengart says. “Although inflation slowed from March, the market’s reaction suggests that record high prices continue to weigh heavy on investors psyches. And with inflation persistently hot, the Fed has more fodder for increased rate hikes, which the market doesn’t often welcome with open arms.”
After bouncing between gains and losses in early trading, markets took a decisive turn lower this afternoon. At the close, the Nasdaq Composite was down 3.2% at 11,364, the S&P 500 Index was off 1.7% at 3,935 and the Dow Jones Industrial Average was 1.0% lower at 31,834.
Other news in the stock market today:
The small-cap Russell 2000 retreated 2.5% to 1,718.
U.S. crude futures surged 6% to end at $105.71 per barrel.
Gold futures gained 0.7% to settle at $1,853.70 an ounce.
Bitcoin slid below the $30,000 for the first time since July 2021, down 5.9% at $29,477.50. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Roblox (RBLX) was down as much as 10% in after-hours trading Tuesday after the video game developer reported a first-quarter loss of 27 cents per share, wider than the 21 cents per share Wall Street was expecting. The company’s revenue of $631.2 million also fell short of the consensus estimate, as did bookings of 54.1 million. Still, the metaverse stock managed to finish today up 3.4% after Chief Financial Officer Michael Guthrie said on the company’s earnings call that year-over-year growth may have bottomed in March, sooner than anticipated.
Coinbase Global (COIN) shares plunged 26.4% on Wednesday after delivering a pretty disappointing quarterly report. Q1 revenues were off 27% year-over-year to $1.17 billion, widely missing analysts’ expectations for $1.50 billion. Meanwhile, the company swung to a $430 million loss after earning $388 million in the year-ago period. Monthly users were down 19% YoY, too. Also raising eyebrows in the cryptocurrency community was an update to the Risk Factors section in its Form 10-Q, warning that users could potentially lose access to their assets in the event Coinbase ever had to go through bankruptcy proceedings.
Inflation Remains a Top Concern for Investors
Inflation remains top of mind for investors. This is according to the latest Charles Schwab Trader Sentiment Survey, which reviews the outlooks, expectations and trading patterns of 845 Charles Schwab and TDAmeritrade clients. Inflation was the main concern for those surveyed in the report (20% of respondents), followed by geopolitics (15%) and recession/domestic politics (12% apiece). And nearly half of participants (45%) do not believe inflation will begin to ease until 2023.
“Overall, in the second quarter, market sentiment among traders is unquestionably skewing bearish,” says Barry Metzger, head of trading and education at Schwab. But market participants do see investing opportunities, the report notes.
Among the sectors survey respondents are most bullish on at the moment are energy (70%) and utilities (54%). The industries they are most upbeat toward include cybersecurity (71%) and agriculture (70%).
And 70% of those surveyed are interested in seeking out opportunities in defense stocks. While Russia’s invasion of Ukraine has unsettled many parts of the stock market, it has also sparked an increase in global military spending, which could create a potential boon for the industry. Here, we’ve compiled a quick list of defense stocks that are poised to benefit from this spending build. The names featured include familiar names as well as some under-the-radar picks – and they all sport top ratings from Wall Street’s pros.
Earlier in history, people used gold in exchange for goods and services, instead of the paper money we’re all used to today. But now, instead of gold, we use currency such as the U.S. dollar, the euro, and even cryptocurrency in exchange for products.
Nowadays, there are different types of currencies — some can be backed by a government, such as fiat currencies, and some are decentralized and backed by blockchain technology, such as cryptocurrencies. This article will go over the answer to “What is fiat currency?,” its pros and cons, as well as how it differs from other currencies.
What Is Fiat Money?
Fiat currency, or fiat money, is a type of currency that’s issued by the government and is not backed by physical commodities, such as gold. Instead, the fiat money value comes from the public’s trust in the issuer, the government.
Why is it called fiat currency? The fiat definition comes from a Latin word that can be translated to “let it be done” or “it shall be.” Fiat money only has value because the government gives it value and, therefore, it has more control over the currency and how much can be printed.
Fiat Money vs. Cryptocurrency
Fiat money is a legal tender, which is a currency declared legal by the government, and its value is backed by the issuer (the government). On the other hand, cryptocurrency is a digital currency that’s backed by blockchain technology and decentralized, meaning it’s not backed by a central authority like a government.
Unlike fiat currency, a cryptocurrency is more volatile and brings a higher level of information security compared to fiat money. Although some people believe cryptocurrencies may replace fiat currencies in the future, most transactions around the world are still done using fiat money.
Fiat Money vs. Commodity Money
Commodity money has an intrinsic value, which means it has a perceived or true value attached to it. This type of currency is derived from a material that has value, such as gold or silver. Fiat money, on the other hand, has no intrinsic value. Consider dollar bills — they’re all cut from the same paper, but their values can differ depending on what a government deems the currency is capable of being exchanged for.
Fiat Currency vs. Representative Money
Representative money is also produced by the government, but unlike fiat money, it’s backed by a physical commodity. There are different forms of representative money, such as credit cards and checks, which represent an intent to pay.
Although fiat money is backed by the government, representative money can be backed by different assets. In the case of a check and credit card, they are backed by the money in a bank account.
Understanding Fiat Money in the United States
Throughout most of U.S. history, national currency was backed by gold and silver. In 1933, the government passed the Emergency Banking Act in hopes of restoring the public’s confidence in the national financial system. This act would develop a program to rehabilitate banking facilities and later abandon the gold standard, which let citizens exchange currency for gold. From there on, the gold standard was completely replaced by fiat money: the U.S. dollar.
Pros and Cons of Fiat Money
Just like other currencies, such as cryptocurrencies, there are some pros and cons to fiat money.
Advantages of Fiat Money
Disadvantages of Fiat Money
Greater control over the economy
Not a foolproof way to protect the economy
Cost-efficient to produce
Possibility of hyperinflation
Convenient to use
Unlimited supply could create economic bubbles
Advantages of Fiat Money
Fiat money is not only cost-efficient to produce, but it’s also easy to carry around and exchange. But one of the biggest benefits is that fiat money is not backed by a commodity, meaning it’s not scarce, unlike gold. For this reason, a government has greater control over the currency supply, which gives it the power to manage economic variables such as interest rates, liquidity, and credit supply.
Since a government has control over the money supply, it also has the power to protect the country from a financial crisis. In fact, the U.S. Federal Reserve has a dual mandate to keep the unemployment rate and inflation rate low.
Disadvantages of Fiat Money
Although a government has control over its currency supply, it’s still not a guaranteed way to protect the economy from a financial crisis, such as a recession. Another disadvantage of fiat money is that it’s subject to inflation and a government could mismanage and print too much money that could result in hyperinflation.
In addition, the price of fiat money depends on government regulations and fiscal policy, which could result in a bubble with a rapid increase and decline in prices.
The Future of Fiat Currency
Almost every country now has fiat money as a legal tender, so it’s hard to say what’s on hold for the future. Although there is a rapid rise in cryptocurrencies — and some experts believe it could eventually replace fiat currency altogether — fiat money gives governments more flexibility to manage a country’s economy, therefore, we can expect it to stay the primary medium of exchange for years to come.
FAQs About Fiat Currency
Here are some commonly asked questions about fiat currency.
What Are Alternatives to Fiat Money?
Nowadays, almost all countries have fiat money as a legal tender. Although gold coins could be an alternative to fiat money since you can buy and sell them, they are not commonly used for everyday purchases.
Cryptocurrency is another fiat money alternative that’s on the rise. Cryptocurrencies such as Bitcoin could be used in the future as the main form of currency, but for now, it’s still not widely accepted.
Why Do Modern Economies Favor Fiat Money?
Due to the limited amount of gold coming out of mines, central banks could not keep up with its new value. Fiat money was the alternative that provided cost-efficient production and was convenient to use, and also gave greater flexibility to the government in order to manage its own currency.
Does Fiat Money Lead to Hyperinflation?
Although overprinting fiat currencies could lead to hyperinflation, most developed countries usually experience a moderate amount of inflation. Hyperinflation has occurred in the past, even with commodity money, and it could occur in the case that a fiat currency rapidly loses value, such as when people lose faith in the nation’s currency.
Why Is It Called a Fiat Currency?
Fiat currency stems from a term that can be translated to “it shall be” in Latin, and refers to a type of currency that’s issued by the government and is not backed by physical commodities, such as gold. The U.S. dollar, the euro, and the pound are examples of fiat money.
Is Bitcoin a Fiat Currency?
Bitcoin is not a fiat currency, since it’s not a legal tender issued by the government. Bitcoin is a cryptocurrency backed by blockchain technology and free of a central authority.
Examples of Fiat Currency
Some examples of fiat currencies are:
U.S. dollar (USD)
Euro (EUR)
British pound (GBP)
Korean won (KRW)
Japanese yen (JPY)
Indian rupee (INR)
Mexican pesos (MXN)
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GOBakingRates | Federal Reserve History
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Wall Street searched for stability Tuesday, with a couple of the major indexes able to muster some gains ahead of a vital inflation reading tomorrow.
The 10-year Treasury note, after touching 3.2% yesterday, pulled back below the 3% threshold to as low as 2.94%. This retreat in interest rates removed some pressure from growthier stocks (which had been pummeled Monday), with technology (+1.5%) firms leading the session’s relief rally. Semiconductor stocks such as Nvidia (NVDA, +3.8%), Broadcom (AVGO, +3.3%) and NXP Semiconductor (NXPI, +3.2%) were among the day’s notable risers.
It wasn’t all roses, though. Investors continued to punish once-hot companies showing any signs of weakness.
For instance, artificial-intelligence lending-platform maker Upstart Holdings (UPST) plunged 56.4% to trade around all-time lows. While it beat Street estimates for first-quarter earnings, the company reduced full-year revenue forecasts to $1.25 billion from $1.4 billion previously.
Work-from-home darling Peloton Interactive (PTON, -8.7%) continued its fall from grace after reporting a 15% year-over-year decline in sales, a $757 million net loss and a dwindling cash pile that CEO Barry McCarthy said left the company “thinly capitalized.”
Even AMC Entertainment (AMC, -5.4%) was knocked lower despite a pretty encouraging report in which Batman and Spider-Man films helped the theater company to report a narrower-than-expected quarterly loss.
Still, the major indexes showed some strength. The Nasdaq Composite rebounded 1.0% to 11,737, while the S&P 500 improved 0.3% to 4,001. The Dow Jones Industrial Average brought up the rear, declining 0.3% to 32,160.
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“Markets are clearly confused about what the Fed will do this year and just how aggressive it will get. That can be seen in the volatility in expectations for where the Fed funds rate will be at the end of 2022, as seen in Fed funds futures,” says Invesco Chief Global Market Strategist Kristina Hooper. “And it is reflected in stock market volatility, with the VIX above 30.”
The big story to watch tomorrow is the Bureau of Labor Statistics’ consumer price index (CPI) report for April. BlackRock, for one, expects 8.1% headline CPI growth and 6.0% core growth following 8.5% and 6.5% increases in March.
“A weaker-than-expected CPI report later this week could help turn the tide and see investors embrace risk assets once again,” says Brian Price, head of investment management for independent broker-dealer Commonwealth Financial Network.
Other news in the stock market today:
The small-cap Russell 2000 slipped marginally to 1,761.
U.S. crude futures slipped below the $100 per-barrel mark, ending the day down 3.2% at $99.76 per barrel.
Gold futures fell 0.9% to settle at $1,841 an ounce.
Bitcoin clawed out a 0.5% gain to $31,315.54. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Groupon (GRPN) slid 12.5% after the e-commerce marketplace swung to an adjusted loss of 80 cents per share in its first quarter, compared to a per-share profit of 25 cents in Q1 2021. GRPN also said revenue slid 41% year-over-year to $153.3 million, while global units sold slumped 29% to 12.7 million. The company gave soft current-quarter and full-year revenue guidance, as well. “The underperformance was driven by a weaker rebound in local following omicron impacts in January and February,” says Credit Suisse analyst Stephen Ju, who maintained a Neutral (Hold) rating on GRPN. “As merchants found themselves in a high demand/low capacity environment, they were not incentivized to leverage discounting. Furthermore, April local billings continue to trend at Q1 2022 (as a percentage of 2019) levels and latest trends suggest an elongated recovery path.”
Vroom’s (VRM) narrower-than-expected first-quarter loss sent shares up 32.4% today. In its first quarter, the online used auto dealer reported a per-share loss of 71 cents per share vs. a consensus estimate for a loss of $1.07 per share. Revenue of $923.8 million also came in higher than analysts had expected. VRM also announced a new business realignment plan for long-term growth that it anticipates will result in up to $165 million in cost savings through the rest of 2022. “Vroom is shifting to survival mode, understandably, swapping out more aggressive growth plans for a leaner, and potentially more profitable business model,” says Baird Equity Research analyst Colin Sebastian (Outperform). “Given the current market environment, and challenges in scaling up an ‘asset light’ online sales platform, we think this pivot makes sense.”
Stick to (Most Of) Your Guns
“More than anything, volatility is a test of investor mettle.” So says Ross Mayfield, investment strategy analyst at research firm Baird, who notes that while we’re often told volatility is the price to pay in the stock market’s long-term gains, this glosses over the fact that volatility can take many forms.
“March 2020 featured a gut-wrenching drop, but also a relatively quick rebound. On the other end of the spectrum, markets are occasionally plagued by periods of high volatility that churn sideways relentlessly,” he says. “Each is challenging in its own way; holding through a big drop requires a steel stomach, but longer periods of frustrating volatility require real fortitude.”
While staying the course isn’t easy, you can at least make it less difficult on yourself by homing in on higher-quality investments with a longer-term focus. Stock investors might look to the Dow Jones’ top-rated components; fund investors should stick to well-managed products, such as these Vanguard funds commonly found in 401(k) plans.
But remember: Keeping a calm head doesn’t mean you shouldn’t ever sell in a downturn – on the contrary, the only thing worse than suffering losses in the first place is holding on to weak positions that will slather you in more red ink down the road.
With that in mind, we’ve taken a look at some of Wall Street’s least favorite names at the moment. Remember: Sell calls are typically rare among the analyst community, so the fact that the pros are calling for more downside in these names, rather than saying to buy the dips, is noteworthy.
Check out Wall Street analysts’ list of stocks to sell right now.
The S&P 500 fell to its lowest point in more than a year Monday as last week’s selloff retained all of its momentum and bled into just about anything that trades.
Interest-rate fears continued be the selloff’s primary driver. The 10-year Treasury briefly touched 3.2% today and, even after pulling back to 3.06%, sits around levels last seen in 2018.
“Interest rates are a hammer, not a scalpel – they are blunt tools designed to move slowly and with great force, rather than precisely,” says Andy Kapyrin, co-chief investment officer at registered investment advisory firm RegentAtlantic. “The Fed is swinging the interest rate hammer, and the financial markets are responding to the aftershocks.”
Technology (-3.9%) and consumer discretionary (-4.3%) were among the usual suspects in a trading day that saw each of the 11 S&P 500 stock sectors finish in the red. But this was a wide selloff that went well beyond just stocks and bonds.
U.S. crude oil futures, for instance, cratered by 6.1% to $103.09 per barrel, amid ongoing worries that China’s strict COVID-19 lockdowns will cramp oil prices. Indeed, energy (-8.3%) was Monday’s worst-performing sector, with even blue chips such as Exxon Mobil (XOM, -7.9%) and Chevron (CVX, -6.7%) taking it on the chin.
Gold futures? A bad day, too, off 1.3% to $1,858.60 per ounce as investors piled into the U.S. dollar.
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Cryptocurrencies haven’t provided safety, either. Bitcoin, which fell as low as $30,375 and finished off 13.4% to $31,153, has now fallen by more than 50% from its November 2021 peak. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m.)
Edward Moya, senior market strategist at currency data provider OANDA, notes that institutional buyers are starting to pay close attention to Bitcoin, given that many who got in during 2021 are now losing money on their investment. “If the $30,000 level breaks, that could trigger a flash crash environment if several whales unload,” he says.
The Nasdaq Composite (-4.3% to 11,623) has re-entered bear-market territory, off nearly 28% from its January highs. The S&P 500 (-3.2% to 3,991 – its lowest close since March 31, 2021) needs to lose another 4% or so before entering a bear market, while the Dow Jones Industrial Average (-2.0% to 32,245) would have to retreat another 9%.
Other news in the stock market today:
The small-cap Russell 2000 sank by 4.2% to 1,762.
Palantir Technologies (PLTR) stock surrendered 21.3% after the data analytics company reported lower-than-expected first-quarter earnings per share (2 cents actual vs. 4 cents estimated). The company also gave current-quarter guidance below Wall Street’s estimates, adding that there is “a wide range of potential upside to our guidance, including those driven by our role in responding to developing geopolitical events.” One high note of PLTR’s financial results was its Q1 revenue of $446.4 million, up 31% year-over-year and above the average estimate.
Rivian Automotive (RIVN) plummeted 20.9% after sources told CNBC that Ford Motor (F, -5.9%) will sell 8 million RIVN shares after the electric vehicle maker’s insider lockup period expired on Sunday. The news also dragged on Amazon.com (AMZN, -5.2%), which owns roughly 158.4 million RIVN shares, according to S&P Global Market Intelligence. “The news is not surprising to us, especially after the two companies terminated a partnership to jointly develop an EV last November and as Ford begins deliveries of the F-150 Lightning, a direct competitor to Rivian’s R1T pickup truck,” says CFRA Research analyst Garrett Nelson, who maintained a Hold rating on the EV stock.
The Strongest Parts of a Weak Market
Green ink was in shockingly short supply Monday – but relative success was found among the usual suspects.
“This collapse should continue the rotation into defensive dividend stocks,” says Jay Hatfield, chief investment officer of ETF manager Infrastructure Capital Management.
Consumer staples, which was only marginally lower Monday, and utilities, second-best at a 0.8% decline, are among such beneficiaries, Hatfield says.
Among their greatest qualities right now is what’s sure to be a common refrain in near-term investment advice: pricing power. In short, as inflation continues to march unimpeded, those companies that are best able to push most of those prices on to consumers should fare best – and while your average American might go a few extra months without taking a vacation or buying a new pair of Nikes, they’re unable to pull back much on basic necessities such as food and electricity.
Read on as we examine a number of stocks with exceptional pricing power – as well as highlight several names that, while good companies in their own right, will have an uphill battle as long as inflation remains white-hot.