In this week’s Closing Bull, we will be discussing our financial markets’ recap as there was carnage this week. We’ll be talking about the report from the Federal Reserve on whether to issue a US digital dollar, Netflix stock plunged over 20% after it disappointed on subscriber numbers, Peloton temporarily halting production of its spin bikes and treadmills, stock tanks below IPO price, Amazon is opening a clothing store that features AI-driven recommendations and touchscreen-order dressing rooms, Microsoft acquires Activision in the biggest cash deal ever, and lastly, an interesting fact.
Let’s get into the news!
Key News This Week:
The Federal Reserve releases a report on the question of whether to issue a US digital dollar.
Netflix stock plunges over 20%
Peloton temporarily halts production of its spin bikes and treadmills
Stocks tanked below its IPO price
Amazon to open a clothing store that features AI-driven recommendations and touchscreen-order dressing rooms
Microsoft acquires Activision in the biggest cash deal ever
Read the Transcript
Hi and welcome to my financial markets’ re-cap for the week.
Before we get to the news, a quick update on the system. Once again we were sitting on our hands this week, no trades.
At the beginning of January, and re-stated last week I said we are expecting the market to come down and create a correction in the NQ, and it sure has.
Total carnage in the markets this week. So glad to have set that aside. The Nasdaq has corrected over a 13% since its all-time high, and the S&P 500 is fast approaching correction territory at over a 9% decline so far.
This is when having dry powder and being ready to strike make for big gains. I think, starting next week we will see a recovery and I plan on being there loading up the truck.
So, things are set up well for us. And there is a trade coming soon.
So that was the system update, now what happened in the news this week?
This week, The Federal Reserve released a highly anticipated report on the question of whether to issue a US digital dollar.
A central bank’s digital currency is not like bitcoin. Whereas the entire point of cryptocurrencies is to sidestep central bank regulation, the US digital dollar would be an electronic version of the Fed-backed cash in your wallet.
In this initial report, the Fed stayed as noncommittal as Switzerland, writing that it “takes no position on the ultimate desirability” of a digital dollar. So much for this report being highly anticipated… although Bitcoin pulled back again this week, it can’t possibly be anything to do with this report.
In earnings news, Netflix stock plunged over 20% after it disappointed on subscriber numbers, despite hits like “Squid Game.” Last week it also hiked US and Canadian prices as growth in North America stalled. Basically, they have so much more competition now, having grown at an incredible pace recently due to the pandemic.
Peloton is temporarily halting production of its spin bikes and treadmills as demand for its connected fitness equipment has faced a “significant reduction” since mid-pandemic. In other words, there are thousands of unsold bikes and treadmills sitting in storage depots.
On this news, the stock tanked below its IPO price and was temporarily halted for trading. Shares have lost 70% of their value since November…yikes!
It’s only temporary though, the pause is for two months to see if they can sell their unsold inventory. Quite the challenge for the company.
Amazon is opening a clothing store that features AI-driven recommendations and touchscreen-order dressing rooms. Already America’s #1 clothing seller, they are promoting their own private labels. Watch out high street, your days may be numbered. In fact, they are not only coming for you online, they are opening their own physical department store soon. No industry is safe from the mighty Zon!
In acquisitions news, Microsoft’s $70B Activision bid is the biggest cash deal ever. Sales across the gaming industry boomed 27% during the lockdown in 2020 and continued growing last year, with high expectations for the future. And Activision has some of the most successful brands in the history of gaming. On this news, Sony, the owner of Playstation dropped like a stone, sliding over 10%.
Lastly, an interesting fact:
EVs sales in Europe beat diesel-car sales in December for the first time, but gas-powered cars still sold best of all….for now.
That’s it from me, It’s Friday, time to down tools, thanks for watching, and bye for now.