Friday’s Weekly Wrap Up 4/30

Friday marked the end of a great month for the stock market. The S&P 500 for example finished the month of April up 5.29%. The S&P 500 experienced its biggest gain this past month since November 2020. This past week however was filled with a mix of ups and downs for the overall market and today ended down for many big names.

Earnings season is in full swing and this past week (4/26-4/30) was full of some of the biggest companies around releasing their earnings statements. I discussed some of the big tech names that beat expectations more in detail in my last post. Some companies like Amazon and Google experienced record gains that immediately had a huge positive impact on their stock price. And there were also some companies like Twitter that didn’t meet analysts’ expectations and have had a sharp drop in their stock price. Twitter went from trading around $66 per share down to $55 overnight.

In IPO news, Endeavor Group Holdings (EDR), the parent company to the UFC (Ultimate Fighting Championship), PBR (Professional Bull Riders), ELeague, and the Miss Universe pageants among other things, released its IPO on Thursday 4/29. EDR had a target price of $24 and has done well in its first two days of trading. Endeavor’s price ended at $27.56 on Friday evening. This could be a good IPO to jump on early considering the growing popularity of the UFC and ELeague.

In cryptocurrency news, Bitcoin (BTC) had a good rally this week and is up almost 7%. Bitcoin started the week trading around $50,000 and is ending the week finally being priced above $57,000 again. Ethereum (ETH) has had a great week by setting new all-time high prices for itself over the past few days. Ethereum has been consistently trading above $2,700.

It’s been an exciting week in the investment world with a lot going on between the stock market and cryptocurrency market. What do you think was this week’s biggest story? What are your thoughts on this week’s earnings report news? Leave me comment and let me know.

Photo by Markus Winkler on Unsplash

Tech Giants Crush Earnings Report Expectations

This was a huge week for giant tech companies including Apple, Google, Microsoft, Facebook, and Amazon just to name a few. They all released their quarterly earnings statements, and they all beat expectations. Many of the companies reported huge double digit growth. A full list of the different companies that reported their earnings this week can be found online.

Amazon (AMZN) for example performed better than expected and just reported a 44% increase in their revenue. The bar was set high for them this year with expectations for their Q1 revenue to be $104.57 billion. Amazon had first-quarter revenues of $75.5 billion last year and they absolutely demolished expectations when they reported $108.5 billion for Q1 this year. Their earnings per share (EPS) are $15.79 versus the $9.69 that was expected.

Alphabet Inc (GOOG), which is Google’s technical corporate name, also reported fantastic numbers. They were expected to have an EPS of $15.82 and they almost doubled it by reporting and EPS of $26.29. Alphabet’s revenue for Q1 was $55.31 billion vs. $51.70 billion expected. Google’s revenue rose 34% from the same period last year. The good financial news caused their stock price to skyrocket overnight from around $2,300 per share up to above $2,400 per share.

Tesla (TSLA) was another company to beat Wall Street expectations this week. Estimates for their EPS were expected to be 0.79 and they actually reported 0.93 this quarter. Tesla’s revenue was $10.39 billion vs. $10.29 billion expected. This is up 74% from a year ago. Unlike Alphabet and Amazon that experienced a sharp rise in their stock price, Tesla has been on a downward slope ever since reporting their earnings.

Some analysts are skeptical about Tesla because they had some other ways of generating revenue besides normal car and solar panel sales. Tesla made a profit of $101 million this quarter from selling some of the Bitcoin it had previously invested in. Tesla also recorded $518 million in revenue from sales of regulatory credits during the period. The company did this while also delivering a record 184,800 Model 3 and Model Y cars.

The tech sector all had an amazing quarter, including Tesla. They beat their record of vehicles delivered in a quarter while making some smart business decisions to generate extra capital. What are your thoughts on Tesla and all the other earnings reports that were released this week? Leave me a comment and let me know.

Photo by Chris Ried on Unsplash

What Exactly is Payment for Order Flow?

Ever since Robinhood was in the news back in January for their involvement in the GameStop controversy, the way brokerage firms get paid has come into question. Popular stockbrokerage companies such as Robinhood, Webull, E*Trade, and TD Ameritrade all utilize a practice that is known as “payment for order flow”. Payment for order flow is the process where the stockbrokers receive payments from the market makers (dealers) for routing trades to them. The brokerage firm is essentially acting as the middleman between you (the retail investor) and the market makers.

Who are the market makers? The bigger market makers are Citadel Securities, Susquehanna, Virtu, Two Sigma and UBS. The SEC defines a “market maker” as a firm that stands ready to buy and sell stock on a regular and continuous basis at a publicly quoted price. Market makers are essentially companies or individuals that buy up large quantities of stocks to sell hoping to make a profit on the bid–ask spread, or turn.

The market makers profit from buying shares for cheap and selling them for more expensive. The brokers on the other hand profit through making the trades actually happen by acting as the wholesaler between retail investors and market makers. The broker basically directs traffic to the market maker that can best fulfill the order. The stockbrokers will generally have prearranged agreements with market makers who will compete for the order flow.

The controversy with the payment for order flow process comes into play here. While the brokers should choose the market maker that will quickly and efficiently fill the order at the lowest market price, this isn’t always the case. An order flow agreement might make brokers direct traffic to a prearranged third-party. The third party compensates the broker for sending traffic their way, often at the expense of the retail investor.

One of the biggest worries with payment for order flow is that the brokerage firms might be routing orders to a particular market maker for their own benefit and not in the best interest of the the investors. Other concerns are that order flow arrangements empower market makers with the additional liquidity to bundle large orders, deal from inventory, and take the opposite sides of trades to buffer exposure risk.

Payment for order flow has been considered revolutionary for retail investors because it has all but eliminated the commissions and fees associated with trading stocks. But some argue that the negative consequences caused by the payment for order flow process outweigh the benefits of not paying commissions and fees. What are your thoughts about payment for order flow? Leave me a comment and let me know.

Photo by Vance Alm

Friday’s Market Update

This week was full of ups and downs in the stock market and especially in the cryptocurrency market. This week’s biggest story was Dogecoin. The Dogecoin story started last week on 4/15 when the joke cryptocurrency started rapidly rising in value. I go into detail about Dogecoin’s attempt to shoot for the moon in my previous post, “Dogecoin to the Moon… and Back. Signs of a Crypto Bubble?“.

Dogecoin experienced explosive growth of more than 450% in less than a week, peaking in value around $0.42, with the culmination supposed to happen this past Tuesday, 4/20. The hype train was trying to convince people the price of Dogecoin would go up to $0.69 on 4/20 (clearly a lot of financial analysis went into coming up with that valuation and timeframe…). “Dogeday” as it was being called was an absolute bust and as of 1am on 4/20, the price of Dogecoin (DOGE) was on a downhill rollercoaster and it is currently trading around $0.23.

In other cryptocurrency news prices for almost all cryptos, including Bitcoin and Ethereum, took a plunge in value over the weekend and they still haven’t recovered. Ethereum (ETH) briefly recovered and actually reached a new high when it was trading around $2,600. Bitcoin on the other hand has dropped even more from its weekend dip. Bitcoin slipped under $50,000 for the first time in almost two months, and it’s still hovering around $50,000.

Thursday afternoon, the stock market looked like it jumped off a cliff after news leaked from the White House that President Biden is looking to implement a massive tax hike on companies and wealthy individuals. The leaked report suggested Biden was considering increasing the capital gains tax rate on those earning more than $1 million to 39.6%. The current base capital gains tax rate is 20%. The response on Thursday seems to have been an overreaction because the stock market is doing very well today, Friday.

This has been an exciting week, especially in the cryptocurrency market. Next week should be interesting with mega-cap companies like Apple, Amazon, Google, and Facebook will be releasing their first quarter earnings statements. The earnings from these giants will surely have an impact on the overall markets so I’ll be sure to keep you up to date. Don’t forget to follow my blog so you can stay informed on everything investment related.

Photo by Vance Alm

Investing 101: Dividends

What are dividends? A dividend is the distribution of some of a company’s profits or earnings to its shareholders. Dividends are generally paid out on a regularly scheduled basis, this typically happens quarterly. Not all companies pay dividends though so this is something important to look out for in the stocks your choose to invest in.

Companies that pay dividends are usually the larger, more established companies with more predictable profits. These companies are often in the banking, utilities, or oil and gas industries. Because growth is generally slower in these industries compared to the technology or biotech sectors, they use dividends as a way to attract investors. Dividend payments vary in amount from company to company, they can even vary in the same company but they are usually between 1%-5%.

Choosing a dividend stock can be tricky because you want to balance a good dividend yield with a strong company that has a stock price that could still potentially rise in value. Chevron (CVX) is one of the best value dividend stocks because of it has a long history of dividend growth. Chevron currently offers a dividend yield of 5.11%. The pharmaceutical company AbbVie (ABBV) has 8 successive years of dividend growth with a dividend yield of 4.73%. Verizon (VZ) has a dividend yield of 4.38% and it has raised dividends in the past 8 straight years.

What are your thoughts on dividends? Do they help influence you to choose a certain stock to invest in? Leave me a comment and let me know your thoughts on dividends. Don’t forget to follow my blog so you can stay up to date on the latest investing news.

Photo by Sharon McCutcheon on Unsplash

How to Buy Bitcoin and Use Coinbase

In my last blog, “Coinbase, Bitcoin, and Crypto are All Going Crazy“, I discussed Coinbase’s DPO that was released on Wednesday, 4/14, and all the hype around its launch and the cryptocurrency market in general. I mentioned that I’ve been keeping a close eye on the cryptocurrency market but I was still skeptical (mainly for not investing sooner). But I finally jumped on the bandwagon and downloaded Coinbase and bought some Bitcoin. I also bought a share of Coinbase (COIN) while I was caught up in the excitement of finally joining the crypto craze.

I’ve used a few different stock trading apps but this the first time I’ve used a cryptocurrency exchange and the process to get started was super simple. First, download Coinbase from your app store and enter your name, email address, and create a password. Then, you enter your bank information or debit card information, this is different than most brokerage apps that require your bank account and routing number. Although, you’re only allowed to buy cryptocurrency when you enter your debit card. You need to enter your bank account information in order to sell, that way the money can be transferred into your bank account if you choose to cash out.

Once you have a form of payment linked to your account, you’re all ready to join the crypto craze! Coinbase’s homepage shows you your portfolio balance, your watchlist, top movers, and some news articles related to cryptocurrency. The tab to the right of the homepage is the Portfolio page, which shows the number of coins, fractions up to eight decimal points over, of Bitcoin or whichever cryptocurrencies you own. This page also shows a line graph displaying the your portfolios performance. The middle blue button is like a quick buy/sell button. The tab to the right of the middle button is the Prices page and displays prices for a huge variety of different cryptocurrencies. This page has tabs towards the top where you can choose to see the top gainers and losers for the day. The last tab on the bottom right is the Settings page that contains your account information, settings, and a help/support section.

I’ve kept a close eye on Coinbase’s share price all day and it was hovering around $333 this morning but then dipped down to around $324 in the later afternoon. I jumped in and bought the dip, so hopefully the price doesn’t drop anymore. I been hearing analysts talk about this stock price possibly going up to $500 in the future. If people are literally buying into the crypto craze like I am, I’m hopeful Coinbase continues its strong growth which will fuel their stock price’s rise.

What are your thoughts on Bitcoin, Coinbase, and cryptocurrencies? Leave me a comment and let me know. Don’t forget to follow my Twitter where I’m constantly posting about investing, the stock market, and cryptocurrency.

Photo by Pierre Borthiry on Unsplash
High Finance Thoughts

Entertaining thoughts about investment banking and the stock market.

Water Front- Peter Mantius

Environmental politics in New York's Finger Lakes

Archyde

archyde.com

Peter's Stock Market Blog

Peter's View of the financial markets

Etienne Kiss-Borlase

Financial Expert, Art Collector

The Frontier Post

From KP to DC

Crypto Timeless

Latest crypto news and insights

24/7 Wall St.

Insightful Analysis and Commentary for U.S. and Global Equity Investors

SEO | Google Ads | Social Media Consulting

Entertaining thoughts about investment banking and the stock market.

Zen Media

Entertaining thoughts about investment banking and the stock market.

Cocktails & Costumes

A Dedication to Delectable Drinks, Dress-ups, Dinner Parties and Decoration

Gin Soaked Blog

A blog about all things spirit-ual

The Beercyclist

bicycles, beer and the journey of life