A Red Sweep
Technology aims to bring efficient solutions to stringent societal problems and improve the standard of living for the general population. The critical issue with modern technology is its sustainability. Therefore, the lifespan of many products is short and every now and then, a new generation of solutions is coming into the market. Are tech investors paying multiple times for the same thing?
Like in every other walk of life, there are cycles, trends, and fashions in the world of computer sciences. Several decades ago, languages like Cobol, Basic or C were empowering the software of those times. Technology trends are changing fast, and the propensity of tech specialists towards novelty is high. Therefore, digital solutions tend to become obsolete relatively quickly.
The first websites of the “dotcom” era would currently be a laughing stock. Platforms like “Geocities” or “Angelfire” are long forgotten, being replaced by Google. Technological trends change at a fast pace, and solutions have a high turnover. Therefore, the market pays regularly for new solutions for the same set of problems, thereby ignoring the old ones.
The way tech operates is far from being sustainable, and tech shares have in many aspects features of commodities. Tech companies offer consumers access to intelligence, both human and artificial. Intelligence is the main resource that drives innovation as well as product.
There are still many open questions related to whether the market values correctly the right to access intelligence.
IQ is a commodity, data is a commodity. I'm far more interested in watching people interact at a restaurant with their smartphone. We can all read 'Tech Crunch,' 'Ad Age.' I would rather be living in the trenches. I would rather be going to Whole Foods in Columbus Circle to watch people shop with their smartphones. Gary Vaynerchuk, Belarusian-American entrepreneur, author, speaker, and Internet personality
While hyperinflation ravages the labour and consumers’ prices, the biggest unknown is the Fed’s future attitude with respect to its monetary policy. The market is expecting in March aggressive hikes in U.S. interest rates. Common forecasts indicate a boost of .25%, while more others indicate that a .50% is conceivable. The US Core PCE Prices index climbed in December to its highest level since the early 1980s, triggering an alert about the irreversibility of the inflationary phenomenon. Jerome Powell, Fed’s Chairman, underlined that if inflation gets out of control and degenerates in an inflationary spiral, his institution would take all necessary actions.
Markets delivered strong returns in the last trading session of the week amid an overall bearish sentiment anticipating the coming hike in interest rates.
Friday was a big day for Apple, its share gaining more than 7%. Apple announced to investors all-time record revenue of USD 123.9 billion, 11% up from 2020 and higher than analysts’ average estimate of USD 118.7 billion. The strong message is that the iPhone producers managed to deal with the global chip shortage. This could signal that the unsatisfied demand for electronic components may be curbed and prices may stabilise over the next 12 months.
UiPath share price continues its decline since the flamboyant listing of the Bucarest-based tech giant. Robotic process automation is a field with enormous growth potential, and UiPath is one of the key players in this market. Moreover, the firm has a stable client base and a significant advantage in terms of experience and revenue management compared to its competitors. So, why do investors see things otherwise?
UiPath lost almost half of its value since its IPO because the market questioned its scalability and capacity to deliver growth. But, these are common issues for all software companies. Most probably, UiPath is undervalued, and the outlook should be more favourable than reflected by its price.
In 2021, RobinHood was Wall Street’s sweetheart and Silicon Valley’s rising star. Since its peak record in August last year, Robinhood shares have lost sixfold their value. Forever the company lost more than USD 3 billion and over USD 420 million in the last quarter. With total revenues above USD 1.9 billion, the trading platform has definitely conspicuous traction.
Nevertheless, investors are questioning its long term profitability. The only possible exit at this stage seems to be a takeover from a bigger brokerage firm.
In the early days of the Omicron wave, oil prices had a greyish outlook.
Lockdowns and a decrease in global travel were only a few factors that
contributed to below USD 70 crude prices. In only five weeks, the situation
changed dramatically, and oil is surfing on abullish wave.
Omicron is
a game changer for the oil market, because it made COVID-19 to become
endemic and marked the beginning of a new period where people will
cohabitate with the virus. Thus, the fundamentals for oil consumption are in
the green, while the supply is more volatile than ever.
If tensions between Russia and Ukraine burst into a military conflict, oil price could easily skyrocket to USD 100 and OPEC may not be able or want to supplement the production to stabilise prices.
The Dow Jones Index stopped its decline and ended the week on a positive note, finding support at 34,700. The recent announcement of the Fed about a massive hike in interest rate could mark the beginning of a structural market decline and could trigger a massive sell-off across all equity markets.
Bitcoin ended the week near USD 38,000, recovering slightly from the losses recorded in January. The correction should continue, and Bitcoin could test the USD 30,000 level over the next month.
The Gold ounce slipped last week, closing below USD 1,800 because the stock market was slightly more optimistic. The foreseeable market contraction and the inflationary context are good arguments for a rally in gold prices.
General Disclaimer
The information and data published in this research were prepared by the market research department of Darqube Ltd. Publications and reports of our research department are provided for information purposes only. Market data and figures are indicative and Darqube Ltd does not trade any financial instrument or offer investment recommendations and decision of any type. The information and analysis contained in this report has been prepared from sources that our research department believes to be objective, transparent and robust.
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A Red Sweep
Spooky Sell Signal
Gold Shines at New Highs
The ECB Cuts Again
Slowing Disinflation
Golden-Week Rush
China’s Massive Package
The Fed’s Big Rate Cut
The ECB Cuts Again
Banks Turn Bearish On China
Million-Dollar Gold Bar
Bonds Are Back
Black Monday
Diverging Rate Decisions
Still Strong
Smaller Is Better
The Name Is Bond, Green Bond
Landslide Victory
AI-Frenzy Takes a Break
Bye Apple, Hello Nvidia
The Fed Stays Put
An Indian Rollercoaster
The Name’s Bond, Convertible Bond
Nvidia Does It Again
A Small Relief
From Boom To Bust
Higher For Longer
Still Magnificent
Halve And Havoc
Stubborn Inflation
Choc Shock
An End Of An Era
Britain Bounces Back
China's Goal
Bye iCar, Hello iAI
Nvidia Beats Expectations
Germany Overtakes Japan
Riding The Dragon
China’s Falling Behind
India Outshines Hong Kong
Aging Dragon
US Inflation’s Accelerating
Tesla Lost Its Crown
2023 Market Wrap-Up
The Last Samurai
Fed Teases 2024 Rate Cuts
Bond Market's License to Thrill
Cyber Week Bonanza
OpenAI's Leadership Shuffle Drama
Inflation’s Cooling In The US And UK
Back Into Deflation
Triple Hold On Rate Hikes
The US Economy Is Still Flexing Its Muscles
Inflation’s Refusing To Come Down
Investors Are Bracing For A Dip
An End In Sight
Rate Hike Recess
End Of An Era
China's #1 Ambitions Are Fading
Americans’ Piggy Banks Are Running Low
Trying To Break The (Wage-Price) Spiral
China: A Nation In Deflation
Uncle Sam Gets Downgraded
Twin Hikes
Stagnating Dragon
A Tale Of Three Inflation Stories
Silver Is Shining Bright
UK Inflation: Defying Gravity
The Fed Calls A Timeout
A One-Two Punch
Shrinking Dragon
Keep Calm And Carry On
The AI-ffect Of The AI Mania
SLOOS: Crunch Time Looms
Last Republic
LVMH Pops The Bubbly
India Takes The Population Throne
The End Is Nigh
OPEC Drops the Pump
Why Gold Is Glittering
Can't Stop Won't Stop
To Hike Or Not To Hike
China’s An Underachiever
Cash Is King
What Energy Crisis?
The Name’s Bond, Japanese Bond
The AI War Has Begun
Hikes Everywhere
What Recession?
Shrinking Population
Grab Your Box And Leave
A Gloomy Prediction
It's Darkest Before The Dawn
Elon Fires Himself…
Triple Whammy
No More Zero-Covid?
Eight Billion And Counting
Another One Bites The Dust
No Santa Pause
Big Tech, Big Disappointment
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