- Crypto exchange FTX looks set to collapse after rival and early investor Binance pulled out of a last-minute rescue acquisition
- Inflation has hit its lowest level since January this year, with the latest annual figure down to 7.7%.
- The stock market responded strongly with the biggest gain since 2020
- Top weekly and monthly deals
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Major events that may affect your portfolio
In 2008, the collapse of Lehman Brothers was a major turning point for the financial crisis. It shook the financial system, had a domino effect around the world and led to sweeping changes in the way the industry was regulated.
Right now, it looks like FTX is doing the same for crypto as it’s been a crazy week for the sector. A few days apart, FTX saw venture capital fund Sequoia Capital write down its $214 million investment in the company to $0 from its $32 billion valuation in January this year.
The complete details of the story are complicated and we have covered the story so far. The short version is that early investor-turned-competitor Binance announced that they would be dumping their entire $529 million worth of FTX’s own token – FTT.
This led to a run on the platform as customers feared a liquidity crisis, which was well established.
Binance then offered to save the day with an emergency acquisition (for a rumored $1), before pulling out of the deal the next day, citing concerns about their business practices and an investigation by US regulators.
Unsurprisingly, all this drama has caused crypto to tank. Over the past five days, Bitcoin is down almost 20% from its already low levels, Ethereum is down over 20%, and other coins like Chainlink and Ripple are down by the same amount.
For the first time in a long time, we have seen a meaningful decline in inflation. That’s right, once we’re not talking about record highs for rising prices, the headline annual rate of 7.7% is the lowest since January this year.
The October figure came in at 0.4%, a bigger difference than analysts’ estimate of 0.6%. Core inflation, which strips out the often volatile food and energy sectors, slowed dramatically from the previous month, rising 0.3% from 0.6% in September.
Really good news all around. This shows that the Fed’s series of record high rate hikes is finally working and is also being helped by a global supply chain that is slowly returning to normal.
The Fed may be able to slow the pace at which it raises rates, as Jerome Powell suggested he wanted to do after the last FOMC meeting.
The market responded strongly to this news. The S&P 500 had its best day since 2020, opening up more than 3% and climbing 5.5% on the day. The NASDAQ 100 was even better, finishing the session up 7.4%.
This week’s top theme from Q.ai
One person who is likely to be particularly happy about the focus on crypto markets and inflation figures this week is Mark Zuckerberg. His announcement of thousands of layoffs affecting about 13% of Meta’s workforce has been pushed aside, but that doesn’t make it a big deal.
It’s been a major theme in tech this year, with many companies scaling back after growing too fast during the pandemic’s bull run. The list of companies that have cut their numbers this year includes Stripe, Spotify, Coinbase, Lyft, Snap, Twitter, Peloton, Shopify, Netflix, Robinhood, Tesla and Microsoft.
Yes, a lot.
You might think this is bad news for their stock prices, but you’d be surprised. Meta, for example, has seen its stock rocket up nearly 25% this week. Depending on the reason behind the series of layoffs, it could actually be a bullish sign.
Of course, there are real concerns about the future of the business when it comes to a company like Peloton. However, for people like Meta, the layoffs mean a leaner machine and a greater focus on profits, for a company that isn’t in danger of disappearing overnight.
So forget tech stocks after a year, things start looking a little brighter. One of the ways we help investors aim to generate the best risk-adjusted returns is by using AI to forecast and balance exposure to different verticals in the sector every week.
The AI-enabled Emerging Tech Kit aims to predict the weekly performance and volatility of the universe of tech ETFs, large tech companies, growth tech companies and cryptocurrencies by public trusts. It then automatically balances investors’ funds to provide the best mix.
Top business ideas
Here are some of the best ideas our AI system recommends for the week and month ahead.
Hudson Technologies (HDSN) – Green Tech Company is one of us Top buys for next week With an A rating in our quality value and growth factors. Revenue has grown 78.2% over the past 12 months.
heartbeam (beat) – The digital healthcare company remains ours Top short for next week With our AI rating they have quality value and low speed volatility in F. Net income for the 12 months ended June was $8.94 million.
Intrepid Potash (IPI) – Fertilizer manufacturer is one of us Top buys for next month With an A rating in our growth and technical components. Revenue has grown by 50% in the last 12 months.
Shiftpixy (PIXY) – Gig work company is one of us Top shorts for next month With our AI rating they have low speed instability and a quality value of F. The company lost more than $40 million for the year to May 31.
Our AI’s Top ETF Trades for the Next Month Investing in Spanish and German equities and US small-caps and short consumer staples. top buy There are the iShares MSCI Span ETF, the Schwab US Small-Cap ETF and the iShares MSCI Germany ETF. Top shorts There are the iShares US Consumer Staples ETF and the Vanguard Consumer Staples ETF.
Recently published Qbits
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