WEEK OF AUGUST 28, 2023
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Important Prices
What’s Moving The Markets?
Interest Rate Hikes Incoming
Federal Reserve Chair Jerome Powell has indicated that more interest rate increases are forthcoming to address persistently high inflation, asserting the Fed’s readiness to raise rates further despite acknowledging progress in the economy’s recovery.
Abandoning the US Dollar
Brazil’s President announced at the BRICS Summit that the economic alliance will forsake the US dollar for trade settlements, as part of the bloc’s ongoing de-dollarization efforts.
BRICS Oil Control
Six of the world’s largest oil producers, including Saudi Arabia, Russia, China, Brazil, Iran, and the United Arab Emirates, are now members of BRICS, a significant development in the alliance’s efforts to promote local currencies and reduce reliance on the US dollar for oil trade settlements.
Crypto Tax Proposal
The US Treasury Department has proposed a new rule that would require cryptocurrency brokers, exchanges, and payment processors, to report user information on digital asset sales and exchanges to the IRS, aiming to enhance tax compliance within the crypto industry.
Mastercard Terminates The “Binance Card”
Mastercard has terminated its collaboration with Binance for the Binance Card, a service enabling purchases using regular currencies backed by crypto holdings, without disclosing reasons, as Binance grapples with legal issues, including a lawsuit by the SEC, while Mastercard’s other crypto card partnerships remain unaffected.
S&P Outlook
Bull Case: Bulls defending Daily demand at 4348.75 but will need to break above supply at 4485 and ultimately 4517 to clear supply. If price is able to trade above, next possible resistance sits at 4551.50
Bear Case: Bears defended 4485 supply and held price below 4495 pivot. Currently bouncing between two zones and bears will need to break below 4306.25 to clear demand with next possible target at 4256.50.
EARNINGS RELEASE CALENDAR
FOR WEEK OF AUGUST 28th
Expert Insights & Predictions
Netflix – Fundamental Analysis
Netflix’s recent performance is strong, yet accompanied by challenges. Q2 showed impressive subscriber growth, surpassing expectations, while Q3 guidance fell short, raising concerns. Strategies include paid sharing and ad-supported streaming, shifting its valuation focus from unit growth to metrics like ARPU (average revenue per user) and cash flow. ARPU reflects the revenue generated from each subscriber, providing insights into Netflix’s revenue potential. As 2023 unfolds with growth levers like paid sharing and pricing adjustments, ARPU’s role becomes crucial in shaping the company’s financial landscape.
Analysts expect around 21.5 million new subscribers in 2023, rebounding from about 9 million in 2022 but still below pre-pandemic levels. Bloomberg projections indicate sales could grow by a low-double-digit percentage until 2024, considering some foreign exchange challenges. If Netflix succeeds with their ad and paid-sharing strategies, revenue growth could even reach mid-teens percentages. 2023 is a transitional year with various growth levers in action, possibly impacting future growth. Strong free cash flow and evolving competition dynamics are notable.
Netflix – Technical Analysis
Netflix has established a lengthy upward trajectory over recent months, yet its duration surpasses that of Amazon’s. Since July 2022, Netflix’s trajectory has been ascending, rebounding from its most substantial correction in the past decade when it experienced a decline of over 75% between November 2020 and May 2021. Today, on August 23rd, a breakout has been confirmed, coinciding with a bullish crossover in stochastics as depicted in the picture seen below. This setup, coupled with its highest trading volume over the past month, substantiates the likelihood of the ongoing uptrend continuing.
The primary targets in this trajectory are the immediate resistance levels at 450 and subsequently the recent daily closing point of 477. To maintain momentum, it’s pivotal for the stock to sustain levels above the immediate support of 396, which has undergone multiple tests in the preceding two months. This level holds significant importance in preventing a more pronounced correction that could potentially lead to the lower boundary of its long-term channel, situated at 370. It’s worth noting that the arithmetic scale, as seen above, should be differentiated from the logarithmic scale, where a close below 396 would prompt a breakdown of the current upward trend. — @BBGMarket
Disclaimer: The information provided here is not intended as financial advice.
Economic Data Calendar
