AMAZON'S CLOUD NINE
Dear clients,
Amazon.com shares rose more than 8% on Friday on signs that the company's growth engines, e-commerce and cloud technology, are doing well in a volatile economy, helping the broader market fend off Apple's 4.8% drop after iPhone sales slumped.
Reports summarised a positive earnings season for most major US tech companies, from Google to Meta, thanks to a rebound in the digital advertising market and increased demand for cloud services after nearly a year of decline.
Shares in retail giant Amazon closed at a near one-year high and boosted its market value by more than $109 bil.The better-than-expected performance of Amazon's cloud business in the second quarter also boosted other members of the cherished "trillion-dollar club", with Microsoft and Alphabet up more than 2%. Wall Street analysts said Amazon's above-forecast quarterly earnings and sales showed that both of its key businesses can grow together after two years of "nasty surprises."
According to Refinitiv, at least 26 analysts - nearly half of those analysing the company's stock — raised their price forecasts for Amazon, bringing the median forecast to $170. That represents a gain of nearly 32% for Amazon stock, which is up nearly 50% so far this year.
The surge in Amazon stock reflects analysts raising their estimates for its earnings. At $139.57, the stock is valued at 47 times consensus earnings per share in 2024, according to Refinitiv's updated estimates.
ISSUED IN DIGITAL. STABLECOIN BY PAYPAL
Dear clients,
On Monday, payments giant PayPal announced the launch of a dollar-stablecoin, becoming the first major financial technology company to adopt digital currencies for payments and transfers.
The announcement by PayPal, whose shares rose 2.66% on Monday, reflects a show of confidence in the troubled cryptocurrency industry, which has struggled with regulation over the past 12 months, exacerbated by a string of high-profile crashes.
While "stable coins" have been around for quite some time, they have yet to successfully embed themselves into the mainstream consumer payments ecosystem.
Instead, consumers mostly use stablecoins as a means of trading other cryptocurrencies such as bitcoin and ether. The world's largest stablecoin is Tether, followed by USD Coin, issued by cryptocurrency provider Circle.
Previous attempts by major mainstream companies to launch stablecoins have met stiff resistance from financial regulators and politicians. Plans by Meta, Facebook back then, to launch the Libra stablecoin in 2019 were scrapped after regulators raised concerns that it could disrupt global financial stability.
Since then, a number of major economies, from the United Kingdom to the European Union, have drafted rules governing the circulation of stablecoins. The EU rules will come into force in June 2024.
PayPal's stablecoin, dubbed PayPal USD, is backed by dollar deposits and short-term U.S. Treasuries and will be issued by Paxos Trust Co. It will be gradually made available to PayPal customers in the US.
The token will be exchangeable for US dollars at any time and can also be used to buy and sell other cryptocurrencies that PayPal offers on its platform, including bitcoin.
WEEKLY OUTLOOK: GOLD, SILVER
Dear clients,
According to the World Gold Council, the demand for gold is steadily decreasing, thus shifting the price dynamics. This time, we'll be looking at precious metals, their current status and future movements.
Join us on August 9 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
If you missed the previous webinars, you can always find them
here.