Facebook's Evolution - The Metaverse

Posted on by Noah Kiedrowski

The legacy Facebook branding has been officially decommissioned as the company looks to the future with the metaverse in its sights. As such, the newly branded company is conveniently called Meta Platforms Inc. (FB), thus firmly placing the company's future in the metaverse space. Albeit its social media properties will still be vital to the company, Meta believes that its future will be in the metaverse. This rebranding comes at a pivotal time after a string of public relations debacles stretching over several years. The underlying stock has been beaten up over the past month, falling from $384 to $312 or 19% from its 52-week high. This double-digit decline places Meta in very inexpensive valuation territory relative to its technology peers, and it's one of the cheapest high-growth stocks. With a firm pivot towards future end markets via the metaverse along with its social media prowess, its valuation is very appealing at this juncture.

Meta
Figure 1 – Facebook’s rebranding and new Meta logo that reflects the company’s new direction into the metaverse

The Metaverse

Meta strives to be a leader in the nascent metaverse, the intersection of virtual reality, augmented reality, three-dimensional video environment, and an all-encompassing virtual environment. It's a combination of multiple elements of technology, including virtual reality, augmented reality, and video, where users "live" within a digital universe. Supporters of the metaverse envision its users working, playing, and staying connected with friends through everything from concerts and conferences to virtual trips around the world. Mark Zuckerberg estimates it could take five to ten years before the key features of the metaverse become mainstream. But aspects of the metaverse currently exist. Ultra-fast broadband speeds, virtual reality headsets, and persistent always-on online worlds are already up and running, even though they may not be accessible to all. Continue reading "Facebook's Evolution - The Metaverse" →

Is The Dollar Going To Steal The Santa Claus Rally?

Posted on by Aibek Burabayev

Top metals failed to keep on the bullish track set earlier. A heavy-duty dollar reinforced by historically high inflation, earlier tapering expectations, and a turn to safety puts pressure on precious metals.

Let us see what is currently happening with the Dollar Index in the daily chart below.

Dollar

The well-known "Double Bottom" (blue) pattern has emerged in the summer. It is a textbook case as all stages went precisely as they should appear.

The focus was on the breakup of the so-called "Neckline" (black horizontal line) located at the top between the two bottoms at $93.44. The first attempt to crack that level occurred at the end of August, but it failed. After a small retracement, the second attempt at the end of September succeeded in breaking out. The impulse was so strong that the price overshot the Neckline with a big margin to hit the fresh one-year top of $94.5. Continue reading "Is The Dollar Going To Steal The Santa Claus Rally?" →

The Battle Against Inflation Begins

Posted on by George Yacik

There shouldn’t be too many surprises coming out of this week’s Federal Reserve monetary policy meeting. The newly hawkish Fed is likely to formally announce its intention to accelerate the tapering of its asset purchases, as Fed chair Jerome Powell told Congress recently, echoed by other Fed officials so that the program ends sometime around March of next year, rather than several months later, in order to ward off the inflation that Powell now concedes isn’t transitory.

The bigger question is, will the Fed actually be successful in putting the inflation genie back in the bottle? After trying unsuccessfully for more than 12 years to lift inflation past its 2% target, why should we now believe that the Fed suddenly has the smarts and the oft-mentioned “tools” to rein in inflation that is now at its highest level in several decades?

The data-driven Fed has more than enough justification to expedite the taper, which would then lead the Fed to start raising interest rates off zero soon after, rather than waiting until sometime at the end of next year or even 2023.

Inflation

On Friday, the government announced that the year-on-year rise in the consumer price index jumped to 6.8% in November, up from 6.2% the prior month and the fastest pace in nearly 40 years. It was also the sixth straight month that it topped 5%, adding further evidence that the rise in inflation this year is anything but temporary. The YOY rise in the core index, which excludes food and energy prices, rose 4.9%, up from October’s 4.6% pace and the steepest increase since 1991.

Does that sound transitory to you? Continue reading "The Battle Against Inflation Begins" →

Weekly Stock Market Forecast

Posted on by The INO.com Team

This week we have a stock market forecast for the week of 12/12/21 from our friend Bo Yoder of the Market Forecasting Academy. Be sure to leave a comment and let us know what you think!

The S&P 500 (SPY)

SPY Weekly Chart - Stock Market Forecast

The S&P pump started again in earnest on Tuesday and basically hasn't done anything since. If we turn lower on Monday, it would solidify the lower high I have been forecasting. We are so close to the highs that I would suspect there will be some attempt at a breakout, even if it is short-lived.

So next week will be a pivotal one; if we turn, then things should begin to accelerate to the downside. If we break out, then I'm stuck back into a holding pattern as I wait for the energy to dissipate. Continue reading "Weekly Stock Market Forecast" →

Financial Sector May Rally 11% - 15% Higher

Posted on by Chris Vermeulen

The financial sector is poised for a very strong rally into the end of 2021 and early 2022 as revenues and earnings for Q4:2021 should continue to drive an upward price trend. The US Federal Reserve is keeping interest rates low. At the same time, the US consumer continues to drive home purchases and holiday shopping. Strong economic data should drive Q4 results for the financial sector close to levels we saw in Q3:2021. If that happens, we may see a robust rally in the US Financial sector over the next 45 to 60+ days.

The strength of the recent rally in the US major indexes shows just how powerful the bullish trend bias is right now. Some traders focus on the downside risks associated with the US Federal Reserve actions and/or the concerns related to inflation and global markets. I, however, continue to focus on the strength in the US major indexes and various sector trends that show real opportunities for profits.

Comparing Sector Strength

The following two US market sector charts highlight the performance over the last 12 vs. 24 months. I want readers to pay attention to how flat the Financial Sector has stayed since just before the 2020 COVID event and how the Financial Sector has started to trend higher over the past 12 months. This is because the shock of COVID briefly disrupted consumer activity. Yet, consumers are coming back strong, driving retail sales, home sales, and the continued strong US economic data. Therefore, it makes sense that the Financial sector should continue to show firm revenue and earnings growth while the US consumer is active and spending. Continue reading "Financial Sector May Rally 11% - 15% Higher" →