Category: INO.com Contributors

Block and PayPal - Ostensibly Bottomed

Posted on by Noah Kiedrowski

Before the massive market rotation and tech-heavy selling, specifically in high beta and richly valued stocks, fintech had been in a multi-year secular growth trend. Recently, high-quality names in the space such as Block (SQ), formally Square, and PayPal (PYPL) have seen their stocks nearly cut in half. Block has come down from $298 to $138 or a 54% drop, while PayPal has come down from $310 to $179 or a 42% drop. All the rage has been about the buy-now and pay-later platforms as a disruptor to the entire payments space. However, Block came through with a $29 billion, all-stock deal to buy Afterpay, a major buy-now, and pay-later platform. Block's acquisition highlights consumers circumventing traditional credit, especially younger buyers, for installment loans. PayPal also offers their version of buy-now and pay-later offering, which showed fantastic growth over the holiday season and a surge of 400% on Black Friday alone.

Both Block and PayPal are firmly in the buy-now and pay-later space while also enabling businesses at the point of sale, analytics, peer-to-peer payments via Venmo (PayPal) and Cash App (Block), small business lending, cryptocurrency transactions, and support traditional credit card integrations into their platforms. Block and PayPal offer end-to-end financial solutions for businesses and consumers while powering the next generation of financial technology. These financial technology companies are creating additional revenue verticals while addressing unmet needs in the financial services space. Both Block and PayPal may offer long-term growth at very reduced valuations due to the tech-heavy selling, when factoring in their end markets are current growth rates. Continue reading "Block and PayPal - Ostensibly Bottomed" →

A Cynical Fed Is A Dangerous Fed

Posted on by Gary Tanashian

A stroll through recent and not so recent inflationary history. On ‘Fed minutes Wednesday’ the media amplified the noise, the machines are doing what the machines do and running with it, and it’s all eyes on the great and powerful Fed (of Oz).

The Fed created the cyclical inflation (in NFTRH we detailed and managed the process successfully in real-time) and thus the Fed created the cycle. In 2021 the Fed was exposed to the public as the agent of inflation it actually is, and when the inflation threatened to get out of hand they went into damage control mode. Now the Fed is trying to cool the inflation, which means cooling the cycle itself. You can’t have your inflated cake and eat it too. Not when the racket is exposed to the public.

Okay now, that second to last line triggered a memory and sent me to YouTube. Now I have distracted myself with a good laugh.

Moe: “Now look what you did; you deflated it!”

Larry: “Hey, we better blow it up again!”

Moe: “Give it the gas. Larry: “Gas on”. Moe: “Gas on”…. “Gas off!”. Larry: “Gas off”. Moe: “That oughtta be enough…”

Man blows out the candles and BOOM!!!! Classic, and so appropriate. Continue reading "A Cynical Fed Is A Dangerous Fed" →

Bitcoin 2022 Price: $113,972!

Posted on by Wayne Burritt

While I’m not in love with price predictions, when I figured out a reasonable 2022 target for Ethereum (ETH), I have to admit I kinda enjoyed it.

So, I figured, why not kick off our first installment of 2022 with a bold prediction of where we think the price of Bitcoin (BTC) is headed over the next 12 months?

For this exercise, we'll ignore the fundamental factors that are in play behind these price movements. Instead, we'll just look at some charts, do a little math, and see where our BTC prediction journey leads us.

So, let's get started! Continue reading "Bitcoin 2022 Price: $113,972!" →

My Top Sector For 2022 And Beyond

Posted on by Matt Thalman

Since the start of the pandemic, there have been a number of supply chain and global shortages of different products. But one industry had a shortage of their product not only because of the pandemic-related supply chain problems but because of the rapid increase in demand for the product. More so, the product is seeing demand increases in not just one or two industries in which it serves. Still, nearly every single industry and these products are such items that you and I use literally countless times every single day.

Have you figured out the industry that I am talking about is semiconductors?

The global chip shortage has affected more than just computer sales, but vehicle sales, kitchen appliances, and much more due to a number of different factors that all hit the industry with demand, much around the same time. For example, the auto industry began increasing demand for chips due to more smart driving vehicles and even driverless technologies being options in new cars hitting the market. Kitchen appliances are also demanding more chips due to the "internet of things" movement, which now has nearly every device and appliance in our homes connected to the internet. We now not only have smartphones but smart refrigerators and ovens. Continue reading "My Top Sector For 2022 And Beyond" →

2022 Financials Outlook

Posted on by Noah Kiedrowski

2021 Tailwinds

The big banks have benefited from a confluence of a rising interest rate environment, post-pandemic economic rebound, financially strong balance sheets, a robust housing market, and the easy passage of annual stress tests. Earnings season kicks off in January for all the major financials. The most recent earnings reports from the core financials such as Bank of America (BAC), JPMorgan Chase (JPM), and Goldman Sachs (GS) all reported very strong quarters with stock prices breaking out to all-time highs prior to the Q4 overall market turbulence. The biggest banks, by assets, posted profit and revenue that beat expectations. These results came on the heels of booming Wall Street deals and the release of funds previously earmarked for pandemic-related defaults. The big bank cohort is in a sweet spot of a post-pandemic consumer, with rising rates and balance sheets to support expanded share buybacks and dividend increases. These stocks are inexpensive and stand to capitalize on all these tailwinds heading into 2022.

Resilient Consumer

The pandemic has been going on for two-plus years, and the big banks have navigated the coronavirus volatility over this stretch. Throughout the rolling pandemic, the consumer has been resilient, and the potential worst-case financial downsides did not materialize (i.e., massive loan defaults). In addition, the consumer has been strong in retail, housing, autos and the overall holiday spending was robust.

Bank of America CEO Brian Moynihan stated that whether it was a return to loan growth, credit-card signups, or economic indicators like unemployment levels, the company was back in expansion mode. "The pre-pandemic, organic growth machine has kicked back in," "You see that this quarter, and it's evident across all our lines of business." Loan balances at BAC increased 9% on an annualized basis from the second quarter, driven by strength in commercial loans, the company said. Continue reading "2022 Financials Outlook" →