Notícias de mercado & insights

The market closed the week down overall as volatility continues due to the Russia and Ukraine conflict. The Dow Jones dipped 0.5%, the S&P500 fell 0.8%, and the NASDAQ performed the worst, declining 1.7%, despite generally positive sentiment from the USA concerning the employment figures released on Friday. Employers added 678,000 jobs to the workforce in February, and unemployment was lowered to 3.8% beating most analysts' expectations.

CPI figures will be on the agenda next week as inflation continues to garner attention. European stocks were hit the hardest, with the DAX losing more than 10% over the week and 4.41% on Friday, as it continues to be hit hard by the conflict. The FTSE also had a tough week and closed Friday down 3.48%.

Commodities had a belter week and got close to their largest rise in prices since 1960. European natural gas more than doubled in price, wheat soared 40%, and oil increased 20%. These increases may have an impact on the energy and commodity sector in the Australian market going forward.

The surge in energy prices has occurred despite economic sanctions that have not targeted Russia’s energy exports. Gold finished the week exceptionally strong, closing at the upper end of the weekly range towards $1,970. The price continues to provide a haven for investors as the volatility remains.

Oil followed its strong closing towards the high of the week at $117.96. Cryptocurrency Bitcoin had shown strength earlier in the week, but it could not hold its highs around $45,000 BTC/USD. It closed the week below $40,000.

Ethereum followed a similar pattern falling to $2,593. FOREX The EUR/USD had a massive drop falling -1.23%. The Euro struggled against all of the currency pairs, recording big drops for the week.

The GBP also was a weak performer for the week. Due to their geographical exposure, the EUR and GBP have been the most sensitive to news from the conflict. The AUD and NZD performed well for the week and have seen a nice move into recent resistance.

What is an ETF Most people have heard of ETFs but not everyone knows what they are. An ETF is an Exchange Traded Fund and they are extremely popular amongst retail investors and novice investors. Companies such as Beta shares, Vanguard, Blackrock and others create and manage these holdings on behalf of investors.

An ETF is a collections of stocks that is grouped together to generally replicate the structure and weighting of an index such as the ASX200 or the Nasdaq. Alternatively, an ETF can also be a collections of assets that represents a sector or industry such as an Energy ETF. The market for ETFs has grown substantially with new ETFs being created regularly.

The value for ETFs in the USA by the end of November 2021 was worth 3 Trillion dollars. The advantages of investing in ETFs is that they are generally well diversified and that they don’t require constant administration or management. In addition, they are seen as being relatively passive as holders of shares of the ETF do not need to manage the buying and selling of the holdings of the ETF.

Many ETFs offer dividend reinvestment plans included many investors will not look at their holdings for a long time. The truth of ‘Passive’ Investing Are ETFs really passive? The reality is ETFs require a great deal of management and administration.

The managers of the ETFs must constantly adjust their holdings accurately to reflect either the rules of the ETF or the weighting of the companies on the index. Therefore instead of the ETFs seemingly operating independently they are actually constantly changing all the time. Some ETFs will adjust by buying or selling shares at the end of the trading day.

As indices rebalance, usually every three month, six months or 12 months, the ETF must reflect those changes. The ‘Flow’ on effect The issue is when an Index rebalances, the ETF is required to buy or sell the stocks that are being removed or added. As ETFs have such large holdings in the individual companies their buying and selling can often have quite a strong effect on the price flow of the shares.

This problem is exacerbated with ETFs that hold small cap companies. These smaller companies are even more at risk of a run by an influx of money coming into an ETF’s buying/selling patterns. This can lead to undesirable outcomes as the managers of the ETF must fight themselves to reach their required buy/sell volume of assets.

Potential Issues Blackrock is one of the companies that creates and hold ETFs in various sectors. One of its ETFs tracks 30 energy stocks. At one stage it held 8% of the shares of one of its holdings of one stock.

The cashflows from investors into the ETF were artificially driving up the price of the stock. Essentially, with so many shares to buy and sell, the ETF is ‘fighting itself ‘to fill its orders. This sees a very sharp increase/decrease in price usually with large volume.

In response to this unique problem the S&P Dow Jones Index in consultation with Blackrock created new rules for holdings to be added to the ETF and improve liquidity. For traders, ETFs create potential trading opportunities because as the old saying says “follow the money”. The ‘liquidity vacuum’ that ETFs create can often be quite aggressive moves to a stock’s price action substantially.

Adobe Inc. (ADBE) announced its latest earnings results after the closing bell on Thursday for its second quarter fiscal year 2022 ended June 3. The American software company reported revenue of $4.386 billion for the quarter (up 14% year-over-year), beating analyst forecast of $4.345 billion. Earnings per share also reported above analyst expectations at $3.35 per share vs. $3.31 per share estimate. ''Adobe achieved record Q2 revenue with strong demand across Creative Cloud, Document Cloud and Experience Cloud,'' Shantanu Narayen, chairman and CEO of Adobe said following the latest financial results. ''We are winning in our established businesses and seeing significant momentum in new categories from content authoring for a broad base of creators to PDF functionality on the web to the leading real-time customer data platform for global enterprises,'' Narayen concluded. ''We delivered another quarter of strong financial results, with greater than $2 billion in operating cash flows demonstrating the strength of Adobe’s growing revenue streams and financial discipline,'' said Dan Durn, executive vice president and CFO of Adobe. ''Our operating model continues to fuel consistent growth, enabling the company to invest in category-leading cloud solutions and emerging innovations that are gaining traction in the marketplace,'' Durn added.

Adobe Inc. (ADBE) chart Share price of Adobe was down by around 2% at the market open on Friday, trading at $357.37 per share. Here is how the stock has performed in the past year: 1 Month -10.80% 3 Month -21.47% Year-to-date -37.22% 1 Year -37.06% Adobe price targets UBS $415 Stifel $500 Baird $450 Deutsche Bank $500 Wells Fargo $425 Mizuho $480 Citigroup $380 Adobe is the 59 th largest company in the world with a market cap of $167.63 billion. You can trade Adobe Inc. (ADBE) and many other stocks from the NYSE, NASDAQ, HKEX and the ASX with GO Markets as a Share CFD.

Sources: Adobe Inc., TradingView, MarketWatch, Benzinga, CompaniesMarketCap

Accenture (ACN) reported its latest financial results before the market open in the US on Thursday. The Irish-American professional services company reported revenue of $16.159 billion for the third quarter of fiscal 2022 vs. $16.04 billion expected. Earnings per share missed analyst expectations for the quarter at $2.79 per share vs. $2.86 per share estimate. ''Our very strong financial results for the third quarter reflect continued broad-based demand across markets, services, and industries, and the continued recognition of the outstanding talent of our 710,000 people.

We continue to gain significant market share, and our services have never been more relevant as our clients turn to us as the trusted partner for the solutions they need to accelerate growth and become more resilient and efficient,'' Julie Sweet, CEO of the company said in a press release after the earnings announcement. Accenture (ACN) chart Shares of Accenture were down by around 1% during the trading day on Thursday at $282.45 per share. Here is how the stock has performed in the past year: 1 Month -3.00% 3 Month -13.07% Year-to-date -31.78% 1 Year -3.01% Accenture price targets Deutsche Bank $364 Cowen & Co. $330 Baird $340 Morgan Stanley $390 RBC Capital $435 Goldman Sachs $386 Barclays $455 Accenture is the 52 nd largest company in the world with a market cap of $179.21 billion.

You can trade Accenture (ACN) and many other stocks from the NYSE, NASDAQ, HKEX and the ASX with GO Markets as a Share CFD. Sources: Accenture, TradingView, MarketWatch, Benzinga, CompaniesMarketCap

November 2021, cryptos are regularly making all-time highs amid a mania like euphoria that increased institutional uptake and a newly launched ETF that crypto traders believed would drive prices even higher towards some of the uber bulls loftier 2021 targets. Two months is a long time in the crypto world and they have lived up to their volatile reputation with the two largest tokens (BTC and ETH) having lost almost half of their value since then. The broader crypto sector has also suffered with more than $1 trillion in losses amid an accelerating panic that the expected Federal reserve tightening cycle will lead to another deep crypto correction.

The question crypto traders are asking is “where to from here?”, is this the start of a deep correction, or an opportunity to Buy the dip? Source: Tradingview While the selling has been relentless since November, it picked up pace after the Federal reserve released their latest minutes in early January. The hawkish tone of the Fed, where it outlined its intention to not only hike rates but to accelerate the tapering of its asset purchase program, saw a broad sell-off of the riskier “bubble” assets, with bitcoin getting hit especially hard amid the rout.

This rapid decline has pushed Bitcoin’s RSI indicator to an extreme oversold level, a level not seen since the pandemic crash of March of 2020. Source: Tradingview Also bringing the price down to within touching distance of the all important, major support level of around 30k USD per token, a support that held previous sell offs in 2021. Source: GO MT4 While these technical may give confidence to the bulls that a bounce is due, there is one interesting fact that has become apparent in the last 12 months.

Cryptos have increasingly transformed from relatively uncorrelated assets providing diversification during market turbulence, into what is effectively a high beta stock. The increasing BTC correlation with high growth tech stocks means that not only do traders need to take Bitcoin fundamentals and technicals into account, but also the fundamentals/technicals of the high growth tech sector as well, the chart below shows this BTC correlation with the FAANG basket (Facebook, Amazon, Apple, Netflix and Google) Source: Tradingview One of the main reasons for this correlation is the increase in institutional adoption of cryptos, the same institutions that are now facing margin calls on their tech holdings, are also dumping cryptos to provide much needed liquidity. Antoni Trenchev,, co-founder of Nexo, cites Bitcoin’s correlation to the tech-heavy Nasdaq 100, which right now is near the highest in a decade. “Bitcoin is being battered by a wave of risk-off sentiment.

For further cues, keep an eye on traditional markets,” he said. “Fear and unease among investors is palpable.” The evidence is growing that Bitcoin and altcoins should be classed as risk assets rather than safe havens. Along with fears of central bank tightening and an increasing liquidation of correlated risk assets, crypto also has had to deal with a relentlessly pessimistic news cycle. Recently regulators from Spain, the U.K., Russia and Singapore all announced regulations and interventions that could undermine crypto uptake and growth in those regions.

Out of the US as well, cryptos are under scrutiny with federal agencies tasked with assessing the risks and opportunities that cryptos pose in a report due as early as February. It's not all doom and gloom with cryptos though, crypto bulls and many analysts point out that on all previous occasions of crypto carnage, they eventually rebounded to new all time highs. “At some point, sellers will become exhausted and the market could see some capitulation soon”, said Matt Maley, chief market strategist for Miller Tabak + Co. “When that happens, the institutions will come back in in a meaningful way,” he said. “ Once the asset class becomes more washed-out, they’ll have a lot more confidence to come back in and buy them. They know that cryptos are not going away, so they’ll have to move back into them before long.” Ironically, the real support could come from the Federal reserve as they realise that hawkish tone they have set may be to much for an economy that is slowing and could pivot to the dovish side in this week's FOMC meeting, a pivot which would be expected to send risk assets sharply higher, cryptos with it. “If we see a bigger selloff in equities, expect the Fed to verbally intervene to calm nerves and that’s when Bitcoin and other cryptos will bounce.” Said Nexo's Trenchev.

This effect could be seen in Mondays (24/01) huge turn around in equities and Bitcoin, bitcoin soared $3000 from its low to finish positive for the session, this was on the back of rate hike expectations dropping dramatically during the day as the market started to price in a backed into a corner Fed striking a more dovish tone than previously expected in Thursdays FOMC meeting as the below chart shows. Source: Tradingview Thursday's Fed meeting will be pivotal for the near term direction of Bitcoin and Cryptos in general, and any serious crypto trader should be tuning in. 2022 will be an exciting year for cryptos, with strong forces on both sides of the bull / bear argument. The bears have a seemingly endless negative news cycle, with regulatory and market risk weighing heavily on crypto prices.

The bulls have the Fed, a Fed that has shown in the past that the faster markets crash, the faster they panic and move to stabilise the stock market, this will also benefit other risk assets, Bitcoin and other cryptos among them. Whichever side a trader picks, they will have to be nimble and be across the fundamentals and technicals of the broader market, not just the crypto chart they are looking at.

Overview Qantas is Australia’s national carrier and the largest and oldest airline in the country. With the Qantas group comprising of Jetstar, Qantas, QantasLink, its frequent flyer service and a freight service, the airline is the sector leader domestically and a global competitor in the international aviation industry. It is also the third oldest airline still operating and has seen many evolutions over the years to be the giant that it is today.

With recent threats of inflation, recessions, and the pandemic, the airline has been dealt some challenging blows but has managed to work its way through due to some astute leadership by its Board and its CEO, Allan Joyce. Recent Events Short Term Troubles In the short term the airline has struggled to service its flights and ground crew. With Covid 19 and the flu still rampant the company has had to deal with cancelations and a reduction in its workforce as it has faced difficult logistical challenges.

In June 2022, 8.1% of Qantas flights were cancelled according to the Australian, Bureau of Infrastructure and Transport Research Economics. The company also lead the sector for delays in domestic flights. As a premium airline and the national carrier, the effect on the company’s reputation and goodwill, may prove to be costly.

Furthermore, building a long-term reputation of being unreliable may lead to a lowering of its market share as customer look to others. Bid for FIFO competitor hits a roadblock Qantas has a bid in place to acquire the airline that services much of the FIFO industry. Qantas had proposed a bid of $4.75 per share to buy the remaining 80% of the company of which it already own a 20% stake.

If the takeover were able to pass though regulatory approval it would provide the airline with a dominant share of the resources and industry. However, regulators at the ACCC expressed its concerns about the merger with the body outlining that the transaction may substantially weaken competition. Upcoming annual report The company is expected to release its annual report that will give further details on the company’s financial performance for the previous financial year.

The company is expecting to achieve EBITDA of between $450 million to 550 million dollars for the second half of the financial year. The impact of the oil crisis and the delta variant may heavily on the results. In addition, assuming operations can return to some normality in the next year, it is possible that the company will be able to return to profitability next year.

Strategy Long term strategy Qantas is transitioning its domestic, freight and international fleet to Airbus aircraft with longer ranges and an increased capacity over the currently used Boeing 737s. The shift towards Airbus’s called ‘Project Winton’ will improve fuel efficiency, range, and flexibility. The change may elevate Qantas’s ability to improve its bottom line as it allows for higher capacity and further range.

The flexibility of the aircraft enables Qantas’s fleet to remain more dynamic and for the company to meet the needs of both the international and domestic schedules. Specifically, the project will improve units’ costs vs the current fleet set up. Project Sunrise Qantas aims to be the first airline to connect the East Coast of Australia to key cities in Europe and the USA with direct flights.

Specifically, Sydney and Melbourne will be able to reach London, Paris, NYC, and Chicago with just one flight. Beginning in 2025 the program will utilise modified Airbus A350’s to make the journey. This strategy may provide the airline with an important point of difference as the first airline to partake in this route strategy.

The ‘project’ has two potential major advantages. Firstly, it allows for a reduction in costs. By removing layovers, the airline can save on costs associated to the airport and refueling and staff constraints.

Secondly, it allows Qantas to develop more route paths into Europe without the need to rely on code sharing agreements. Forecasting future cash flows and revenues The company is expected to return to profitability next year as it comes out the other side of the pandemic. The model used has predicted a revenue growth rate inline with the previous years of profitability.

Furthermore, considering the project sunrise the projecting is that the company can return to the revenue levels of 2017 – 2019 by the year 2024/2025. Whilst a conservative approach has been used, it is not unreasonable to have revenue get to this level earlier. The forecast revenues below are for the next 5/6 years.

In addition, it is assumed that during the year 2025 the company may see increased costs as it looks to establish its Project Sunrise and it goes through retraining of staff, crew, and maintenance staff. It is possible that in those initial years, Net profit may decrease due to this implementation. Forecast Revenue, in Million $ 2021 2022 2023 2024 2025 2026 2027 5,930 8,685 11,000 14,000 17,000 17,792 18,621 Last financial year, the airline was able to improve its Net Profit margin by from 5% to 14% by heavily reducing its capital expenditure.

The pandemic caused the company to reduce its maintenance and purchasing costs. As of the last annual report Qantas was in a strong short- term position with a current ratio of 1.5. with the new report imminent, the ability meets its short-term liabilities, specifically relating to the price of fuel will be an important metric to analyse. With a Debt/Asset ratio of 0.33 the company has a solid balance sheet and is not at an overleveraged position.

After assessing all the opportunities and risks and understanding a price target of $5.50 in the next 12 months is not an unreasonable target, with a return to profitability and the airline hopefully seeing the end of Covid 19 restrictions. Threats Inflation With record high levels of inflation, the cost of inputs across the supply chain for Qantas. With the increases in costs of most inputs the airline will have to be careful in its pricing to ensure it can survive the increase in costs.

With the increase in fuel being an obvious problem, other input costs will also negatively affect the airline. In Australia, inflation is currently hovering around 6%. However, with the airline being multinational, and operating globally it is exposed to the inflation risk of the country it operates in.

Recession With much of the work expecting a recession, the pressure on the travel industry may increase again. Whilst it may be a soft landing for Australia’s economy, exposure to the world markets places Qantas at a level of risk. Demand for travel may be reduced.

Coming out of the pandemic, this is something that Qantas may find tough to deal with. With the company already implementing various strategies to reduce costs, the question remains, how can costs be cut further. Oil Prices As inflation reared its ugly head across the much of the developed world, Qantas has suffered at the hands of peaking oil prices.

With the price of Crude oil peaking at over $130 US a barrel during the height of the Ukraine and Russian war the cost was passed on to the airline industry. In response to the increases in prices the company had to increase the price of air fares proportionally to offset the price. In addition, 90% of the fuel costs for Qantas were hedged through till June meaning they were likely spared the worst of the spike in fuel price.

The figures from the annual report will provide some guidance to how well the company was able to manage the supply shock. Pandemic The pandemic has seen lots of blood appear, especially in the travel industry. Whilst the worst of the pandemic seems to be over, the potential for a resurgence or another major outbreak of a virus is still very much real, and the travel industry has not forgotten.

Ultimately, the Airline remains in a strong financial position. However, it has shown that it is prone to unsystematic risks that have the potential to throw the company into chaos.