Investments
Wall Street's rally in the first 7 months of the year led to a series of sharp declines in August and September. With the Fed warning of another 25 basis point rate hike later this year and a longer period of rate hikes, market players are getting very nervous. The first interest rate cut is not expected until September 2024, and inflation is unlikely to fall to the central bank's 2% target until 2026.
Higher market interest rates are hurting high-growth sectors such as technology, consumer loans and cryptocurrencies. As a result, the cryptocurrency world will likely face uncertainty in October. The prices of major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Dogecoin (DOGE) and BNB (BNB) will continue to fluctuate.
Anxiety in the short term
The yield on short-term two-year US Treasuries reached 5.461%, its highest level since 2006, following Fed Chairman Jerome Powell's speech in September. Investors are concerned that rising US Treasury yields are signaling a recession in the near future.
On September 27, crude oil prices rose to their highest levels ever. Brent crude, the global benchmark, rose $0.16 to $96.71. The Western Texas Intermediate rate in the US increased by $0.2 to $93.88. Investors are particularly concerned about oil prices, which will increase transportation costs and ultimately raise overall price levels.
Despite a steady decline since June 2022, inflation remains well above the Fed's 2% target. High crude oil prices will further exacerbate the Fed's problems. Additionally, the US Dollar Index (DXY), which measures the currency against six other baskets, rose 0.4% to 106.71 on September 26, its highest intraday level since November 30, 2022:
The Conference Board said its consumer confidence index rose to 103 in September from 108.7 in August. September was the index's second straight month of decline and the index's biggest monthly decline since December 2020.
The index of consumer expectations, based on estimates of short-term earnings, business conditions and the labor market, fell to 73.7 in September from 83.3 in August and 88 in July. Note that any Expectations Index reading below 80 historically indicates decline next year.
Stocks in the spotlight
NVIDIA NVDA is a giant in the semiconductor industry and one of the biggest success stories of 2023. Shares of NVDA, a leading developer of graphics processing units (GPUs), typically rise in the cryptocurrency market. This is because GPUs play an important role in the creation of data centers, artificial intelligence, and crypto assets.
NVIDIA's expected revenue growth this year (end-January 2024) exceeds 100%. The Zacks Consensus Estimate for current-year earnings has moved 2% higher over the past 30 days. NVDA currently has a Zacks Rank #1 (Strong Buy).
Robinhood Markets Inc. ( HOOD ) operates a financial services platform in the United States. The platform allows users to invest in stocks, mutual funds, options, gold and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using the Robinhood Crypto platform.
Robinhood Markets is expected to post revenue growth of 57.3% for the year. The Zacks Consensus Estimate for current-year earnings has risen 18% over the past 60 days. HOOD currently has a Zacks Rank #2 (Buy).
Interactive Brokerage Group Inc. IBKR is a global automated electronic broker. IBKR implements, develops and trades cryptocurrencies. IBKR's Commodity Futures Trading desk also allows clients to trade cryptocurrency futures.
Interactive Brokers Group's revenue growth for the year is expected to be 38.8%. The Zacks Consensus Estimate for current-year earnings has moved 0.7% higher over the past 60 days. IBKR currently has a Zacks Rank #2.
Coinbase Global Inc. COIN provides the financial and technological infrastructure for the cryptoeconomy in the US and abroad. COIN provides consumers with primary financial accounts in the crypto space, a marketplace for institutions with liquidity pools for trading crypto assets; and technologies and services that enable developers to build cryptocurrency-based applications and securely accept crypto assets as payment.
Coinbase Global is expected to record 84.8% year-over-year revenue growth. The Zacks Consensus Estimate for current-year earnings has risen 30% over the past 60 days. COIN is currently sporting a Zacks Rank of #3 (Hold).
Block Inc. SQ is an online digital and mobile payments platform for consumers and merchants and the parent company of Square and Cash App. Cash App users can buy, sell, send and receive Bitcoin. In addition, the decentralized SQ platform (TBD) allows developers to build decentralized financial applications to run on programmable blockchains. SQ is also one of the largest investors in Bitcoin.
Block forecasts profit growth this year by 69%. The Zacks Consensus Estimate for current-year earnings has moved 0.6% higher over the past 30 days. SQ currently has a Zacks Rank #3.
Interactive Brokerage Group, Inc. (IBKR). Free Stock Analysis Report
NVIDIA Enterprise (NVDA). Free Stock Analysis Report
Block, Inc. (rectangle). Free Stock Analysis Report
Coinbase Global, Inc. (COIN). Free Stock Analysis Report
Robinhood Markets, Inc. (CONNECTS). Free Stock Analysis Report
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