Airbnb ( NASDAQ:ABNB ) went public in Dec. 2020 at $68 per share. The short-term rental provider's stock opened at $146, hit an all-time high of $219.94 last February, then pulled back to the $160s over the past year. Airbnb clearly remains a battleground stock for the bears and the bulls. Let's review both arguments and see which thesis makes more sense. What the bears will say about Airbnb The bears generally don't like Airbnb for four reasons: the competition, the regulatory headwinds, its high valuation, and the pandemic-related threats. Airbnb enjoys an early-mover's advantage in the short-term rental market, but it faces a lot of competition from traditional hotels and online travel agencies (OTAs). In the hotel space, Accor ( FRA:ACR ) bought Airbnb's competitor One Fine Stay in 2016, Marriott ( NASDAQ:MAR ) partnered with the home rental platform Hostmaker in 2019, and other hotel chains are launching cheaper brands to compete against Airbnb. Image … [Read more...] about Airbnb Stock: Bear vs. Bull
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Share to Twitter Share to Linkedin Netflix NFLX traded to its all-time intraday high of $700.99 on November 17. Since then, the stock traded as low as $526.32 on January 10, down 24.9%. The media company missed earnings-per-share estimated in three of the last five quarters. Subscriber growth has been above expectations, but recent guidance was below estimates. Operating margin is shrinking as the company increases spending on added content. Netflix is attempting to offset this by adding gaming applications. Netflix has an elevated p/e ratio of 48.74% and does not offer a dividend, according to Macrotrends. The Daily Chart for Netflix The daily chart for Netflix shows a decline to $478.54 on May 19, 2021, followed by a rally to its all-time intraday high of $700.99 set on November 17. Then came the 24.9% decline to $526.32 set on January 10. The rally was fueled by a golden cross set on August18, 2021 when the 50-day simple moving average … [Read more...] about How To Trade Netflix From Bear Market Territory
Share to Twitter Share to Linkedin What a difference a month makes as in a year-end survey of market strategists from CNBC revealed that the median yearly target for the S&P 500 was 5100 with the most bullish targets at 5500. The lowest target was 4400 but on Friday the S&P 500 closed at 4397.9. So what has happened? Has there been an economic collapse, political scandal, war? Fortunately, none of the above but this month’s action in the stock market, especially last week, has caused many to question their outlook for the stock market in 2022. The weekly performance numbers tell the story as the losses were recorded in just four days of trading. The iShares Russell 2000 was the weakest down 8.1% as it was only slightly worse than the 7.5% decline in the growth dominated Nasdaq 100 Index. The prospect that the Nasdaq 100 could record its worst month since 2008 is unlikely to improve investor sentiment. The 5.7% loss in the S&P 500 was the … [Read more...] about What Happened To Last Years’ Stock Market Bulls?
Share to Twitter Share to Linkedin A very poor 2022 start for equities, off to their poorest start since 2011. Fixed income markets are faring no better with the 10-Year Treasury up 26 basis points since New Year’s Eve (1.77% vs. 1.515) (Bond prices fall when yields rise). In addition, the yield curve continues to flatten (short-term rates rising faster than long-term rates) signaling that markets see the strong possibility of recession. There are two driving forces; The equity markets have come to realize that economic growth is slowing and corporate profits may languish in the new year; The markets’ fixation on inflation has caused another Powell (Fed) “pivot,” this one to a very “hawkish” Fed tightening stance. ADVERTISEMENT Slowing corporate profits certainly figure in equity values, but the bigger issue here is the Fed’s intention to significantly remove liquidity, the Mother’s Milk of rising share prices. And, of course, the anticipation … [Read more...] about The ‘Stealth’ Bear Market; For Many It Has Arrived
Share to Twitter Share to Linkedin Another downer week, only worse. Thursday morning's secure-looking barriers gave way in the afternoon. Friday blipped up then continued Thursday's fall, failing to fill its role as opposite day. (Charts at the end of the article show the action.) The broad, strong declines signaled a move into bear territory, regardless of the percent-below-peak calculations. However, there is hope because one week's dramatic move doesn’t necessarily define a trend. ADVERTISEMENT A convergence of factors can occur in a week that makes everything look magical or horrible. But then comes the respite - a weekend of calm contemplation. By Monday's opening, investors will have determined whether the previous week’s drama was appropriate or overdone. Will "overdone" be the conclusion this time? It would make for a nice rise. For stockholders, a sign that this selloff may be an over-and-done adjustment. For cash holders, a sign that some … [Read more...] about The Stock Market Stepped Into Bear Territory Last Week – Temporary Visit? – Next Week Will Tell
Share to Twitter Share to Linkedin Topline As a weeklong sell-off that's pushed major indexes down into bear-market territory intensifies, investment banks are warning clients the worst may be yet to come, with some experts warning the S&P 500 could plunge as much as 11% more if corporate earnings continue to disappoint as the Federal Reserve begins raising interest rates. Key Facts Dragged down by a fifth-straight day of steep losses in the tech sector, the S&P 500 fell nearly 4% to 4,236 Monday morning, pushing the index down more than 10% for the year. A "disappointing" start to fourth-quarter earnings season could spell trouble for stocks this year, Goldman Sachs' David Kostin wrote in a Monday note, forecasting the S&P could plunge as much as 11% from Friday’s close (to 3,914) if higher interest rates and the reduction in Fed stimulus push annual corporate profits down 4% from 2021. Morgan Stanley's Michael Wilson struck a … [Read more...] about ‘Catastrophic’ Stock Market Crash Isn’t Over—Here’s How Much Worse It Could Get
The slide in stocks comes as cracks starting forming in the credit market, where traders had been sanguine about the prospects for companies to repay debt. - A + A (Jan 25): Stocks slumped amid wild swings and a flood of trading activity, with investors seeking safety in Treasuries as the specter of a Federal Reserve policy mistake and mounting geopolitical tensions roiled markets around the globe. The S&P 500 headed toward its worst day since October 2020, while remaining about 10% below its record set just three weeks ago. Volume was more than 80% above the average of the past month. The Cboe Volatility Index soared toward its highest in a year. The Nasdaq 100’s latest beating pushed it down nearly 15% from an all-time high, while the Russell 2000 of small caps approached a bear market after plunging almost 20% from its peak. Haven currencies outperformed on concern over potential Russian military action against Ukraine. Traders remain resolute in … [Read more...] about Stocks under pressure as traders seek bond shelter: markets wrap
Share to Twitter Share to Linkedin Most investors realize trying to time the market by always buying low and selling high isn't a realistic endeavor. Yet even with that knowledge, if you have a substantial amount of cash to invest, the thought of investing when the stock market is hovering near all-time highs may give you pause. Similarly, when facing the opportunity to 'buy the dip' ( remember March 2020 ?), few investors have the stomach to do so. As reasonable as these examples may sound, they both describe aspects of market timing. Despite the recent pullback in the U.S. stock market, the S&P 500 has already set 10 new record highs in 2021 and coming off two very strong years. So what should you do if you have cash to invest and the market is strong? Should I invest when the market is high? Sitting in cash just because the S&P 500 is setting new highs is a mistake on several levels. First, when investing, it's critical to make decisions based … [Read more...] about Should I Invest When The Market Is High? Dispelling The Buy Low, Sell High Myth
Share to Twitter Share to Linkedin When the stock market is in turmoil, many investors are tempted to go to cash and wait for the dust to settle before getting back in. One of the issues here is how to time your exit and entry—unlike a flash flood or significant weather event, investors aren’t going to get an emergency alert on their phone when it’s time to take cover, run for the hills, or once it’s safe to return. Aside from the fact that in the financial markets, we only know this information in hindsight, the notion of going to cash until the market recovers also ignores another very real but less visible danger: missing out on the recovery. Stick it out or sell to cash? By way of example, here are three long-term investors who started to invest in 2006. For simplicity, this example doesn’t include the impact of taxes, inflation, and rebalancing. Dividends and capital gains assumed to be reinvested. Kim Kim invested $100,000 in March 2006 in an … [Read more...] about Should You Go To Cash Until The Market Recovers Or Ride It Out?
- A + A (Jan 25): The strategists who saw this miserable stock rout coming say there’s still more pain ahead. With the S&P 500 sliding more than 10% from recent records, bears from the likes of Mizuho International Plc and Bank of America Corp. warn of fresh selling to come as growth momentum eases just as the Federal Reserve amps up borrowing costs. “There’s probably more downside over the next few months as the market adjusts to the reality of the Fed removing accommodation, earnings slowdown and much less federal stimulus,” said Ed Clissold, the chief U.S. strategist at Ned Davis Research, who late last year predicted a double-digit drop in stocks and today is warning of a correction on the order of 20% from the early January peak. The S&P 500 could slide another 12% as a “tightening tantrum” gathers pace, according to Mizuho strategists who came into 2022 warning of a 10% to 15% plunge in the second quarter, if not sooner. A slew of factors -- … [Read more...] about Strategists who predicted this market rout also see more selling