After two months of new market highs and record-setting stock gains by many of the largest tech stocks, heavy selling finally occurred before the long Labor Day weekend. The financial media over the past few weeks had focused on the apparent disconnect between the economy and the stock market. This debate became more pronounced last week.
The weekly performance table does not illustrate the severity of the market’s decline late in the week, as most of the averages closed well above the week’s lows. The Nasdaq 100 led the decline, closing down 3.1% for the week. However, this close was 4.3% above the week’s low at 11,145, which came early Friday. The high for the week at 12,439 was well above the weekly starc+ band.
The declines last week in both the S&P 500 and IWM were also muted by Friday’s rebound as they were down 2.3% and 2.8% respectively. Even the SPDR Gold Shares (GLD) lost 1.5% for the week, while only the Dow Jones Utility Average managed to close up 0.4% for the week.
Last Friday’s news from the Financial Times about the investment action of Japan’s Softbank provided a new explanation for the disconnect between the large tech stocks and the economy. SoftBank purchased nearly $4 billion in shares of Amazon, Microsoft, and Netflix, as well as a stake in Tesla. It was also disclosed that SoftBank spent around the same amount buying call options related to its stock holdings.
As the stocks like Amazon, Apple, Facebook, and Microsoft soared, those that sold Softbank options were forced to buy stock in the companies to hedge their positions. These more speculative positions by Softbank’s Vision Fund caught many by surprise as it was previously known primarily for investments in privately held tech companies.
CNBC asked long-time tech investor Roger McNamee about the Softbank disclosure last week. “If it’s true that SoftBank is doing that, it would be more signs that the fundamental picture here is decoupled from stock prices,” he said.
As traders wait for the stock market to open on Tuesday, there is no way to determine what amount of selling by Softbank contributed to the decline late in the week. The daily chart of Apple, Inc. shows that after last Wednesday’s high of $137.98, it had a low Friday of $110.89 before closing at $120.96.
The uptrend in prices based on the March and July lows is now at $101.61, which is just above the monthly S2 support level, based on a monthly pivot analysis. The daily relative performance (RS) was surging to the upside by early August, signaling that AAPL was going to outperform the S&P 500. It closed the week below its weighted moving average (WMA) on Friday after making a new high during the week. The RS is well above support from its uptrend (line b).
AAPL’s daily on balance volume (OBV) looks even stronger, as it tested its rising WMA on Thursday and then turned upward. It has longer term support going back to May (line c) and the weekly OBV (not shown) looks even stronger. The total option volume Friday for AAPL was 3.54 times greater than the 90-day average, with 63% of the volume in call options. Of course, this data does not shed any light on what any particular investment firm did last week.
The weekly chart of the Invesco QQQ Trust (QQQ) shows last week’s wide range and the lower close. The low last week of $271.80 was back into the ranges from the first half of August. The 20-week exponential moving average (EMA) is rising strongly at $253.90. The weekly Nasdaq 100 Advance/Decline line has turned down after making a new high a week ago and is still well above its WMA.
The daily chart of the QQQ shows that short-term support (line a) was tested on Friday, with initial resistance now in the $288-$292 area. A move back above $294 will suggest that last week’s correction could be over. The daily Nasdaq 100 A/D line has dropped back to its WMA. The A/D line has more important support (line c), which if broken will indicate a further decline.
Only two of the eleven sectors ETFs, the Materials Sector (XLB) and the Utilities Sector (XLU), were able to close the week higher. Both the Energy Sector (XLE) and Technology Sector (XLK) were down over 4% for the week. Health Care Sector (XLV) was surprisingly weak, losing 2.1%.
The sharp decline in the stock market early Friday was in spite of a stronger-than-expected jobs report, as the unemployment rate dropped to 8.4%, well below the median forecast of 9.4%. Some economists are hoping to see over 1 million new jobs created in next month’s report, to indicate that the recovery is now on a stronger footing. We’ll see if their hopes bear out on October 2.
New data on inflation will be released this week, with the Producer Price Index (PPI) on Thursday and the Consumer Price Index (CPI) on Friday. Investors will continue to watch the data on new unemployment claims, which also comes out on Thursday.
Even though there are no signs currently of a deeper correction, I think one is still likely in the next month or so. A drop to stronger long term support in the S&P 500 (around 3200-3250) should be signaled in advance by the daily A/D lines breaking important support while starting new downtrends. For now, I would continue to be cautious about new long positions and continue to focus on the risk of new positions. I do not think now is the time to be fully invested.
In my Viper ETF Report and the Viper Hot Stocks Report, I update subscribers with my A/D analysis twice per week, along with specific buy and sell advice. Each report is just $34.95 per month. New subscribers also receive six free trading lessons, a $45 value.
Event Store Secures Series A Investment English English – PRNewswire
BATH, England, Sept. 29, 2020 /PRNewswire/ — Event Store today announces it has secured Series A financing from strategic investor Qualasept Holdings (‘QH’).
Event Store is the company behind EventStoreDB, the popular open source event stream database. EventStoreDB was open sourced in 2012 and has relatively quietly built a strong commercial business. In late 2018, Event Store Limited was formed and an expanded leadership, engineering, and support team were introduced. The Series A investment represents Event Store’s next stage of growth towards EventStoreDB’s adoption in the broader database market.
EventStoreDB is an operational “source of record” database technology. It has similarities to event-oriented integration technologies, such as Apache Kafka, from a stream and API perspective. However, it was built for database workloads from the start. Dave Remy, Event Store CEO, explains, “Most mainstream database technologies, whether relational, graph, or document-oriented, keep the latest state of the data, throwing away the old data when it changes. In contrast, EventStoreDB, the leader in the emerging class of databases, called Event Stores, is specifically designed to keep the changes along with the business context of those changes, in the form of events. Current state can then be derived from replaying the event stream. This pattern enables a myriad of benefits, including powerful audit, debugging, caching, occasionally connected scenarios, and much more.”
Event Stores are foundational to the increasingly popular Event Sourcing design pattern.
EventStoreDB is applicable across industries and is particularly valuable for those with challenging audit requirements, such as financial services and healthcare. Innovative companies like Walmart, Xero, Insureon, Linedata, Made.com, UK National Health Service, Swiss Air Traffic Control and many more use EventStoreDB in mission-critical production environments.
Building on its momentum, the company is launching Event Store Cloud, a multi-cloud database as a service (DBaaS). The subscription service, currently in Preview, will provide cloud convenience and make EventStoreDB more accessible to developers and companies of all sizes.
“As applications increasingly move toward event-driven architectures, foundational platforms like EventStoreDB will be a critical first source of truth in capturing and enabling analysis of event data. This technology will generate meaningful and measurable value across multiple industries,” said Ben Kolada, Director, Head of DataTech at ICON Corporate Finance.
“From the time Greg Young and his team released EventStoreDB in 2012, it has been the go-to database for CQRS and Event Sourcing projects. This Series A investment represents a new stage for Event Store and EventStoreDB. We will accelerate the development of Event Store Cloud, improve the developer experience, increase scalability, and build new products and services to help developers build systems within an event-driven architecture,” Dave Remy said.
Tech investment bank ICON Corporate Finance advised Event Store on the transaction and corporate structuring, while QH was advised by BDO, Roxburgh Milkins Limited, and Alantra.
Email: [email protected]
SOURCE Event Store Limited
View Marketing as an Investment—Not an Expense – Advanced Manufacturing
Trends and Ideas in Strategic Marketing
Peter Drucker, known as the father of modern management, was quoted in a 2006 article in Forbes as saying, “Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Although today’s business owners are often inclined to see marketing as an expense, Drucker’s view is more accurate. Marketing is a needed investment. Marketing drives results by finding new customers.
Time to Build a Moat
When organizations treat marketing as a cost, they often focus on short-term sales and ignore the long term. However, if you want your company to continue growing, your goal should be to build as much of a moat around your business as you can. This is achieved by expanding your investment of marketing dollars into your company’s owned assets. Such investments may include; updating your message and website every year, producing customer video testimonials for use as sales tools, developing a series of educational webinars, and developing content that can be used both for thought leadership and for search engine optimization (SEO). Although these efforts may not produce short-term returns, they will aid in strengthening your manufacturing business over time.
The problem is that if you only look for marketing initiatives that guarantee an immediate ROI—consistent with a view of marketing as an expense—you will never plant any of these long-term marketing seeds needed to build the moat that is necessary to create a sustainable competitive advantage.
Examining my own life as a business owner, I have “walked the walk” while growing TribalVision. The reason TribalVision has achieved success is that, from day one, I’ve understood the importance of marketing to unlock dramatic growth. Before even opening the doors for business, and with little money to spare, I wrote a book, spent months crafting TribalVision’s message, built a website that made TribalVision look like an established company, developed an animated video to explain the “why” behind TribalVision, wrote multiple white papers, developed numerous marketing presentations, and crafted a 30-page marketing plan to identify and capture new business.
If I had viewed marketing as an expense rather than an investment, I never would have done any of these activities. I simply would have started TribalVision with a business card, an average 10-page website and not much else, which is what most startups with little money do. Looking back 10 years later, although I cannot attribute a specific ROI to each of those assets, I know those investments as a whole provided a much larger payoff than I would have earned by focusing only on short-term ROI initiatives.
Take a Leap of Faith
If we are to build something great, we must take a leap of faith—a calculated leap of faith but a leap of faith nonetheless.
If Howard Schultz, Steve Jobs, Richard Branson, or Elon Musk invested only in efforts backed by guaranteed results, they never would have built their empires.
Bank-backed growth fund makes first Quebec investment in bus booking website – Financial Post
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“We’re really, really confident that we will be able to weather the storm,” Maurice said.
The Series C for Busbud also comes as the coronavirus pandemic continues to put financial pressure on firms and make for an uncertain global investing environment. That environment is making it harder than normal for small and medium-sized companies to grow into bigger firms, which was a pre-existing issue in Canada.
The CBGF was launched in 2018, following work done by the federal government’s Advisory Council on Economic Growth, which found many Canadian companies weren’t growing after they reached a certain point. And Rossolatos says that, at the moment, some investors have had to focus on their existing portfolio or hold off on additional deals.
“However, the growth capital gap in Canada has become much larger as a result of the pandemic,” he said. “At CBGF, we have chosen to ‘lean in’ to support entrepreneurs where we could.”
The Toronto-based CBGF, which is backed by 13 of Canada’s biggest financial institutions, started out with capital commitments of $545 million from shareholders such as Royal Bank of Canada and Manulife Financial Corp. The fund typically shoots for investments of between $3 million to $20 million in established Canadian companies, taking minority ownership stakes in them in return.
CBGF has now invested $137.8 million in 15 companies, including seven investments made during the pandemic, Rossolatos said.
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