- The Street Sheet
- Posts
- 💸 The Fall and Rise of Fintech
💸 The Fall and Rise of Fintech
Plus, a frosty rivalry heats up.
Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.
🟩 | US stocks rose on Thursday. The market rebounded after positive U.S. economic data. The S&P 500 climbed 0.4% to a record high, the Nasdaq rose 0.6%, and the Dow gained 0.6%, led by a strong performance from Micron Technology.
📈 | One Notable Gainer: Southwest Airlines shares rose 5.4% after raising its Q3 revenue forecast, authorizing $2.5 billion in share buybacks, and announcing business model changes aimed at increasing profits and revenue.
📉 | One Notable Decliner: Sonos shares dropped 4.5% after Morgan Stanley downgraded the stock to underweight, citing concerns that the backlash from the May app redesign will impact the company’s revenue and profit.
💸 | Tomorrow's Trade: The Fall and Rise of Fintech. Scroll down for more.
Plus, old wells leak methane, but one company grows rapidly by plugging them. Click here to get your free report.
GO DEEPER
Get Access to Private Investments: Looking for access to private investment opportunities including direct real estate investments and venture capital investments? Click here to fill out this form.
Grow Your Business: Do you work in the financial services industry? Do you need help with email and content marketing to generate new leads, retain clients, and grow your bottom line? We work with companies ranging from J.P. Morgan to independent financial advisors to help them do exactly that. Click here to fill out this form and schedule a call.
TOGETHER WITH THE INVESTMENT JOURNAL
Old wells leak methane, but one company grows rapidly by plugging them.
S&P 500 Heatmap. Credit: Finviz
All Stock Heatmap. Credit: Finviz
Global ADR snapshot. Credit: Finviz
MARKET MOVERS
MU (+14.7%) Here’s what Micron’s strong quarter and outlook can tell us about 8 of our portfolio stocks (CNBC)
ACN (+5.6%) Accenture's AI business takes center stage in quarterly results beat (Reuters)
JBL (+11.7%) Circuit Board Maker Jabil Stock Soars on Strong Results, Buyback (Investopedia)
SMCI (-12.2%) US Justice Department probes Super Micro Computer, WSJ reports (Reuters)
KMX (+5%) Improved Retail Sales Lift CarMax's Results—and its Stock (Investopedia)
OVERHEARD ON THE STREET
QZ: A study found that Ozempic prescriptions for type 2 diabetes may lower opioid overdose rates, suggesting an additional health benefit.
CNBC: Etihad plans a $7 billion investment over five years to retrofit Boeing 777s, transforming the airline by 2026.
CNN: Wendy’s targets McDonald’s broken ice cream machines with $1 Frosty desserts, partnering with McBroken to draw value-seeking customers.
Reuters: AbbVie's drug tavapadon significantly improved early Parkinson's disease symptoms in a late-stage trial, outperforming placebo.
Bloomberg: Citigroup and Apollo have partnered to target $25 billion in private credit deals over five years, with Mubadala and Athene also involved.
TOMORROW’S TRADE IDEA, TODAY
The Fall and Rise of Fintech
Strong Technicals
Fintech stocks have underperformed in the last few years. But Wolfe Research’s Rob Ginsberg thinks a reversal could be on the horizon.
The Global X FinTech ETF (FINX), which aims to serve as a broad measure of the fintech sector, is closing in on $30 per share for the first time since 2022. According to Ginsberg, it is trading above both its 50- and 200-day moving averages.
Ginsberg stated that the fund is nearing a breakout — but it’s not yet “overbought”.
Thank the Fed
The reason behind this fall and potential rise is a familiar one.
The ETF dropped around 46% in 2021, starting right around when the Federal Reserve began its rate hike cycle. But the central bank’s hawkish policy seems to be at an end.
With one rate cut already on the books and more expected, the ETF has gained over 10% YTD and 37% over the past 12 months.
According to analysts, if the fund does indeed breakout, it could both validate the market rally post-rate cut and signal that the Fed’s decision is in fact boosting the overall economy.
Stock Picks
CNBC compiled a list of stocks held within FINX that match the following criteria:
Listed on either the NYSE or Nasdaq;
Covered by 8+ analysts;
At least 60% give it a buy rating; and,
The average price target suggests 10%+ upside.
Of those stocks, Riot Platforms (RIOT), PagSeguro Digital (PAGS), and StoneCo (STNE) have the most potential, per the analysis — with an eye-popping average upside of more than 85%.
Are you bullish or bearish on the fintech sector over the next 12 months? |
TOGETHER WITH THE INVESTMENT JOURNAL
Old wells leak methane, but one company grows rapidly by plugging them.
ON OUR RADAR
QZ: Vice President Kamala Harris announced a $100 billion plan to strengthen U.S. manufacturing and support the middle class as America's economic engine.
WSJ: The Swiss National Bank cut its key interest rate to 1% for the third consecutive meeting, shifting focus from inflation to currency strength concerns.
AP: OpenAI's CTO Mira Murati, along with two other top executives, is leaving the company to pursue personal exploration, as announced by CEO Sam Altman.
WSJ: U.S. regional airlines face their worst performance in 20 years, with passenger numbers and revenues down 27% and 33% over five years.
CNN: The USPS plans to raise First-Class stamp prices from 73 cents five times by 2027, starting with a hike in July 2025.
YESTERDAY’S POLL RESULTS
🟩🟩🟩🟩🟩🟩 🐂 Bullish
🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish
Reply