Ethereum Surges In Crypto Bull Run, OPEC+ Sticks With Gradual Oil Output Increase

Cardano and Solana were some of the big crypto winners of August. Cardano jumped from $1.381 at the start of the month to end August at $2.752. Solana started August at $36.759 and ended August at $108.29. Over the past week or so, Ethereum has gotten in on the action and started to breakout as well. On August 30, 2021 ETH closed at $3224.37 and reached as high as $3,836.87 on Wednesday. That’s a move of almost 19% in less than 48 hours.

What is driving the price of ETH and other Cryptos? Some factors include the move to DeFi apps, the NFT market getting hot again and for ETH specifically, the London Hard Fork. Since the London Hard Fork over 165,000 ETH coins have been burned.

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OPEC+ Sticks To Gradual Oil Output Increase

On Wednesday, OPEC+ came out and reaffirmed a previous decision to only increase production by the previous agreed amount of 400,000 barrels a day. Last month, US National Security Advisor Jake Sullivan requested that OPEC+ increase their production by more than the previously announced 400,000 barrels a day. Based on the decision by OPEC+ on Wednesday, production will not increase by more than previously announced 400,000 barrels a day. Demand is expected to surge in 2022 as the world recovers from COVID-19 and many industry analysts are concerned there could be short term price spikes in crude unless production is increased immediately. Hurricane Ida complicated the short term US production outlook, as around 2 million barrels a day of refining capacity was offline due to the storm and 95% of crude output in the Gulf was shut in due to the storm.  

Bond King Trashes Intermediate to Long Term Bond Funds

The now retired Bond King and PIMCO Co-founder Bill Gross has come out to trash bonds. In an outlook posted on his personal website, he stated, “Intermediate to long-term bond funds are in that trash receptacle for sure, but will stocks follow? Earnings growth had better be double-digit-plus or else they could join the garbage truck.” On his website Mr. Gross went on to state that there will be 2% 10 year treasuries within 12 months and that the Fed’s bond buying “will probably end sometime in mid-2022 given inflation at greater than 2% and economic growth prospects remaining optimistic.” Everyone was looking for rising rates in 2021 and so far it seems that rates have actually gone down.  

Zoom ($ZM) Earnings Highlights

On Tuesday, shares of Zoom Video Communications ($ZM) were down about 17% after the company reported second quarter earnings that were slightly above analysts estimates. Revenue for the fiscal year is now estimated to be $4.01 billion by the company vs. expectations of analysts of $4.08 billion. The concerning news from the conference call was sales guidance. Zoom gave sales guidance that is less than what many analysts expected. There are questions around whether the company will be able to maintain the revenue growth that it experienced in the pandemic.

Cathie Wood apparently was not concerned about the quarterly report, as her ARK Investment Management bought almost 200,000 shares on Wednesday as the stock was trading down. On Wednesday, ARKK (ARK Innovation ETF) bought 157,233 Zoom shares and ARKW (ARK Next Generation Internet ETF) bought 36,847 shares.

AMC Downgraded to ‘Underperform’ By Macquarie

Shares of AMC were down over 7% on Wednesday after Macquarie downgraded the stock to Underperform from Neutral with a $6 price target. Macquarie lowered domestic box office estimates for the second half of 2021, 2022 and 2023. Macquarie’s analyst Chad Beyond stated, “Looking forward, fundamentals are nowhere near where shares are trading given the company carries deferred rent of $420 million (2Q21) in addition to its annual rent expense of $1 billion; normalized maintenance capex is ~$140 million, and annual interest is ~$420 million. Overall, we do not see the company generating positive free cash flow until 2023 and believe there are other ways to own the theatre space.”

About the Writer

My name is Allen Spence and I have been working in the retail brokerage industry for over 16 years. I joined Alpaca in March of 2021 as a Brokerage Operations Consultant. Before joining Alpaca I have worked in a retail branch environment, call center for active traders, and spent over seven and a half years as the team lead on an equity trading desk for a large regional broker dealer. I’m excited to be at Alpaca helping bring the markets to investors worldwide. I live in Florida and enjoy traveling and spending time with my family.

About Alpaca

Alpaca is a globally distributed financial technology company that is democratizing global access to financial markets starting with our API-first stock brokerage. Alpaca offers commission-free stock trading via API, a suite of developer APIs for brokerages, advisors, and startups, as well as a market data API.This article is solely for informational purposes only.. Investments in securities involve the risk of losses and past performance does not guarantee future results. Before investing you should carefully consider your investment objectives, time horizon, and overall risk tolerance as well as the information stated in the product offering prospectuses.

Cryptocurrency is highly speculative in nature, involves a high degree of risks, such as volatile market price swings, market manipulation, flash crashes, and cybersecurity risks. Cryptocurrency is not regulated or is lightly regulated in most countries. Cryptocurrency trading can lead to large, immediate and permanent loss of financial value. You should have appropriate knowledge and experience before engaging in cryptocurrency trading.