Today is Friday, August 20, 2021
Coinbase Adds $500 Million in Cryptocurrency to Holdings
Cryptocurrency exchange platform Coinbase (Nasdaq: COIN) received approval from its board late Thursday to buy $500 million worth of cryptocurrency with a plan to allocate 10% of quarterly net income into more crypto in the future.
Fine Print: In a blog post, the company said it wanted to lead by example by becoming the first publicly-traded company to hold several crypto assets on its balance sheet. The investments will be allocated based on investment strategies from customers.
Stock Watch: In after-hours trading, the price of Coinbase’s stock when up by 1.5%.
Crypto Prices: Most major coins experienced an uptick in their prices on Thursday as well.
Bigger Picture: Coinbase has a $4 billion cash stockpile on hand in case of business risks, according to The Wall Street Journal.
Final Thoughts: Coinbase investing in crypto adds more legitimacy to the industry.
Notable Earnings Today: Deere & Company (NYSE: DE), Foot Locker (NYSE: FL).
Notable IPOs Today: n/a
Notable Equity Crowdfunding Campaigns Ending Today: Hercules Electric Vehicles (NetCapital), EnergyX (NetCapital), ACQ Bread (MainVest).
Notable Economic Events Today: n/a
Oil Prices Sink To 3-Month Low
The price of oil dropped to its lowest level yesterday since May, with investors scrambling for ways to figure out the market's next move.
Data: West Texas Intermediate crude oil, a major benchmark of oil, reached $64 a barrel. In the past month, Exxon Mobil Corporation (NYSE: XON) is down 5.77%, ConocoPhillips (NYSE: COP) is down 3.73%, and Occidental Petroleum Corporation (NYSE: OXY) is down 12.93%.
Breaking it down: Rising Covid-19 cases is hammering oil demand. Pressure from the Fed and the price of the U.S. dollar are also factors.
Why it Matters: In addition to the investment side, the price of oil is often tied to inflation and other economic conditions. Lower prices are good for oil buyers and bad for sellers.
Final Thoughts: Oil stocks may not look pretty, but many of them do have strong dividends.
Direct Indexing’s Questionable Future
Direct indexing, the ability to own a separate portfolio with portions of the assets of an index with the goal of getting the same return, is having a moment under the sun with investors.
While the present is good, what does the future hold for direct indexing?
Regulations: As financial companies democratize investing by making direct indexing available to all investors, it’s inevitable that the federal government could step in and try to regulate a part of the market if things got out of hand.
Next-Gen Tech: Part of the reason that direct indexing is being offered to investors is because of the technology that allows it to happen. But, is this the best technology for direct indexing, or is the next generation of technology going to be more of a difference-maker?
Truly Customizable: Currently, part of the direct indexing process is done manually by investors by inputting data about their overall investment strategy and other holdings. In the future, what if the algorithm could automatically customize a direct indexing portfolio based on the unique needs of that investor?
Final Thoughts: Depending on regulations and technology, the future could look bright for direct indexing, or there could be trouble.
Trends to Watch
I Like This A Bot: Elon Musk says Tesla will build a humanoid robot prototype by next year (CNBC)
Interesting Development: Wells Fargo Launches Passive Bitcoin Fund for Wealthy Clients (CoinDesk)
New Boss: Johnson & Johnson CEO to leave role in January (The Hill)
Welcome Back: Toys 'R' Us is back ... again (CNN)
Very Mighty: Just how mighty are active retail traders? (The Economist)
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