Let The Interest Rate Hikes Begin
Sweden kicked off a pivotal week of central bank decisions with a surprisingly large interest rate hike, setting the tone for imminent announcements from the Federal Reserve, the Bank of England, the Bank of Japan, the Swiss National Bank and Norways Norges Bank.
This just in: The Riksbank on Tuesday raised rates by a full percentage point to 1.75%, part of a bid to slow price increases. Inflation in the country climbed to 9% in August.
Inflation is too high. It is undermining households purchasing power and making it more difficult for both companies and households to plan their finances, the central bank said in a statement. Monetary policy now needs to be tightened further to bring inflation back to the target.
Why it matters: The European Central Bank, a peer of the Riksbank, increased rates by three-quarters of a percentage point earlier this month. Since then, however, concerns that inflation remains stubbornly high have been working their way through financial markets.
Investors see an 80% probability that the Fed will hike interest rates by three-quarters of a percentage point on Wednesday. But after data showed last week that inflation rose more than expected in August, theyre leaving some room for a full-point move.
Donald Trumps New Media Venture Sees Its Stock Price Soar
Is it GameStop all over again? Or will the former presidents political supporters keep backing the stock?
Shares of Donald Trumps new conservative media venture rocketed higher this week, mostly fueled by Reddit-online daytraders, but some well-known hedge funds turned out to be early investors as well.
Trump Media & Technology Group merged with a shell company called Digital World Acquisition Corp. as a way to go public. The transaction this past week valued Trumps group at an initial $875 million. By Friday, the companys public valuation had shot up to $1.64 billion.
The stock, which began trading Oct. 19 at just over $9.95 a share, closed Friday at $94.20, more than nine times its initial price. Including warrants — or securities that can convert into stock — Trumps shares rose over $108.
Reddit day-traders embraced the former presidents new social media venture, many saying they bought the stock as an extension of their political support. Trump Media promised to end censorship by mainstream news, and create an on-demand streaming service with non-woke entertainment.
Trump also said his company will compete with Big Tech platforms such as , Instagram, and
YOU ARE SITTING ON A GOLD MINE!!!!, wrote one poster on Reddits website devoted to the stock. Im not selling! Twitter banned the president and allowed the Taliban to have an account! This is more than just a stock! This is about your digital freedoms! Were just getting started!!!
Analysis: From Zero To $12 Bln Investors Chase Trump Stock Hype
Former U.S. President Donald Trump looks on during his first post-presidency campaign rally at the Lorain County Fairgrounds in Wellington, Ohio, U.S., June 26, 2021. REUTERS/Shannon Stapleton
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Anthony Nguyen, a 49-year-old software consultant from Austin, Texas, is a Republican who refused to vote for the former U.S. president in last year’s election.
Last week he joined the millions of online day traders who drove up the value of the company that will house Trump’s new social media venture to almost $12 billion. The company’s app has yet to be rolled out even on a trial basis, and Nguyen said he invested because he wanted to make a quick profit, not because he believed in the business.
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“Is Trump’s social network going to work out? Probably not. But that doesn’t mean you can’t make money in the meantime,” Nguyen said.
Shares of Digital World Acquisition Corp have risen 842% since the blank-check acquisition company announced on Wednesday it would merge with Trump Media & Technology Group, which aims to launch a social media network called TRUTH Social.
“Trump has a strong history of making people a lot of money and winning. If this was an election I would have lost, but it’s not, it’s business,” Springer said.
“People like to jump on things and if you are nimble enough you get in, double your money and get out,” Nguyen said.
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What Was The Djia On October 31 2016
There was no change in the Dow Jones Industrial Average . There were 1681,161 shares outstanding at closing. There was no change in the S& P 500 index. We closed at 2,126, a 3% increase. Technology-laden Nasdaq composite index closed at 5,190 yesterday. The number 10 loss was 0. Five percentage points increase in CBOE volatility Index was reported on Thursday. After adjusting for inflation, we are at 16 percent.
Trump Stocks: Grom Social Enterprises
Grom, a social media platform for children under 13 and an original content provider of entertainment, listed on the Nasdaq in June. The internet is an exciting place for children to explore, but often they have no idea what territory lies beyond their screens. Thats why Zach Marks created Grom Social so that kids could find a safe space on social media where adults could help them learn more about how this new world works.
The sites founder got inspired to create the platform after his own experiences with social media at an early age. When Marks was only 11, he created a social media profile without notifying his parents. When his parents discovered that he had made the account they made him delete the account. It was at this point he thought about producing an online social network for kids like himself.
Grom operates through four different subsidiaries. However, Groms revenue comes from a Filipino animation studio Top Draw that produces 250 half hours of 2D animations each year. GromSocial is a social media network that operates for kids under 13. They can upload videos and post messages and watch TV shows in their account on the app. Looking ahead, this will become the bread and butter of the company.
Some might argue that since Grom Social is not directly connected to Trump, it cannot make it on a list of Trump stocks. However, alternative social media is one of the major investment themes emerging from the DWAC announcement. Hence, GROM will also do very well.
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So Um Why Would This Work
Well, remember meme stocks? Donald Trump had a whole meme presidency. Given the strength of his online fanbase and the general proliferation of we like the stock investing, it seems possible the plan is just to launch the company and have his true believers buy in. SPACs have been, at times, popular targets for the new class of casual retail traders. Its not hard to imagine many people buying stock in this company simply for the lulz.
Its already a meme stock, even if its not meant to be
In fact, this may already be working! At the time this story was published, shares of the DWAC SPAC are already approaching the record for number of shares traded in one day. That extreme volatility has only lifted the stock price to $25, though, meaning were not seeing the same kind of coordination that propped up the valuation of, say, GameStop.
But theres risk here, too. If those existing SPAC shareholders leave as they are kind of financially incentivized to do then regular people buying the stock could wind up owning shares of a company thats less valuable than promised. CNBC recently determined that 97 percent of SPACs that have not yet completed a merger are trading below their initial $10 share price.
Of course, if this deal doesnt work out, it wouldnt be the first time that Trump has left other people including his supporters holding the bag.
With reporting by Mitchell Clark
Update, 2:35PM ET: Added comment from The New York Times.
Stock Tied To Trump Media Venture Soars In Another Frenzy
NEW YORK The company planning to bring President Donald Trumps new media venture to the stock market soared further on Friday amid
Former president Donald Trump is using a special purpose This week, a company that doesnt do any business saw its stock soar as much as
Trump also owns stock in many well-known companies including Apple, Nike, Whole Foods, Google, Philip Morris, Raytheon, Facebook, and Morgan
In this article The blank-check company set to bring Donald Trumps media company public rallied along with other stocks tied to the former
Or will the former presidents political supporters keep backing the stock? Former President Donald Trump speaks during a rally in Perry,
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Why Are Spacs Popular
SPACs have drawn immense interest in the past year because they can save companies and investors time and money. They allow stakeholders to strike quickly, taking advantage, for example, of the dramatic upturn on Wall Street, where the S& P 500, a benchmark for the market, has nearly doubled since the initial shocks of the pandemic.
The broader investment frenzy unleashed by the coronavirus economy has also been a factor, as hedge funds, celebrities and retail investors scramble to find the next hot moneymaker amid so much volatility and uncertainty. Shaq was tapped as a strategic adviser to a SPAC eyeing acquisitions in the media and technology industries, and former U.S. House speaker Paul Ryan , took a chairman role at another SPAC just two notable examples.
Through the first six months of the year, 350 SPACs were registered with the Securities and Exchange Commission and have been priced, raising more than $100 billion, according to the data provider Dealogic.
But after a frenzy of activity, investor appetite appears to have cooled. SPAC IPOs dropped significantly in April, according to the findings, as the bulk of activity took place during the first three months of the year. Still, the splashy SPAC activity this year dwarfs historic levels: 248 SPACS were formed last year, and 59 in 2019.
But the SPAC deal appears to have given WeWork another life. On Friday, shares climbed 10.5 percent to close at $13.03.
The Real Sources Of Wealth
The former president’s businesses generally fall into five categories: hotels, golf courses , condos, residential and commercial real-estate rentals, and payments for the licensing of Trump’s name.
The New York Times articles unleashed a major new source of information, besides confirming that Donald Trump’s disclosed income numbers were actually revenue figures.
The numbers also show that companies owned by Trump were incredibly unprofitable for the period between 2000 and 2018. His real sources of income were a television show and some licensing deals.
Although certain enterprises such as Trump Tower have been profitable, Trump businesses overall lost $174.5 million from 2000â2018. During the same period of time, his net income from licensing and endorsement deals was $230 million, his net income from The Apprentice television show was $197.3 million, and his income from other investments in companies run by other people was $178.7 million.
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Spac Backing Trump Has Surged More Than 800% Thats
Former president Donald Trumps brand-new social media company is At one point in trading earlier on Friday, the stock topped $131.
The Dow Jones rallied as Microsoft snatched the market cap crown of Apple stock. The Donald Trump SPAC made a huge weekly loss. Amazon fell.
Nasdaq Gains As Growth Stocks Lead. The tech-heavy Nasdaq was the only major index in positive territory, and was benefiting from Teslas strong
Trump Has A New Company
Apparently! It was registered in Delaware in February but somehow went unnoticed until Wednesday night. Anyway, Trump has very big ambitions for TMTG, according to the truly ludicrous 22-page investor presentation that was published on its website.
Seriously, the must be seen to be believed.
TMTGs ambitions dont end with Truth Social, Trumps Twitter clone. Ultimately, TMTG aims to be a conglomerate with plans to in all seriousness operate a news network that competes with CNN, a streaming platform that competes with Disney+, and a technology services business that competes with Amazon Web Services.
Trump Media & amp Technology Group starts with a Twitter clone
So far, the only part of this that exists are bits of Truth Social, which appears to be a fork of decentralized social network Mastodon. The app already has issues. Some journalists have already on the app with usernames like donaldtrump and mikepence.
The promotional materials for Truth are full of fake messages from brands that didnt give TMTG permission to be used. In one image, a @ChevyTrucks account has posted messages about a 2022 model year Chevy Tahoe Chevy told The Verge that it was unaware of this project. There is no 2022 Chevy Tahoe EV, a General Motors spokesperson said in an email to The Verge.
I’ve approved some clunkers. Just not this one.
Panzer
The TMTG investor presentation has no details about money
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The Correct Answer: It Depends
Two competing mentalities are at war within the minds of many investors. One is based on our natural tendency to want to avoid losses. With the S& P 500 again near bear market territory, the thought of buying stocks could be scary. The other is driven by the knowledge that, historically, buying stocks after the market has fallen significantly has often led to handsome returns over the long run.
Should you buy stocks right now? The answer to the question isn’t as simple as going with the rational conclusion over the emotional one. In reality, the best answer is an old standby: It depends. But what should tip the balance in your decision about whether or not to buy stocks now?
Image source: Getty Images.
Havent There Been A Bunch Of Right
There have! Gettr and Parler were both founded in the wake of the Trump bans, with older networks like Rumble seeing significant growth too. All three benefit from a new sense among conservatives that moderation on Facebook, Twitter, and YouTube are biased against them. In theory, that should create a huge potential audience for conservative-friendly alternatives.
In practice, the idea has run into a lot of problems that are likely to repeat themselves in Trumps Truth project. The biggest challenge for any social network is scale: if theres no one posting, then theres nothing to read, which means fewer readers and less incentive to post. Outside splashy launches, most conservative-focused networks have struggled to maintain that scale particularly Parler, where user growth slowed to a trickle over the summer. Right-wing platforms also struggled to set basic policies around hate speech and violent threats, caught between free speech branding and a lingering resistance to the nihilist chaos of spaces like 4chan.
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How Can We Explain This
How did markets go from being worried about Trump to being bullish on him? Interviewed shortly after the election, the legendary investor Stanley Druckenmiller said to CNBC:
I’m very hopeful and optimistic on what it means. The fears of protectionism, while valid, are greatly oversized relative to the benefits to the other parts of the economy. This economy is so over-regulated and people are just drowning in red tape, that the removal of that, and I’m expecting serious tax reform, cuts to the corporate tax rate. So I’m quite, quite optimistic on the economy.
Stanley Druckenmiller
Anxious Investors Are Piling Into Hedge Funds
A version of this story first appeared in CNN Business Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.
For years, the climate for hedge funds was tough. Volatility was low. The price of everything was going up. It wasnt that hard to make money. In that type of environment, why think outside the box?
But as central banks continue with their aggressive campaign of interest rate hikes aimed at bringing down inflation, sending markets on a roller coaster ride, alternative strategies are getting another look.
Certain hedge fund strategies can perform well in volatile and sideways-moving markets, an environment we expect to last into next year, Mark Haefele, chief investment officer at UBS Global Wealth Management, told clients on Tuesday.
On the heels of a summertime rally, markets have started to churn again. Concerns have ramped up ahead of the Federal Reserve meeting on Tuesday and Wednesday, at which the only debate will be over how much to hike rates.
The S& P 500 just logged its worst week since June. Government bonds are also experiencing a steep sell-off. The yield on the benchmark 10-year US Treasury, which moves opposite prices, reached its highest in more than a decade on Monday.
No matter what the Fed announces tomorrow, uncertainty is likely to linger, given the central banks emphasis that it intends to keep making decisions on a meeting-by-meeting basis.
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What Is A Spac
SPACs are essentially shell companies that allow groups of investors to raise money, list on a stock exchange, and then quickly take a private company public in a way that bypasses the rigorous process of a traditional IPO.
SPACs are also known as blank check” companies because they exist as pools of cash without an explicit investment target until they find their corporate soul mates.
Trump is pitching his new social network as a nascent rival to the Big Tech companies that will grant him unfettered space to deliver his thoughts and build an alternative to the liberal media consortium. In addition to building out a social network, Trump Media & Technology Group plans to have a subscription streaming service spanning news, entertainment and podcasts.
Digital World Acquisition Corp., the SPAC partnering with Trump, sees in the former president a massive following, and plans to expand the company to provide world class leading technology services with strong and secure social networks and diverse media offerings.
It already is posting staggering gains. Last week, before the Trump venture was announced, DWAC was trading around $10 a share. On Thursday, it shot up to $40. On Friday, it closed near $94, up 107 percent on the day.
The deal also could fit a familiar Trump business model: lending his name and reputation to other peoples businesses, generating revenue for himself with little work or overhead.
