STRONG DEBUT
Ethereum spot exchange-traded funds (ETFs) have made a successful debut on their first trading day, attracting over $1 billion in traded volume. However, despite this significant trading activity, the price of Ethereum, the second-largest cryptocurrency by market capitalization, has remained relatively stable, currently standing below the $3,500 per coin with a slight decline of 0.8% over the past 24 hours. It is important to remark that although Ether’s value has not reacted significantly, these ETFs have generated substantial interest among investors, and while specific details regarding fund inflows and outflows are not yet available, analysts anticipate significant daily inflows for the various funds offered, with Grayscale’s Ethereum Trust leading in trading volume at $461 million. Furthermore, other funds like BlackRock’s iShares Ether Trust, Fidelity’s Fidelity Ethereum Fund, Bitwise’s Ethereum Fund, and VanEck also experienced significant trading volumes, pointing to a strong demand for Ethereum ETFs in the market.
HOLDING OUT
Mortgage interest rates experienced a slight decline last week, dropping to an average of 6.82% for 30-year fixed-rate mortgages. This is the lowest rate since February, nevertheless, it was not enough to motivate potential homebuyers into action. In addition, despite a decrease of over twenty basis points in recent weeks, home purchase applications declined by 4% compared to the previous week. This may be due to ongoing affordability challenges, as home prices continue to rise in many markets. Furthermore, it is worth noting that as expectations regarding a Federal Reserve rate cut happening in September remain, homebuyers may be holding out for further interest rate reductions. Moreover, applications for refinancing saw a slight increase, primarily driven by conventional and FHA loans.
BALANCED RESULTS
Alphabet has revealed that in its second quarter report it experienced a mix of successes and challenges. While meeting analyst expectations for overall revenue and earnings, the company fell short on YouTube advertising revenue, resulting in a 2% decline in its share price during after-hours trading. The quarter saw Alphabet exceed revenue estimates at $84.74 billion, with earnings per share at $1.89 compared to the projected $1.84. Google Cloud revenue outperformed expectations at $10.35 billion, while YouTube advertising revenue came in lower than anticipated at $8.66 billion. Nonetheless, despite the missed estimates in this area, the company reported growth in advertising revenue and a notable increase in net income. Alphabet’s “Other Bets” unit, which includes its self-driving car company Waymo, exhibited positive growth and received a significant multiyear investment. Moreover, CEO Sundar Pichai highlighted the company’s strong performance in Search and Cloud services, with Waymo’s expansion efforts and increasing weekly rides underscoring Alphabet’s commitment to innovation and growth across various sectors.
SIGNIFICANT PLUNGE
Tesla has experienced a significant drop in its value following the release of disappointing second-quarter earnings, in which the company reported a 7% decrease in automotive revenue, leading to a decline in its adjusted earnings margin. As a result, Tesla fell by over 8%. It is worth noting that in an effort to boost sales, Tesla has implemented price cuts and discounts, particularly in the competitive Chinese market. Nevertheless, despite this and its dominance in the electric vehicle industry in the U.S., Tesla is facing challenges from competitors due to its outdated vehicle lineup and controversial statements made by CEO Elon Musk. As of now, investors are divided in their outlook for Tesla’s future, with concerns about the company’s core car business and optimism surrounding Musk’s vision for autonomous driving and robotaxis. Musk announced plans for a new affordable car to be released next year, as well as the development of a robotaxi service, however, there are lingering doubts about Tesla’s ability to meet these targets, given Musk’s track record of setting ambitious timelines that are often delayed.
STOCK SALE
Warren Buffett has been steadily selling stocks from Berkshire Hathaway’s portfolio over the past six quarters, with a recent $1.5 billion sale of Bank of America shares. Despite Bank of America’s successful performance, Buffett’s selling may be attributed to the high stock prices and favorable tax rates. Let’s remember that BofA’s shares experienced a decline as interest rates rose, impacting its net interest income (NII), however, the bank anticipates growth in NII in the upcoming quarters, with management forecasting $14.5 billion in the fourth quarter. Moreover, it is important to remark that Buffett’s recent actions do not necessarily indicate a negative outlook on the company’s prospects. With Bank of America’s shares currently considered fairly priced, the focus of Buffett’s sale appears to be more on managing tax implications rather than reflecting any significant concerns about the bank’s performance.
