🍨 Daily Scoop: We need real answers

By Hoda Mehr Thu, Jul 11, 2019

What you need to know?

Jerome Powell, Chairman of the Federal Reserve, did not have any kindness to spare Facebook or the cryptocurrency market. During his appearance in the House Financial Services Committee, he commented on Facebook’s Libra coin and asked the financial regulators to be patient and thorough in their process of evaluating the company’s cryptocurrency project. He, rightfully, pointed out that the current regulations do not have the right frame of reference to assess cryptocurrencies. Consumer privacy, data protection, and issues related to money laundry are among the concerns by the Chairman, who is asking the company to provide real answers to such questions.

What does it mean for investors?

Like all other innovations, it takes a significantly longer time for cryptocurrencies to get adopted by the masses. While today’s remarks by the head of the Fed brought down the prices of several cryptocurrencies, this news is a good thing. When the conversations get to the level of the head of the Federal Reserve, a path for mass adoption shapes up. While the market has interpreted it as a negative thing, in the overall scheme of things, this is good news for digital currencies.

• U.S. markets: All major indices ended up in the green on Wednesday, after investors felt the wind behind their back. Hearing what the Fed’s chairman had to say about the need to act appropriately to support the current economic expansion made them believe that a rate cut is coming. Scroll to the Overall Market section to read more about what happened. 
• Cryptocurrency: Bitcoin price surpassed $13,000 and then rolled back to slightly higher than $11,000 per coin after the remarks by the Fed’s Chairman about Facebook’s Libra. Scroll up to the introductory section to learn more about the Fed’s Chairman’s remark.

“Nostradamus of Tech Stocks” makes next shocking prediction 

A Silicon Valley millionaire has just issued an urgent new buy alert on a breakthrough tech investment most people don’t even realize exists yet…

I guarantee you that while everyone else is distracted by Bitcoin, this will be the #1 investment story of 2019.

Get the full story here.

They cut the rate. They don’t cut the rate. They cut the rate. They … 

What happened on Wednesday?

Wednesday was a happy day in the stock market. Looks like investors are going to get their beloved rate cut after all. After the Fed’s Chairman’s testimony to the House Financial Services Committee, investors concluded that the economy needs support and a rate cut is coming. The market rallied, and all major indices ended up higher than where they started that day. The Energy, Technology, and Consumer Defensives sectors were among the big winners.

Now What?

While an interest rate hike or cut is an essential part of the economy, the stock market and financial media’s reaction to every piece of news is nothing short of comical…

They cut the rate. They don’t cut the rate. They cut the rate. They …

In the end, such changes in the monetary policy are outside of the control of any individual investor. Betting on where the rate is going to end up is very difficult, if not impossible, for everyday investors. The more prudent way of responding to the daily fluctuations in the news is to keep up with it, but not shuffle your portfolio accordingly.

Red Hat keeps giving. 

On Tuesday’s Daily Scoop, we talked about our beautiful Red Hat being bought by IBM (Ticker: IBM) and leaving its investors with sizable premium. On Wednesday, the company continued with its tradition of giving. Shares of TMobile (Ticker: TMUS) were up by more than 4% after replacing Red Hat in the s&p 500 index.

While the mere fact that TMobile is being included in the s&p 500 doesn’t change anything about the company’s operational strength or market size, but the inclusion means several ETFs and indices that somewhat mirror the s&p 500 must pick up TMobile’s shares. And, that will lead to higher demand for the company’s stock. Hence, the stock price got boosted on Wednesday.

The Amazon of Africa is struggling. 

Earlier in the year, an unknown company went public and rapidly soared to sky-high levels because investors assumed they’ve found the Amazon of Africa. The stock price later crashed down to lower than its IPO price, and it continued its fall from grace on Wednesday. That company is called Jumia (Ticker: JMIA).

The stock price fall is coming after investors hearing about the company’s operational struggles and some concerns about its accounting practices and the accuracy of the numbers reported. While this young company has still a long way to go to prove itself as a winner, it is one of rare African startups that has found its way to the American stock exchanges. The company may not be a good investment yet, but its presence signals that Africa is awakening to the new technology startups.

Space stocks are coming! 

So, what happened? 

Regardless of whether you’d be daring enough (or rich enough) to buy yourself a ticket to space onboard of a Virgin Galactic ship, you’ll soon have a chance to invest in the company’s stocks. Will you?

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card