Stocks and Securities

Stocks are poised to open higher today with the The S&P 500 up10 or 0.36%, the Nasdaq up 37 points or +0.5% and the Dow Industrial average up 84 points or 0.33%.

Tuesday (Aug 14)

  • Morning: AAP ARRY BZUN CAE CDK CSIQ CVIA EAT EYE GDS HD MMYT TPR
  • Afternoon: A CDLX CGC CREE DDS FENG HOLI MYGN PETQ VIAV PETQ

Notables: Home Depot (NYSE:HD), Cree (NASDAQ:CREE) and Agilent Technologies (NYSE:A)

Home Depot (HD) is expected to report Q2 revenue of $30.01B and EPS of $2.84.  Additionally, Home Depot (HD) is seen posting comparable sales growth of 6.6% during the quarter.

Consumer Edge Research analyst David Schick stated that, “We expect comp acceleration relative to 1Q18 given strong seasonal sales this quarter after a delayed start to Spring,”, while adding,  “Overall housing macro feels slightly less favourable than in prior quarters, though still supportive,”.

Dow Industrial AverageS&P 500Nasdaq 100Russell 2000

 

 

 

 

 

 

 

 

 

 

 

On the oil front, U.S. West Texas Intermediate (WTI) and international benchmark Brent crude oil futures went on a wild ride last week before closing lower. At one point last week, the U.S. futures contract was down about 2.40 percent before clawing back nearly half of that loss.

Crude oil WTI - Oil markets and oil pricesCrude oil Brent - oil markets and oil prices

 

 

 

 

 

 

This morning, October WTI  is up $0.62 or 0.92% at $67.82,  and October Brent futures up $0.66 or 0.91% at $73.27. Bullish investors are holding out hope that the Iranian sanctions have not been fully priced into Brent, leaving room for a significant run-up in prices after November 1 when the full effect of the sanctions begin to take place.

 

What are the best stocks to buy in this market?

 

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Blockchain and Cryptocurrency

Bitcoin (BTC) price down 6.42% to $6066 dipping below $6000 overnight and Ethereum (ETH) down 17% trading at $267. Market capitalization decreased to $193B USD from $217B USD. This 24 hour volume of $15.3B is about $2B USD lower than yesterday. BTC dominance of 53.9% is up about 2% compared to yesterday.

Bitcoin price - BTC/USD chartEthereum (ETH) chart - ETH/USD

 

 

 

 

 

 

Read our recent post consisting of Technical Analysis for Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCC), Cardano (ADA), Stellar (XLM), Digibyte (DGB), NEO (NEO), EOS (EOS), and Nucleus.Vision (NCASH).

What is causing the drop in price of Ethereum (ETH)?

Investors have seen the price of Ethereum (ETH) plummet about 50% in the last month. Most are blaming the market conditions. As it may be true, there is growing evidence that is suggestive of more significant issues with Ethereum (ETH).

Issues with Scaling

The main issue continues to be and has been scaling. Ethereum (ETH) block size has suppressed 1TB  with its growing popularity. I do not need to remind our readers of what happened to Ethereum (ETH) when it encountered the popular Crypto Kitty game. The game single handedly brought the ETH network to its knees. That was an small indication of what would happen if one of many coins was mass adopted.

There appears to be a decreasing number of Full Archive Nodes, which are essentially responsible for updating the Ethereum (ETH) network. You can imagine that with decreasing number of these nodes, along with increased adoption results in a creation of a bottleneck that is ironically turning the Ethereum (ETH) network into a centralized network.

The number of nodes are growing smaller as it is becoming harder for the regular Joe to maintain the network due to increased hardware and bandwidth demands. Some may argue that the light nodes could help with this issue. However, they are not nearly as secure, and thus, with ever-growing number of light nodes indicates a larger issue – an ever-growing network and security issues.

There have been suggested methods to aid in this scaling issue. Solutions such as the Casper PoS, Sharding and Layer 2 solutions. The main issues with these are plentiful. Casper PoS needs 32ETH to stake and fundamentally encourages a centralized system, giving power to those with the most money.

For those unaware of Sharding, it essentially takes one blockchain and converts it into multiple blockchains. Issues with Sharding are similar to Casper Pos as stacking and needing significant capital is another issue to consider when looking at Sharding.

There is some hope. The Layer2 solutions such as Loom Network and Raiden do provide some interesting opportunity in aiding with Ethereum (ETH) scaling solution. They essentially allow for side-chains to be built on top of the Ethereum (ETH) base-layer.

We recommend our readers take time to look at Loom as it may be a great investing opportunity. 

 

What is the real use for Ethereum (ETH)?

other than Tokenization – what other use cases are there for Ethereum (ETH) ? Go ahead – we’ll wait. We saw an insane number of ICOs last year resulting in creation of numerous tokens for various “demands” and none for which saw any actual real world usage. It is sad, but true. This is something that we have discussed internally since day one. Ask yourself, do you walk around with 500 different coins when you leave the house? Do you carry your bread coin, beer coin, parking coin…? No.

There seems to be a fundamental flaw in Smart contracts. They are difficult to write, they are difficult to learn how to write. There is ever growing number of people who THINK they know how to write them, but really don’t. This seems to be the theme of this space. If we could use one word to describe this space, it would be inexperienced.

If you are going to make a decentralized case for Ethereum (ETH) , please don’t. Ethereum (ETH) has proven to be a poor store of value due to its unlimited supply. Additionally, there seems to be a declining number of Dapps  – the second major use case for Ethereum (ETH) – you can expect Ethereum (ETH) to continue to decline.

 

Where do we look for opportunities in this market?