There are so many wars right now, I’ve lost count.
There’s the U.S.-China trade war. A potential U.S. war with Iran.
A war on LGBTQ people. Even a war on Christmas.
You might be all warred out, but too bad. There’s yet another war brewing.
European Central Bank (ECB) President and amateur Bob Saget impersonator, Mario Draghi, may have just initiated a currency war.
At a central-banking forum in Portugal yesterday, Draghi said that the ECB was ready to cut interest rates and restart its bond-buying program. Despite the dull nature of the speech, it was very stimulating … at least for the European economy.
President Trump was having none of it. Taking to Twitter in a fury, Trump opined that Draghi’s comments “immediately dropped the Euro against the dollar, making it easier for them to compete against the USA. They have been getting away with this for years, along with China and others.”
In short, Trump called this currency manipulation. And it arrived just ahead of the U.S. Fed’s two-day meeting on interest rates.
Analysts fear that this may be the start of a “race to the bottom” in interest rates, sending currencies like the dollar and the euro plummeting.
The Takeaway:
The worst-case scenario here is that both the Fed and the ECB try to one-up each other in cutting interest rates. The market will rejoice, sure. It loves easy money. But it could inflame recessionary pressures, especially amid Trump’s weaponization of tariffs.
Furthermore, if two of the world’s major central banks cut interest rates, others will be sure to follow just to keep pace.
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The Good: Alibaba’s Multiplicity It couldn’t be 40 billion shares, could it? I mean, that would have made this analogy work so much better. Anyway, Alibaba Group Holding Ltd. (NYSE: BABA) is headed for splitsville. Ahead of its much-hyped Hong Kong listing, the Chinese internet giant has proposed a 1-to-8 stock split. That would boost the number of BABA shares on the market from 4 billion to 32 billion. Alibaba says it’s looking for “increased flexibility.” Yoga might have been easier, in my opinion. But it does make BABA much more accessible to average investors. That could mean higher prices for BABA in the long run, which means an investing opportunity for you. The deal isn’t done yet and needs to be approved at the company’s annual meeting on July 15.
Better: MoneyGram’s Ripple Effect Before today, MoneyGram International Inc. (Nasdaq: MGI) was just a pawn in the game of life. Now, the money-transfer service has big plans and big growth potential. Last night, blockchain-technology company Ripple announce that it was taking a stake in MoneyGram. Ripple is investing $30 million in shares and warrants, valuing MoneyGram at $4.10 per share. Ripple also has the option to buy $20 million more in MGI. For Ripple, MoneyGram is a means to an end. The company will expand its xRapid payment system as part of cross-border operations. For MoneyGram, it’s a chance to play on the big cryptocurrency stage. Before you go diving into MGI stock, however, you should keep an eye on valuation. MGI is up more than 100% on the news today. You don’t want to open a crypto trade on MGI, only to have it blow up in your face should profit-taking tank the stock tomorrow. Let’s see how this plays out first. In the meantime, there are plenty of other opportunities in the crypto space just waiting to make you money! [Note: link to CYP promo].
Best: I Saw the Sign June 18, 2019: Libras, the cosmos has an opportunity for you today! But to take advantage of it, you’ll have to come back down to earth and join the social media movement. Facebook Inc. (Nasdaq: FB) is rolling out a cryptocurrency called Libra coin. If that wasn’t enough of an ego boost for you zodiac lovers out there, the coin is already backed by more than two dozen companies. Mastercard Inc. (NYSE: MA), Visa Inc. (NYSE: V), Uber Technologies Inc. (NYSE: UBER) and PayPal Holdings Inc. (Nasdaq: PYPL) are among the many big names backing Libra coin. But the big news on Libra is that it will be pegged to real currency. So, none of those extreme price shifts you’ve seen from bitcoin and the like. I know, Libras value their independence, but you need to accept that working with others is a necessary component of life. And companies specializing in blockchain technology [Note: link to PRL blockchain promo], such as social media giant Facebook, are a great place to start right now. |
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There is no alternative to the dollar. Italy could crash out of the European Union. Brexit is still a major drag. It’s crisis after crisis. But the euro will remain in its current form for decades. The dollar is the better choice for stability. No other currency can challenge the dollar as the world’s reserve currency. So, the dollar will ultimately prevail in any currency war because world economies have nowhere else to go. — Michael Carr, Editor of Peak Velocity Trader and Precision Profits Are you worried about the U.S. dollar in a currency war? Banyan Hill expert Michael Carr certainly isn’t. After all, the world has nowhere else to go for a reserve currency right now. Tell us what you think. Drop us a line at GreatStuffToday@banyanhill.com. |
Easy-Peasy Profits From
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A funny thing happened while running my stock filters this morning. A major semiconductor company appeared: Advanced Micro Devices Inc. (Nasdaq: AMD). Now, AMD showing up on a stock filter isn’t anything new. The company probably shows up on your personal stock filters all the time. You have your own personal stock filters, right? I mean, who doesn’t? But this isn’t your normal stock filter. It’s a filter designed to find undervalued and beaten-down stocks. Somehow, the company that is stealing market share across the board from Intel Corp. (Nasdaq: INTC) found its way into these results. AMD’s Ryzen processors are faster and cheaper than the industry leader’s. “I don’t think there’s any reason people would buy an Intel processor after we [launch the Ryzen 3000 line],” says Travis Kirsch, AMD’s client product management director. Ryzen semiconductors are becoming the chips of choice in data centers, artificial intelligence research, self-driving cars, gaming PCs, video game consoles … the list goes on. This company’s stock is now beaten down and undervalued. Blame the recent market turmoil, the U.S.-China trade war, tariffs … whatever you will. But don’t look this gift horse in the mouth. AMD is growing at an amazing clip for a semiconductor company. Revenue is projected to rise 18.5% next quarter and by 21% in 2020. Despite this growth, analysts continue to underestimate AMD and its meme-worthy CEO, Lisa Su. Earnings have beaten expectations by an average of 9% during the past four quarters. The bottom line is that the recent drop in semiconductor stocks is a major boon to investors in AMD. As they say on the Reddit message boards: “The sun rises with Su.” Make your portfolio shine like the sun: Buy AMD. Until next time, good trading! Regards, |
