Citi Group Adjusts Its Valuation of American Technology Stocks
Citi Group has revised its valuation of American technology stocks downwards in line with the general market uptrend.
The bank’s team has downgraded its rating for financial company stocks,
recommending maintaining the current ratio during the second quarter of this year.
Citi Group analysts believe that the upward momentum of American stocks will extend to cover broader sectors beyond technology,
adopting a more cautious stance towards this sector’s stocks.
Led by Scott Chronert, the team has adjusted its recommendation for technology stocks,
preferring to maintain the current weight in investment portfolios instead of increasing it,
following earlier advice to reduce the relative weight of hardware company stocks.
Citi’s strategists have pointed out that “the investment scenario we predicted months ago is now opening the door for the growth of sectors less affected by market fluctuations, especially those sensitive to interest rate changes.
” In their analysis of the technology sector by category, analysts have continued to recommend increasing the relative weight of software companies’ stocks while maintaining the current market weight for semiconductor companies’ stocks.
As for other sectors, they have reduced their recommendation for financial companies’ stocks to maintain the current relative weight during the second quarter of the year.
S&P
The “S&P 500” index is currently trading 3% above Citi Group’s year-end target of 5100 points,
thanks to expectations of the American economy achieving a controlled downturn,
in addition to growing excitement about artificial intelligence. In a separate note,
Chronert indicated that the bank’s investor sentiment index has reached a level of euphoria,
reflecting a decreased likelihood of achieving positive returns over the next year.
Citi Group Adjusts Its Valuation of American Technology Stocks
Huawei Profits Rise on Acquisitions of Apple and Alibaba: Huawei Technologies Co. continues its trend of strong quarterly profit growth,
based on recovering its consumer business from Apple Inc.’s iPhone
and creating its cloud division in conjunction with Alibaba Group Holding.
According to Bloomberg calculations based on financial data, the networking and electronics leader
posted a net profit of about 13.9 billion yuan ($1.9 billion) in the December quarter.
This represents an increase of more than 65% compared to last year’s figure of 8.4 billion yuan.
The results underscore the progress made by Huawei,
which has been subject to US sanctions and export controls for years,
in addressing these challenges.
In August, the company introduced its flagship Mate 60 smartphone series,
which features a domestically designed and manufactured seven-nanometer processor,
triggering a wave of nationalistic popularity in the country.
In 2023, the consumer electronics division grew by 17.3%, reaching a revenue of 251.5 billion yuan.
Company Development
Huawei, which virtually disappeared from the smartphone and chip market after the US cut ties with foreign suppliers in 2019,
is now emerging as a symbol of China’s determination to counter US restrictions.
The company is building a network of chip factories to support its long-term
ambitions in electric vehicles and artificial intelligence (AI). The company’s cloud computing business grew nearly 22% year-on-year,
marking further progress in competition with Alibaba and Tencent Holdings in the home market.
This month, the company deployed an AI-based weather forecast model at its hometown Shenzhen Meteorological Office.
The company’s chips also appear in Chinese AI manufacturers’ systems,
such as the one the Hong Kong Center for Artificial Intelligence and Robotics uses to train AI assistants for neurosurgeons.
Automotive Technology
Although Huawei hasn’t come as far as Xiaomi,
which launched its own brand of electric vehicles for the first time this week.
The Shenzhen-based company is making strides in bringing technology to the automotive sector.
In 2023, the industry grew by 128%, and Huawei offered Aito vehicles in its stores in China.
Chinese Government Pressure on Apple
The return of Huawei coincides with growing pressure on Apple from the Chinese government,
which is increasingly mandating encouraging the use of domestic devices and technologies across a wide range
of industries and sectors, including public companies.
The popularity of the Mate 60 has also fueled consumer enthusiasm for local brands.
According to official data, sales of iPhones in China fell about 33% in February from a year earlier,
exacerbating falling demand for the flagship device in the largest overseas market. However, Huawei
warned in December about the risks posed by an unstable global industry and economy in 2024.
In the wake of the 7nm technological breakthrough, Washington officials are considering various responses,
ranging from blackmailing Huawei’s suppliers to using allies to bolster the existing semiconductor technology bloc.
Huawei Profits Rise on Acquisitions of Apple and Alibaba
Contracts for Differences (CFDs) generally allow investors to trade on the price difference between the opening and closing prices of a specific financial asset,
without the need to own the actual asset.
Trading contracts in Qatar offers many advantages and opportunities to investors. Here are some of the features of trading contracts in Qatar:
Asset diversity: Investors can trade a wide range of assets such as foreign currencies, indices, commodities, and even futures.
Ease of access: The internet and advanced technology allow investors to easily access trading platforms, enabling them to follow markets and make decisions at any time and from anywhere.
Leverage: Investors can use leverage to increase their trading volume compared to the balance they own. However, they should be cautious as leverage can increase risks.
Diversity of contracts: The contracts market offers a wide array of contracts in various sizes and durations, allowing investors to choose contracts that fit their goals and strategies.
Regulation and protection: The contracts market is managed by local regulatory bodies, providing protection to investors and contributing to the integrity and transparency of trading operations.
Profit opportunities from market direction: Investors can benefit from both rising and falling asset prices, as they can profit from market trends whether they are upward or downward.
Time and effort saving: Thanks to modern technology, investors can perform analyses and make decisions quickly, saving time and effort.
Trading 24/5: Investors can trade 24 hours a day, except on weekends, allowing them to take advantage of trading opportunities in different markets around the world.
Trading and Commerce
These are financial activities that involve buying and selling assets to make a profit, but there are some key differences between them.
Here are some of the main differences:
Main goal:
Trading: The main goal of trading is to profit from price fluctuations by buying and selling assets in short time frames, such as a day or a week.
Commerce: The main goal of commerce is to make a profit by selling goods or services to customers.
Investment period:
Trading: Focuses on short periods, and trading can last for very short periods, even minutes or seconds.
Commerce: Can involve long-term investment periods, where commercial companies can stay in the market for years.
Analysis and decision-making:
Trading: Requires technical and fundamental analysis to make quick decisions due to rapid market fluctuations.
Commerce: Commercial decisions may require deep market analysis and long-term evaluation.
Traded assets:
Trading: Focuses on a wide range of financial assets such as currencies, stocks, commodities, and futures.
Commerce: Involves real goods or services in trade, such as commodities, consumer goods, and services.
Risks:
Trading: Can be a high-risk process due to rapid fluctuations in the markets.
Commerce: Involves various risks, including production, market, regulatory, and commercial risks.
Time and effort:
Trading: Requires immediate effort and focus, with analysis and decision-making happening in short time frames.
Commerce: May have less time requirements, where companies can stay in the market for long periods without needing to make immediate decisions.
Ultimately, trading and commerce differ in their main goals, investment periods, types of traded assets, used analysis, and associated risks. The choice between them depends on the investor’s goals, risk tolerance, and the time they wish to allocate to financial activities.
Risks
Despite many opportunities, trading contracts in Qatar faces some challenges, including:
Legislation and regulation: Laws and regulations related to contract trading can be complex and vary from country to country, potentially exposing investors to legal challenges.
Financial risks: Using leverage means investors may face greater risks, as excessive betting can lead to significant losses.
Market volatility: Trading in financial markets can be volatile, and rapid price movements can cause unexpected losses.
Control over contracts: Investors need to understand how to control their contracts and manage risks, which requires expertise and deep understanding.
Analysis and decision-making: Contract trading requires a good understanding of technical and fundamental analysis, and making quick and accurate decisions, which can be challenging for beginners.
Geopolitical and economic impacts: Geopolitical movements and global economic developments can significantly affect markets and cause unexpected fluctuations.
Information technology: Contract trading relies heavily on technology, and any technical issues can result in lost trading opportunities or even losses.
Psychological analysis: Investors may face psychological challenges in dealing with rapid market fluctuations, requiring strong mental strength.
Commissions and fees: Fees and commissions can be costly, and investors must consider them in their trading costs.
Understanding local and global markets: Engaging in global and local markets requires a good understanding of the factors affecting these markets and their impact on contract trading.
These challenges highlight the importance of market analysis, understanding financial and technical strategies to reduce risks and increase opportunities for investors.
China bolsters cooperation with Saudi companies in the energy sector
focusing on aligning initiatives with Saudi Vision 2030
Relations between China and Saudi Arabia are witnessing notable progress,
particularly in the energy sector,
as the National Development and Reform Commission of China fully supports mutual cooperation with Saudi companies.
This support is part of joint efforts to achieve long-term strategic objectives, including exploiting investment opportunities and exchanging expertise.
Cheng Shan Jie, the head of the commission, emphasizes the significant importance of this cooperation, especially amidst ongoing acquisitions and partnerships aimed at expanding the investment horizon between the two countries. During a meeting with Amin Nasser, CEO of Aramco, Cheng expressed his country’s welcome for Saudi investments, highlighting ongoing efforts to liberalize China’s economy and facilitate foreign investment.
On its part, Aramco is looking to enhance its presence in the Chinese market by developing its capabilities to convert crude oil into chemicals and is exploring new opportunities for partnership and acquisitions to support its global ambitions.
Vision 2030
The cooperation between the two countries also includes coordinating the “Belt and Road” initiative with Saudi Vision 2030, reaffirming the joint commitment to enhance strategic relations and cooperation in multiple fields, including renewable energy and bio-materials, with the aim of achieving mutual and sustainable interests.
In the framework of these partnerships, new agreements worth over $25 billion were signed, adding to a series of previous agreements that reflect the strategic depth and fruitful cooperation between the two nations, in their pursuit of comprehensive and sustainable development in all fields.
China bolsters cooperation with Saudi companies in the energy sector
Many of us think about entering the world of online trading but are held back by a lack of knowledge and fear of loss. Therefore, Evest today explains the essential steps for a beginner trader so we can step by step journey towards success together.
Before deciding to trade, as an investor, you should get a preliminary idea about trading. That means you should avoid the mistakes most investors make so you don’t suffer any potential losses due to lack of experience.
At Evest, we have two great tools for learning trading:
Trading Academy, which is 100% free
Demo Account: You can practice what you learn in the Academy on the demo account for free, 100%
How to Open an Account and Enroll in Free Training Courses
Follow these steps to access the academy:
First, click on the “Register” button located at the top left corner of the website.
Fill in your complete and correct details as they are in your identity proof documents to avoid issues later.
After filling in your details, click on the box to agree to the terms and conditions and privacy policy after reviewing them.
Click on the “Submit” button.
Then, go to the education corner found in the main menu of the website.
Select “Academy” from the drop-down menu in the education corner, which is an educational academy that offers advice, guidance, and correct teaching in investing in global and local financial markets.
You can benefit from enrolling in training courses organized by evest.com to learn the basics, trading terms, CFDs, strategies, and a list of trading terms, among other necessary information.
You can now register for a demo account, i.e., open a demo trading account on evest.com for free for a month.
Choose one of the trading account types offered by evest.com and start immediately with the company’s team assistance.
Don’t overlook continuing to learn about trading, and the easiest way to do that is by reading articles published by evest.com about trading, its concepts, methods, strategies, and price volatility, as well as following trading news and knowing the trading indicators that must be used. All this is a treasure trove of information that costs the trader nothing to review.
Learn analysis, where you must study the basics of fundamental and technical analysis and consider many charts from different times. Analysis is what makes you determine whether to trade or not and when to do it by predicting price movements.
It’s worth mentioning that Ali Hassan, the CEO of eVest, advises investors in general and traders at eVest in particular to follow and analyze the numbers well before making any trading operation, reminding traders that numbers never lie.
Some general tips that will benefit you in trading:
Don’t let anyone trade for you or pressure you into making any trading decision.
You are responsible for your account, learning, and making profits.
Keep a safety margin to protect you from sudden market fluctuations.
Don’t use all your capital in trading.
Use risk management orders.
Combine technical analysis and fundamental analysis in trading.
Don’t rely on anyone in trading; it’s your responsibility alone.
Have a plan and, most importantly, stick to it.
Emotions are a trader’s number one enemy – never get swept away by them.
Click at the top right of the screen on “Hello (name)” and then head to the Verification Center.
In the Verification Center, you will be asked to prove your personal identity, residence, and payment method.
Personal Identity Proof: You can use a valid ID card, a valid passport, or a driving license. You must attach the front and back picture of the card. The card used must be valid for at least 6 months.
Proof of Residence: You need to prove your residence by uploading a picture of utilities and services like a water bill, electricity bill, internet bill, etc. This bill must contain your full name as used in our registered trading account and must not be older
Proof of Payment Proof of payment is required to demonstrate ownership of the funds used to finance your trading account at Evest. If you funded the account using a credit card, you need to upload a front and back picture of the credit card. When photographing the credit card, cover the first 12 numbers of the 16 numbers shown on the face of the card. Make sure your name, as used in opening our trading account, appears on the front of the card. When uploading the back picture of the credit card, cover the CVV and then upload this picture.
How to Deposit
Initially, click on the deposit button at the top right of the screen. A screen will appear offering two deposit options:
Bank Transfer: If you choose bank transfer, details of the bank accounts to which you can transfer funds to finance your trading account will be shown.
Credit Card Funding: A credit card image will appear on the screen. Enter the number shown on the front of the card, then enter your name as it is on the credit card, followed by the card’s expiry date and CVV. Finally, select the amount you wish to deposit into your trading account and press the deposit button.
How to Withdraw
The withdrawal process from the trading account is subject to a fee of $5 for each withdrawal for clients who have opened transactions with us at least once. For clients who have not traded at all, the withdrawal process is subject to a fee of $35.
Important Note
The withdrawal process from the account is conditional on the client having completed the account stabilisation procedures, which are:
Completing the Know Your Customer (KYC) questionnaire
Providing proof of personal identity
Providing proof of residence
Providing proof of ownership of the deposited funds
This process is a basic condition at any licensed trading company and is a requirement imposed on trading companies by the licensing authorities to ensure the security of the trading environment for all traders.
The Chinese demand for its products is waning, its lucrative App Store is facing scrutiny from European regulators,
and the once-prominent Apple car project has been scrapped.
Over its history, and particularly recently, Apple’s stock valuation has taken a sharp dive.
After reaching a historic high of $3 trillion in 2023, Apple’s market value
plummeted by hundreds of billions of dollars at the start of 2024,
allowing Microsoft – sometimes a competitor, sometimes an ally – to become the world’s most valuable tech company.
Here are the challenges Apple faces worldwide:
European Union pressures
The Digital Markets Act is coming into force this week, posing a new threat to Apple’s “walled garden” –
the ecosystem that encourages users of Apple devices to buy other Apple products and services.
For the first time, customers can download software from outside the App Store, a process known as sideloading.
Users will also have access to alternative payment systems and can more easily choose a new default web browser –
addressing two common complaints from developers and regulators.
Apple has long resisted such changes, arguing they would compromise its software’s user experience and security.
“Apple is forced to create technology that allows one app to install other apps, and inherently,
there is a risk,” said Phil Schiller, a senior Apple executive who now runs the App Store, in January.
The company agreed to take a smaller commission on
App Store purchases but added some additional fees that have drawn the ire of developers.
The bigger risk for Apple is the fragmentation of a business model that generates tens of billions of US dollars annually.
Separately, the European Union imposed a fine of 1.8 billion euros ($2.6 billion Singapore dollars)
on Apple this week due to an investigation into allegations
that it hindered its competitors in music streaming, including Spotify Technology.
US Department of Justice lawsuit
The US Department of Justice has been working on its case against the company for five years and is now getting closer to filing suit.
Antitrust officials allege that Apple has imposed software and hardware restrictions on its iPhones and iPads,
making it difficult for competitors to compete.
Sources familiar with the matter said the lawsuit was expected by the end of March.
However, a recent federal spending agreement may reduce the funding available for antitrust officials,
potentially affecting this timing.
Apple representatives also met with the Department of Justice in February in
a final attempt to convince the agency not to proceed with the lawsuit.
Keeping up with the AI era
Since the launch of OpenAI’s ChatGPT in 2022,
tech companies have been racing to add more generative artificial intelligence (AI) features.
Using simple instructions, this technology can create complex texts, images, and videos.
Apple has been notably absent from this frenzy, raising concerns that it is falling behind in a crucial new field.
The company has assured investors that AI has long been integral to its software and services,
ground” in AI this year at last month’s annual meeting.
“We believe it will open transformative opportunities for our users,” he said.
Behind the scenes, Apple’s software chief, Craig Federighi has instructed his teams
to expand as many new AI competencies as viable for this year’s strolling machine updates.
The tech giant is close to completing a critical new software tool for app developers that relies on AI to speed up tasks.
However, the company needs to catch up with competitors like Samsung Electronics,
which has already unveiled phones with AI features from Alphabet’s Google.
Microsoft, OpenAI’s biggest supporter, has also introduced a steady stream of AI features.
The decline in China
Apple has been experiencing a decline in China for months, and it doesn’t seem to be improving.
iPhone sales in the country dropped by a surprising 24% during the first six weeks of this year,
according to figures from Counterpoint Research.
The entire market is declining, but Apple is now falling faster than its local competitors.
According to Counterpoint data, Vivo, based in the Chinese industrial city of Dongguan,
has emerged as the country’s leading supplier.
Apple offered rare discounts in its online store in January to stimulate demand.
Local resellers have also cut iPhone prices by up to $180.
Perhaps more concerning is the spread of restrictions on the use of foreign technology in Chinese government offices.
With increasing geopolitical tensions with the United States,
Apple’s reliance on the country – both a market and a manufacturing hub – is fraught with problems.
The End of Apple’s Car Project
When news broke last week that Apple was abandoning its car project, investors welcomed the development.
After all, it meant the company was no longer spending billions of U.S. dollars on a far-fetched endeavour.
However, the project’s termination ultimately leaves Apple without a significant profit source on the horizon.
Despite the challenges of building an electric vehicle, Apple could have charged $100,000 for such a product.
Even though profit margins would likely have been minimal at best, Apple is in need of a sales boost right now.
Revenue dropped by 3% in the last fiscal year, marking the company’s worst decline since 2016.
Abandoning the car project also raises concerns that Apple is playing it safe instead of boldly venturing into new categories.
The Niche Status of Vision Pro
Apple entered a new product category in 2024, the mixed-reality market, which the company calls “spatial computing.”
The Vision Pro headset, launched on February 2nd, impressed reviewers and attracted early adopters.
Yet, it remains a $3,500 product with a somewhat unclear purpose
. The goggles are too heavy for prolonged wear, and many software developers have hesitated to create dedicated apps.
Cook’s original vision was to sell a pair of lightweight augmented reality glasses that users could wear all day.
The technology for such a device wasn’t ready yet, so Apple had to settle for a bulkier headset that combines AR with virtual reality.
The challenge now is to make Vision Pro lighter and more affordable,
making it more appealing to the average consumer.
However, this process will take years.
Tablet Doldrums
More than a decade after the iPad’s instant success, many consumers have fallen out of love with tablet computers.
Overall sales of the devices dropped to their lowest level last year since 2011, according to research firm IDC.
This isn’t just a problem for Apple, of course; the company is the leading seller of tablets, accounting for roughly 40% of shipments.
Some consumers have shifted to larger phones or reverted to laptops,
but Apple’s failure to release a new iPad model last year didn’t help.
There’s never been a drought like this since Steve Jobs first unveiled the device in 2010.
The good news is that Apple is preparing to launch new iPad models that will introduce innovations.
An updated iPad Air will be available in two sizes for the first time,
and the Pro model will feature OLED screens, short for organic light-emitting diode.
This update is crucial for a business segment that saw a 25% drop in revenue during the holiday quarter,
the device’s biggest sales period.
The Legal Battle Over the Smartwatch
In a rare move, Apple recently had to halt sales of its watch versions equipped with a blood-oxygen sensor,
due to a legal dispute with medical device manufacturer Masimo.
The watches are a central part of the company’s wearables, home, and accessories division,
a sector that generated over 10% of last year’s revenue, or nearly $40 billion.
Although Apple managed to deactivate the feature and return its watches to the market,
it was an embarrassing legal setback for a company that rarely faces such issues.
The loss of the blood-oxygen measurement capability could also hinder
Apple’s efforts to add future functionalities to the watch, such as those measuring hypertension and sleep apnea.
Talent Drain
Executive turnover is commonplace at Apple, and the company boasts a deep bench of managers.
However, the iPhone maker has recently lost some of its most distinguished leaders, especially within its design team.
This includes Bart Andre, the company’s longest-serving senior industrial designer
and one of the most significant holders of Apple patents.
Top designers Colin Burns, Shota Aoyagi, and Peter Russell-Clarke also left towards the end of last year.
After years of departures, the team once led by the legendary Jony Ive
a group instrumental in defining Apple’s aesthetic—is almost entirely gone.
Ive’s successor as department head, Evans Hankey, left last year.
The industrial design and user interface groups now report to Jeff Williams, the company’s chief operating officer.
According to sources close to the situation,
having an operations person oversee a division dedicated to design and innovation has frustrated some staff.
Cost-cutting measures have also contributed to the discontent, they say.
A Tough Quarter
In light of these circumstances, Apple’s upcoming quarterly report is anticipated to be challenging for investors.
The company has indicated that the figures will not compare favourably with last year’s period.
Apple overcame the last COVID-related supply constraints in the previous quarter and enjoyed increased sales due to pent-up demand.
The company will not benefit from such an unexpected gain this time around.
Analysts predict a sales decline of about 4% for the quarter, extending until the end of this month.
This means Apple’s revenue will have decreased in five of the last six quarters.
“Apple shares, in our view, are at a crossroads,” said Rosenblatt Securities analyst Barton Crockett in a note this week.
The failure of the car project and the not-quite-ready Vision Pro have diminished the company’s allure.
The question is whether Apple’s push into generative AI can restore some of its lustre. “Apple has the potential to regain some of this shine.”
The top 10 challenges Apple faces, from AI to China
American stocks saw a massive leap, reaching new record levels following signals from the Federal Reserve about its direction towards reducing interest rates for the first time since the onset of the pandemic crisis. In a significant shift, the “S&P 500” index crossed the 5200 point threshold amid expectations that the end of the Federal Reserve’s more aggressive monetary tightening policy of this generation will continue to boost the profits of American companies.
This increase was almost broad-based, with stock prices of sectors that had lagged this year, such as small-cap stocks, also rising. Short-term Treasury bonds outperformed, as traders now see a higher likelihood of an interest rate cut in June. Federal officials maintained their forecasts for three interest rate cuts during the current year, signaling a move towards slowing the pace of reducing the central bank’s bond holdings, in addition to hinting that they are not disturbed by the recent rise in inflation.
While continuing to highlight the officials’ desire to see more evidence of price declines,
Federal Reserve Chair Jerome Powell also said it would be appropriate to start easing monetary policy “sometime this year.
” Chris Zaccarelli from the “Independent Advisor Alliance” noted that “Overall,
the takeaway from the press conference is that the absence of new news is news in itself,
meaning the markets still have the green light to continue rising…
This Federal Reserve will not stand in the way of the market’s uptrend.
” The “Nasdaq 100” index rose by 1.2%, driven by strong revenue forecasts from “Micron Technology” thanks to the increasing demand for artificial intelligence devices.
The yield on two-year bonds dropped seven basis points to 4.6%, and the dollar’s exchange rate declined.
Evaluating the Federal Meeting
From Wall Street’s perspective, the recent Federal meeting was assessed.
Krishna Guha from “Evercore” considers that the markets did not experience significant fluctuations following this meeting,
with Federal Chair Powell continuing a cautious approach supportive of stock prices,
stemming from the initial release of Federal data.
The primary message is that the Federal is keen to cut interest rates but is waiting for the right time to do so responsibly,
maintaining its plans for three rate cuts during the current year starting from June.
Peter Boockvar sees Powell leaning towards easing today,
indicating that even a strong job market would not halt the beginning of interest rate cuts,
which led to the decrease in short-term bond yields.
Sonu Varghese from “Carson Group” speaks of a complete leaning towards monetary easing,
leaving the door open for interest rate cuts even amid expectations of a slight increase in inflation and further economic growth.
Neil Birrell from “Premier Miton Investors” emphasizes the Federal’s effort to achieve a smooth economic downturn,
while Sima Shah from “Principal Asset Management” points out that the Federal is willing to risk cutting interest rates even before getting closer to the inflation target, which carries potential risks. Whitney Watson from “Goldman Sachs Asset Management” sees major central banks heading towards interest rate cuts in the coming months, benefiting high-quality fixed income bonds.
Michelle Cluver from “Global X” considers the recent data very encouraging,
increasing the likelihood of the Federal cutting interest rates in June,
while Jason Pride from “Glenmede” emphasizes that patience is currently the Federal’s preferred strategy,
keeping a continuous focus on inflation.
Christian Hoffman from “Thornburg Investment Management” cautions that fixed income will continue to move between expectations of lower interest rates,
which is good for bonds.
Market performance:
“S&P 500” increased by 0.9%
“Nasdaq 100” rose by 1.2%
“Dow Jones” went up by 1%
The immediate Bloomberg dollar index fell by 0.4%
“Bitcoin” price increased by 3.1%
The value of “Ether” rose by 2.9%
The spot gold price climbed by 1.2%
American financial markets are breaking records as interest rate
Here is a step-by-step guide for beginners in the world of trading:
Financial Education
Understanding Market Basics: Start by learning basic terms such as stocks, bonds, currencies, indices, and technical and fundamental analysis.
Educational Resources: Benefit from books, online courses, webinars, and academic articles.
Setting Trading Goals
Short and Long-Term Goals: Determine what you want to achieve through trading – are you looking for extra income, retirement, or capital growth?
Risk Level: Accept your level of risk and do not invest money you cannot afford to lose.
Choosing a Broker
Licenses and Regulations: Choose a licensed and regulated broker to ensure safety and transparency.
Fees and Commissions: Compare the costs of brokers and the types of accounts they offer.
Trading Tools: Ensure the availability of analytical and educational tools.
Preparing a Trading Plan
Determining Strategies: Choose trading strategies that match your goals and risk level.
Risk Management: Use stop-loss orders and take-profit orders to minimize risks.
Paper Trading (Simulation)
Before investing real money, practice trading in a simulated environment to evaluate your strategies and your efficiency in managing risk.
Starting Trading
Choosing Assets: Start with markets you are comfortable with and understand well.
Analysis: Use technical and fundamental analysis to make informed decisions.
Review and Evaluation
Performance Evaluation: Regularly review your performance to identify strengths and weaknesses.
Adapting Strategies: Be prepared to adjust your plan and strategies based on performance and market changes.
Patience and Discipline
Trading requires patience and discipline. Avoid hasty decisions and emotional trading.
Continuous Learning and Adaptation
Markets are constantly changing, and it’s essential to continue learning and adapting to new conditions.
Benefit from experiences and mistakes as opportunities to learn and improve.
Trading is not a path to quick riches and requires long-term commitment and careful practice.
Following these steps, you’ll be better positioned to understand the markets and build an effective trading strategy.
Advantages of Trading
Trading in financial markets offers several advantages that attract investors and traders from various backgrounds and financial goals. Here are some of the main advantages:
Potential Profits in Both Rising and Falling Markets
Traders can benefit from market movements, buying assets in rising markets and selling in falling markets.
High Liquidity
Financial markets, especially stocks and forex, have high liquidity, meaning assets can be quickly sold and bought at market prices.
Diverse Investment Opportunities
Traders can choose from a wide range of assets for trading, including stocks, bonds, currencies (forex), commodities, indices, and digital currencies.
Leverage
Leverage allows traders to open trading positions more significant than their available capital, increasing the potential for large profits (as well as losses).
Easy Access
Online trading platforms and easy access to financial information and news make trading accessible to almost everyone at any time and anywhere.
Possibility of Automated Trading
Traders can use automated programs to execute trading strategies automatically, reducing the need for continuous monitoring and removing emotion from trading decisions.
Control and Flexibility
Trading gives investors complete control over their investment decisions and the flexibility to quickly adjust their positions in the market in response to market changes.
Opportunity for Learning and Growth
Trading offers continuous opportunities for learning and developing financial and analytical skills, benefiting traders in other aspects of their financial lives.
Despite these advantages, it’s important to note that trading also involves financial risks that must be considered. Risk management and continuous education are essential to success in the trading world. Traders should invest wisely, use the appropriate tools and strategies to protect their investments, and responsibly achieve their financial goals.
Trading Risks
Trading in financial markets carries risks that traders and investors must know before engaging in any trading activities.
Here are some of the main risks:
Market Risks
Market Volatility: Prices in financial markets are volatile and can change quickly due to economic news, geopolitical events, or changes in supply and demand.
Capital Loss: There is always the possibility of losing part or all of the invested funds.
Leverage Risks
Leverage enhances potential profits but also increases the size of possible losses. Excessive use of leverage can lead to losses exceeding the original capital.
Performance Risks
Slippage: The difference between the expected price of a trade and the price at which the trade is actually executed. Slippage can occur in fast-moving markets.
Price gaps can occur between trading sessions or after economic announcements, leading to unexpected losses.
Technology Risks
System failure, technical glitches, and connectivity issues can hinder a trader’s ability to execute trades promptly or at desired prices.
Broker Risks
Choosing a broker requires utmost care. Unregulated or poorly reputed brokers may put funds at risk.
Currency Risks
Exchange rate fluctuations can affect profits and losses in forex trading or trading assets in foreign currencies.
Emotional and Psychological Risks
Emotional decisions can lead to misjudgment and ill-considered trading decisions. Fear and greed are among the biggest obstacles to successful trading.
Inflation Risks
Inflation can affect the value of currencies and investment assets, leading to a decrease in the purchasing power of money and the erosion of actual investment returns.
Liquidity Risks
Some assets may be less liquid than others, making it challenging to sell them quickly without a significant price reduction.
To deal with these risks, traders and investors should adopt effective risk management strategies, such as using stop-loss orders, diversifying their investment portfolio, and continuously educating themselves about the markets and the assets they are trading. Discipline in following a trading plan and maintaining awareness of external factors that could affect the markets is also crucial.
Risk Management Strategies
Risk management strategies are a cornerstone for any successful investor or trader.
It helps minimize potential losses and preserve capital.
Here are some of the most critical risk management strategies:
Determining the Risk Percentage per Trade
Set a fixed percentage of your total capital that you can risk on each trade. A common rule is not to risk more than 1% to 2% of your capital on a single trade.
Using Stop-Loss Orders
Place stop-loss orders to automatically close a trade at a certain loss point to limit losses.
Diversification
Distribute investments across a wide range of assets to reduce risk. Diversification can help mitigate losses in case a particular market performs poorly.
Using Leverage Wisely
Leverage increases potential profits but also increases risks. Use it cautiously and understand its impact on your portfolio.
Minimizing Large Positions
Avoid placing much of your capital in a single trade or market. Large trades increase risk exposure.
Following Market News and Analysis
Keeping up with economic news and analyses can help anticipate potential market movements and adjust trading strategies accordingly.
Managing Emotions
Avoid making trading decisions based on emotions such as greed or fear. Stick to your trading plan and strategy without letting emotions influence your decisions.
Regularly Reviewing and Evaluating Performance Regularly review your trades and performance to determine if your risk management strategies are effective, and make adjustments when necessary.
Applying these strategies regularly can help protect capital and achieve stable results over the long term. It’s important to remember that not all risks can be removed from trading. Still, through effective risk management strategies, the negative impact of potential losses can be minimized, enhancing the chances of success in the financial markets.
Markets are gearing up to receive more guidance regarding the Federal Reserve’s plans on interest rates.
At the beginning of the trading week, major technology companies helped push Wall Street indices higher,
ahead of a series of anticipated decisions from central banks across the United States, Britain, and Japan.
After a recent decline, stock prices have improved, with market leaders outperforming.
Shares of Alphabet Inc soared following reports from Bloomberg News that
Apple is discussing the incorporation of Google’s AI engine, Gemini, into iPhone devices.
Nvidia CEO Jensen Huang introduced new chips aimed at expanding the company’s dominance in the artificial intelligence sector.
Anthony Saglimbeni from Ameriprise stressed the importance of not overlooking the areas that drive most of the companies’ profits,
noting the stark difference in profit growth between major tech companies and other companies that led the tech sector at the turn of the century.
Wall Street Gains
Wall Street is also preparing for more indications about the Federal Reserve’s interest rate plans,
in a week witnessing a significant number of central bank decisions that affect nearly half of the global economy.
This week is set to be the most active in 2024 so far, with decisions impacting the borrowing costs for six of the world’s most traded currencies.
The three-day decline of the S&P 500 index ended, and the Nasdaq 100 rose by 1%, while the index of the “Magnificent Seven” tech companies doubled.
The two-year U.S. bond yields remained close to their highest levels in 2024, amid ongoing erosion of expectations for a Federal Reserve rate cut.
Some changes and surprises are expected in the central banks’ meetings, potentially leading to future market volatilities.
Before the Federal Reserve’s decision, Japan is preparing for a historic moment by ending its negative interest rate policy,
the last country globally to implement this policy, leading to an increase in bets on the yen in futures contracts to the highest level since 2007.
Investors and analysts closely monitor the movements of the Federal Reserve and other central banks,
anticipating their impact on the stock and bond markets and preparing for potential volatilities based on these decisions
and expectations related to inflation and interest rates.
Tech Stocks Propel Wall Street Ahead of Crucial Central Bank Decisions Week
Nvidia Records Tenth Consecutive Week of Record Gains Supported by Artificial Intelligence
For the tenth consecutive week, the increasing demand for artificial intelligence technologies has led Nvidia’s stock to rise,
marking the longest streak of weekly gains in the company’s history.
The stock price of the renowned chip manufacturer increased by 0.4% in the past week, continuing to set records for 2024.
In contrast, the Philadelphia semiconductor stock index lost 4% of its value this week, facing its largest decline since January.
In a surge that lasted ten weeks, Nvidia’s stock price jumped by approximately 80%,
confirming the continued high confidence from investors due to the significant increase in demand for chips supporting artificial intelligence applications.
It’s noted that Nvidia has topped the list of the most profitable companies in the “Nasdaq 100” index this year,
maintaining its momentum that began in the previous year, 2023. Thanks to this increase in stock price,
Nvidia’s market value reached about $2.2 trillion,
making it the third-largest company in terms of market value, behind Apple and Microsoft.
The next major test for Nvidia’s stock is anticipated on Monday next week,
where the company’s CEO, Jensen Huang,
will deliver a speech at the company’s annual GTC (GPU Technology Conference).
Nvidia Records Tenth Consecutive Week of Record Gains
