This week’s main story comes from Coinbase. The largest cryptocurrency exchange platform will start trading on Wednesday, April 14, 2021, under the ticker symbol COIN; see below for more details. Other trending stories come from Microsoft’s $16 billion acquisition of Nuance, NVIDIA’s plan to produce the CPU, and Alibaba’s $2.8 billion antitrust fine. Before going into the stories, let’s look at how the market performs, leading to tomorrow’s key inflation report.
|S&P 500||4,127.99||– 0.02% (-0.81)|
|Dow 30||33,800.60||– 0.16% (-55.20)|
|NASDAQ||13,900.18||– 0.36% (-50.19)|
|Russell 2000||2,243.47||– 0.43% (-9.69)|
|VIX||20.30||+ 1.32% (+0.22)|
|US 2-YR||0.18%||+ 2 bps|
|US 10-YR||1.69%||+ 3 bps|
|OIL||59.53||+ 0.18% (+0.11)|
|GOLD||1,730.20||– 0.14% (-2.50)|
|Bitcoin||60,379.68||+ 1.11% (+663.31)|
Stock Markets: US stock indexes across the board had a pullback today, bracing tomorrow’s essential inflation report release. So far, the COVID-19 impacted stocks such as energy and cyclical sectors have outperformed the technology sectors. The market rotation from growth to value stock continues and causes the broad index like S&P 500 and Dow 30 to surpass the Nasdaq and Russell 2000.
Bond Market: The short-term US government bond yields continue to go up by 2 – 3 basis points after the Federal Reserve continues easy money policy. The auction of $38 billion of 10 years note appeared to not caused a significant move in the market.
Economy: the Federal Reserve will release the latest inflation data tomorrow. Globalization has helped to reduce inflation by lowering the cost of goods produced. The US core inflation is currently at 1.3%, while the unemployment rate is hovering around 6%.
Oil: NY state fund sold the Canadian oil sands stocks to meet climate change commitment. Meanwhile, the US is ramping up oil production close to 4.4 million barrels per day in May. Oil price is slightly up to nearly $60 per barrel as demand rises.
Gold and Metal: Analyst expects silver to outperform gold through 2021. The silver consumption for industrial use is expected to rise to meet the demand for electronics and photovoltaic sectors.
Bitcoin: Bitcoin hit another record high exceeding US$60,000 in anticipation of Coinbase IPO this week. Coinbase is a cryptocurrency exchange platform with a revenue of $1.14 billion and an initial market capitalization of $28 billion. The latest estimation is ranging from $64 – $100 billion.
Coinbase will begin trading on Nasdaq under the ticker symbol COIN on Wednesday, April 14, 2021, with an initial share price of $156.09 per share. The IPO news has brought Bitcoin to another record high of $60,379 or equal to $1.135 trillion in market capitalization.
The company was founded in 2012 as a platform to trade and exchange over 50 cryptocurrencies. The platform has 56 million users, serves 7,000 institutional customers in 100 countries. The company also provides services for digital wallets and advanced trading options.
Based on the SEC filing, the company reported $1.14 billion in revenue for the fiscal year ending on December 31, 2021, with a net income of $322 million and an EBITDA of $527 million. Coinbase reported 6.1 million users monthly with a trading volume of $335 billion, representing 11.3% of the overall cryptocurrency market share.
The main revenue source comes from the transaction fees. The US investors will pay a 1.49% fee for conversions using a bank account, 3.99% for crypto purchase with a debit card, and 1.5% for any other transaction. The success of the company will be dependent on the volume of transactions in cryptocurrencies. Bitcoin and Ethereum make up the largest share of transaction volume. The main risk will come from the central bank-issued cryptocurrency.
Microsoft – The technology giant will expand into the healthcare industry through Nuance’s $16 billion acquisition. The company is a voice-based artificial intelligence that was instrumental in developing Apple’s digital assistant Siri. Microsoft offered a 23% premium with a total transaction of $19.7 billion, including debt. Nuance’s stock jumped 16% on Monday.
Nvidia – The graphic card maker announced to enter the CPU business, which becomes a direct competitor for Intel and AMD. NVIDIA shares jumped 5.6%, while Intel’s dropped by 4.1% on Monday trading.
Alibaba – Chinese regulator fined Alibaba $2.75 billion for an antitrust violation. The giant e-commerce was accused of abusing its dominance to prevent other merchants from using other platforms.