Archive for Harry Robertson

Cathie Wood has now dumped $266 million of Tesla shares this month – despite being ultra-bullish on the stock

Cathie Wood Ark Invest
Cathie Wood has been trimming Ark Invest's Tesla holdings.
  • Cathie Wood's Ark Invest has now sold more than $260 million of Tesla stock in September.
  • That's despite the fact that she thinks Tesla is worth around 300% more than Wednesday's closing price.
  • Wood has previously said she likes to take profit on stocks, but Tesla has run into some supply-chain issues.
  • See more stories on Insider's business page.

Superstar investor Cathie Wood has now sold around $266 million of Tesla stock in September - despite predicting that the company is worth 300% more than Wednesday's closing price.

Wood's Ark Invest group sold 81,609 shares of the electric-car maker, worth around $62 million, on Wednesday, according to the company's daily trade information.

That takes total Tesla sales by Ark Invest's exchange-traded funds to around $266 million in September, according to Bloomberg calculations.

Ark did not give a reason for the sales. Insider has contacted the company for comment.

However, Wood has previously said that she likes to take profit after a company's stock has gained and to try to buy when they dip.

Wood explained her trading approach to CNBC last year. She said that when there's hype around a stock, "we naturally just take profits because we know we're going to get another opportunity associated with controversy to buy the stock lower."

Read more: Ryan Jacob's flagship tech fund has tripled the S&P 500 and returned 1,876% to investors over 24 years. He told us how he's done it, and 5 stocks he expects to lead his portfolio into the future.

Tesla's share price has risen more than 22% over the last three months, despite having a difficult start for the year.

Wood is highly bullish on the Elon Musk-led company, which remains Ark Invest's single biggest holding and made up 10.5% of the $26 billion Ark Innovation ETF as of Wednesday.

She told Yahoo Finance that she thinks the car maker is worth around $3,000, saying she's pleased with its growing market share. Tesla closed at $755,83 on Wednesday.

However, Tesla has been caught up in the global supply-chain problems that are hitting businesses in the US and Europe as economies rapidly reopen.

Company CEO Musk tweeted early in September that "super crazy supply chain shortages" were delaying its new Roadster model until 2023.

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UK inflation surges to nine-year high of 3.2% in August as food and fuel prices jump

UK restaurant dining drinking bar
Prices for eating and drinking out rose in August as inflation hit 3.2%.
  • UK inflation rose at the fastest pace in nine years in August, hitting 3.2% year-on-year.
  • The Office for National Statistics said gains in food, restaurant and transport prices were key factors.
  • Economies around the world are dealing with strong inflation, putting pressure on central banks.
  • See more stories on Insider's business page.

UK inflation hit a nine-year high in August as the economy reopened, with food and fuel prices climbing sharply, the country's Office for National Statistics said Wednesday.

Year-on-year consumer price index inflation came in at 3.2% in August, the fastest rate since March 2012, after slowing to 2% in July. Economists had been expecting a rise to 2.9%, according to Bloomberg data.

Month-on-month, CPI inflation came in at 0.7% in August after flatlining in July, the ONS said. Economists had been expecting a rate of 0.5%.

The ONS said gains in prices of food, restaurants and hotels, and transport contributed to the jump. It said rising fuel prices were the main factor pushing up transport costs.

However, it urged caution in reading too much into August's numbers. The statistics body said a factor pushing up year-on-year inflation was the fact that food prices fell sharply in August 2020, the comparative month, as a result of the government's "eat out to help out" meal subsidy scheme.

The pound climbed after the data was released and stood 0.15% higher at $1.383 in European trading. The FTSE 100 stock index was roughly flat.

Read more: Real estate will play a vital role for investors as inflation heats up, according to the world's largest asset manager. Here are 8 things BlackRock says investors should focus on as they fill out their real-asset portfolios.

Inflation has surged in the UK and other advanced economies in recent months as growth has bounced back after the lifting of coronavirus restrictions.

The Bank of England has predicted that inflation will rise as high as 4% before the end of the year. But, along with the US and Eurozone's central banks, it thinks the price rises will prove transitory and expects inflation to fall back to its 2% target by 2023.

Yet Paul Dales, chief UK economist at Capital Economics, said August's figure may well be the first step to inflation shooting up to 4.5%. He said higher energy prices are likely to push up the figure further than the Bank of England thinks.

But he added: "Inflation will fall sharply next year as a lot of these upward influences unwind. By the end of 2022, it may be below 2.0% again."

Dales said the next few months will be an "uncomfortable period" for the BOE but said it is unlikely to raise interest rates from their current record-low level of 0.1% until 2023.

The UK data came a day after figures showed that US CPI inflation cooled to 5.3% in August from a 13-year high of 5.4% in July. Month-on-month, US inflation slowed to 0.3% from 0.5% a month earlier.

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Mike Novogratz says the bitcoin market got too excited before the latest crash – and singles out highly leveraged retail traders

Mike Novogratz
  • Crypto billionaire Mike Novogratz said Tuesday's bitcoin crash came after the market got too excited.
  • He said retail investors using large amounts of leverage were a key factor in the sharp drawdown.
  • Bitcoin fell as much as 17% on Tuesday as the cryptocurrency became legal tender in El Salvador.
  • See more stories on Insider's business page.

Crypto billionaire Mike Novogratz has said the latest plunge in bitcoin is the result of investors getting too excited about recent developments in the crypto space, and said excess leverage had fueled the volatility.

Bitcoin dropped as much as 17% on Tuesday after El Salvador's rollout of the cryptocurrency as legal tender was afflicted by glitches. It was around 1% lower at $46,420 on Wednesday, down from above $52,000 early Tuesday.

"I think we just got too excited and this was a little air being popped out of the balloon," Novogratz said in a Bloomberg TV interview on Tuesday. "The market got too long."

Novogratz, who runs crypto investment firm Galaxy Digital and is an influential figure in the space, said large amounts of leverage in the system contributed to the steep falls.

"There's lots of retail money, a lot of it's leveraged," he said. "There was about $4 billion of liquidations that happened in a short period of timeā€¦ That's mostly leveraged offshore in places like FTX and Binance."

Read more: A research analyst at a $2 billion crypto firm lays out the bull case for polkadot that most investors are overlooking - and shares why cardano's ada is looking overvalued after a stellar run

Exchanges such as Binance, Bybit and Huobi allow users to borrow large sums to trade with. Analysts said in recent weeks, traders had been using this leverage to "go long" - that is, bet that the price will rise - on bitcoin and other cryptos.

When cryptocurrency prices fall, traders who have gone long using leverage often sell out of their positions, or the exchange automatically liquidates them to limit losses. This often sends prices down further, triggering more liquidations in a cascade effect.

Novogratz told Bloomberg he thought the market had become excited with good reason. He said Visa buying a non-fungible token for $150,000 and Amazon posting a crypto job opening had made many people think the technology is here to stay.

He said he was confident El Salvador would succeed in its bitcoin rollout, saying the token could become used to send remittances.

"Whenever you're doing a new technology rollout there are glitches," he said. "Come back in six weeks or 12 weeks and let's talk about how it's working."

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Ethereum’s daily issuance just went negative for the first time, following the network overhaul that burns coins

Ethereum ether coins network upgrades
The ethereum network runs the ether cryptocurrency, the second-biggest after bitcoin.
  • Ethereum recorded negative daily net issuance for the first time on Friday, The Block data shows.
  • Analysts said a boom in NFTs was pushing up use of the network - leading to more tokens being burned.
  • A network overhaul in August led to some of each transaction fee being "burned", or destroyed.
  • See more stories on Insider's business page.

More ether was burned than created on Friday, the first time daily net issuance has been negative on the ethereum network.

The negative issuance is a result of the overhaul of the ethereum network that came into force in early August, which "burns" or destroys part of the fee that users pay to have their transactions verified.

Data from The Block's ether dashboard showed that issuance was -334 on Friday, after 13,840 ether were burned but 13,506 were created. One ether was worth $3,940 on Monday.

Stan Kladko, cofounder of ethereum development company Skale Labs, told Insider a surge in interest in non-fungible tokens was causing record amounts of ether to be burned.

Strong interest in NFTs - which largely run on ethereum - have been driving up activity and transaction fees on the network, Kladko said.

Read more: The boss of a crypto data firm that serves over 200 asset managers shares his top 7 altcoins as well as 3 tips for retail investors looking to break into the industry

Since the August network upgrade, codenamed EIP-1559, part of each transaction fee has been burned, as a result of technical changes that aim to make fees more predictable for users.

The changes mean that more activity and higher fees leads to more ether being burned. On Friday, the amount of ether burned was more than was created and given to "miners" as a reward for validating transactions.

The 13,840 ether burned on Friday was a record amount and was up from 11,130 a week earlier.

Lex Sokolin of ethereum development company ConsenSys said it was unlikely that net issuance would be persistently deflationary.

"We would expect low inflation rather than ongoing deflation," he told Insider. "But in the short term, demand is likely to remain high as new industries and markets shift to mainnet."

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UK regulator says celebrities such as Kim Kardashian are putting investors at risk by pushing unknown crypto tokens

Kim Kardashian Paris
Kim Kardashian promoted an unknown crypto token to her followers in June.
  • Celebrities such as Kim Kardashian are putting investors at risk by advertising crypto tokens, a UK regulator said.
  • The chair of the Financial Conduct Authority said online influencers regularly promote crypto scams.
  • Kardashian advertised a crypto token called ethereum max on her Instagram account in June.
  • See more stories on Insider's business page.

The UK's financial watchdog has said celebrities such as Kim Kardashian are putting retail investors at risk by pushing obscure crypto tokens.

Kardashian advertised the little-known cryptocurrency ethereum max to her more than 200 million Instagram followers in June.

In a speech on the difficulties of regulating crypto, the chair of the UK's Financial Conduct Authority said Kardashian's post was probably the financial promotion with the single biggest audience reach in history.

Yet he said it was a prime example of how celebrity influencers can lure investors toward coins that could turn out to be scams. Paris Hilton and DJ Khaled are among the numerous other celebrities to have promoted crypto projects.

Read more: Former SEC chairman Jay Clayton told us why he is joining the advisory board of crypto infrastructure unicorn Fireblocks - and shares his outlook on the regulation of digital assets

"In line with Instagram's rules, [Kardashian] disclosed that this was an ad," Charles Randall told the Cambridge International Symposium on Economic Crime on Monday.

"But she didn't have to disclose that ethereum max - not to be confused with ethereum - was a speculative digital token created a month before by unknown developers - one of hundreds of such tokens that fill the crypto-exchanges."

Randall added: "Of course, I can't say whether this particular token is a scam. But social media influencers are routinely paid by scammers to help them pump and dump new tokens on the back of pure speculation. Some influencers promote coins that turn out simply not to exist at all."

The FCA chair said regulators should have more powers over the crypto world, with a focus on disreputable cryptocurrency promotions and the risks arising from regulated financial businesses trading in unregulated digital tokens.

Randall also raised the concern that regulating cryptocurrencies could give them too much legitimacy in the eyes of consumers. Yet he concluded that more rules are needed, although he said it will take "a great deal of careful thought to craft a regulatory regime" for crypto.

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Oil prices drop 1% after Saudi Arabia cuts prices for Asian buyers, intensifying worries about demand

saudi aramco
Saudi Aramco said it would cut oil prices for Asia.
  • Oil prices fell around 1% on Monday after Saudi Arabia cut prices for the Asian market.
  • The move sparked concerns about demand in Asia, where the Delta variant is hitting economies.
  • Investors also worried about the slowdown in the US labor market recovery in August.
  • See more stories on Insider's business page.

Oil prices fell on Monday after Saudi Arabia cut prices for the Asian market by more than expected, intensifying concerns about weak demand from the impact of the Delta coronavirus variant.

Brent crude oil fell as much as 1.4% to $71.51 before paring its losses. It stood 0.66% lower at $72.13 in thin morning trading in Europe.

Saudi Aramco, the kingdom's state-owned oil company, told Asian customers on Sunday it will cut October's official selling prices by at least $1 a barrel, according to Reuters. The cuts, which apply to all crude grades delivered to the region, were considerably bigger than expected.

"Evidently Saudi Arabia had overestimated the strength of oil demand in Asia a month ago and has now been forced to backpedal," said Commerzbank analyst Carsten Fritsch in a note on Monday.

Read more: 2 commodities experts told us this is one of the most exciting environments they've seen in 40 years of investing. Here's why they're upbeat, and what they're buying to profit from it.

The Organization of the Petroleum Exporting Countries and its allies are currently raising output after slashing production to support prices during the pandemic-induced economic crash of 2020. Oil prices have risen sharply since the start of the year, as growth has boomed in advanced economies.

Yet the spread of the Delta coronavirus variant and global supply-chain problems are now dragging on a return to economic normality. This was seen clearly on Friday, when data showed that US nonfarm payrolls rose at their slowest in seven months in August as the jobs recovery stuttered.

Delta variant cases have caused particular concern in Asia, leading China to limit activity at some ports, further snarling up supply chains. Concerns have grown that these factors will dampen demand for oil.

Bjarne Schieldrop, chief commodities analyst at SEB, said Brent crude is likely to fall back to around $63 a barrel in 2022, as COVID variants hamper the demand recovery and OPEC+ and other oil producers increase supply.

WTI crude, the US benchmark, also fell as much as 1.4% on Monday before paring its losses, although trading was thinner due to the Labor Day holiday. It stood 0.66% lower at $68.83 in European trading.

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Binance boss CZ says thinking about crypto regulation takes up 80% of his time – leaving little for the day-to-day of the exchange

Changpeng Zhao
Changpeng Zhao founded Binance in 2017.
  • Binance's CEO has said he spends 80% or more of his time thinking about crypto regulation.
  • Changpeng Zhao told Bloomberg TV the crypto exchange is pivoting to become a financial services company.
  • The world's biggest crypto exchange is drawing scrutiny from regulators, who worry its products are highly risky.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Binance's CEO Changpeng Zhao said he spends at least 80% of his time thinking about regulation and next to none on the daily running of the crypto exchange, as official scrutiny of trading platforms intensifies.

Zhao, known in the crypto community as CZ, told Bloomberg TV that Binance is undergoing big changes to appease regulators, who are unhappy with some of the exchange's products and its compliance with local rules.

The chief executive and founder of Binance said he spends almost all of his time focusing on regulations, "probably 80% or more." Zhao added: "I'm not really involved in the day-to-day operations of the exchange."

Binance is pivoting from a technology innovator into a financial services company, he said in the interview Tuesday. "These types of pivots are very difficult to do, so I'm spending almost all my time on it," Zhao said.

Read more: 'Shark Tank' star Kevin O'Leary breaks down why he's ramping up his crypto allocation to 7% and investing heavily in DeFi - and explains why ether won't be the dominant token in financial services

Binance is facing intense regulatory pressure from financial watchdogs around the globe. It became the world's biggest crypto exchange in large part by allowing people to trade crypto derivatives using high levels of leverage, or borrowed money. Regulators are concerned about the dangers these products pose to consumers and potentially the wider economy.

In June, the UK's financial services watchdog banned Binance's UK arm Binance Markets, ordering it to stop all regulated activities in the country.

Zhao's focus on regulation is a sign of the changing times in the crypto world, which once prided itself on being rebellious and outside of government control.

The Binance CEO, who founded the exchange in 2017, said the company is now focused on hiring more staff to deal with regulation, centralizing its operations, and making sure products are compliant with local regulations.

On Wednesday, Binance said it has hired Greg Monahan, a former US government criminal investigator, to head up its anti-money laundering reporting division.

Zhao told Bloomberg that Binance spends a lot of time on protecting the exchange from hackers, saying security is the number-one issue for any cryptocurrency business. His comments came after hackers stole $600 million from crypto platform Poly Network, before returning much of the haul.

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More than $720 billion of stock buybacks will help the S&P surge to 4,700 within months, Goldman Sachs says

A stock trader claps at the end of trade at the New York Stock Exchange
US stocks have rebounded rapidly from March 2020's pandemic-induced crash.

US companies reopening the floodgates on stock buybacks will help the benchmark S&P 500 stock index jump 5% to 4,700 by the end of the year, Goldman Sachs analysts reckon.

Goldman analysts, led by David Kostin, think S&P 500 companies will buy back $726 billion of their own stock this year, they said in a note on Friday. That would be up sharply from 2020's figure, when the pandemic limited the practice.

"Strong corporate equity demand is one reason we forecast a 5% return to our S&P 500 year-end target of 4,700," Kostin and his team wrote. "From a flows perspective, the sharp rebound in buybacks supports our view that corporates will rank among the largest buyers of US equities this year."

Kostin added that the strength of buybacks supports current stock valuations, despite the fact that prices have reached their highest levels relative to company earnings in 40-odd years.

The S&P 500 closed at a record high of 4,468 on Friday. US stocks have bounced back remarkably strongly from last year's pandemic-induced crash, with the S&P rising more than 90% from lows seen in March 2020.

Read more: 2 leading economists used option prices to identify 20 years of stock market bubbles and build a 'bubble riding' trading strategy that beat buying and holding. Here's how it works.

In recent years, US companies have increasingly bought their own stock as a way to reward shareholders. Critics say the practice is short-sighted and overly benefits executives, but others argue it is a good use of excess cash.

Buybacks slowed sharply in 2020 as companies preserved capital due to the pandemic. S&P 500 share repurchases fell 29% year-on-year to $520 billion, according to S&P Dow Jones Indices.

But a rapid economic rebound, huge amounts of government stimulus, and a removal of repurchase restrictions have seen companies announce buybacks at a rapid rate in 2021. The information technology, financials, and communication services sectors have been the biggest buyers so far.

Goldman's analysts said clients were concerned that high levels of stock issuance could weigh on prices if not met by adequate demand. A particular worry is the end of IPO lock-ups, typically a 180-day period where insiders aren't allowed to sell stock.

Yet Goldman said: "Despite elevated equity issuance, corporates were net buyers of stocks in [the first half] and should remain so in the rest of 2021, particularly after accounting for [mergers and acquisitions]."

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More than $144 million of ether has been burned since major network upgrades hit ethereum last week

Ethereum ether coins network upgrades
The ethereum network runs the ether cryptocurrency, the second-biggest after bitcoin.
  • More than $140 million ether has been burned since a revamp of the ethereum fee system on August 5.
  • The EIP-1559 changes have excited many investors and helped push the ether price up 17%.
  • Yet the asset remains volatile, having lost half its value between May and June before rebounding.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

More than $144 million worth of ether has been burned since an overhaul of the fee system on the ethereum network went live on August 5.

As of Sunday, over 45,799 ether had been burned, according to tracking website Watch the Burn, at a rate of around 3.15 tokens per minute. The total amount burned was worth over $144 million at Sunday's price of $3,163.

The ethereum upgrade, codenamed EIP-1559, came into force on August 5 and significantly changed how fees work on the network.

It excited many investors because it introduced a "fee burn." Users now pay a base fee to have their transaction processed by miners, instead of the auction system that was formerly used.

Miners do not receive the base fee, otherwise they could artificially congest the network to keep the fee high. To solve this problem, it's burned instead.

Read more: How to mine ethereum: A 25-year-old who pays $42 a month in exchange for half an ether monthly explains how he does it - and an expert breaks down the effect of the blockchain's recent upgrade on miners

The fee burn mechanism limits the growth of the amount of ether in circulation. As of Sunday morning US time, 89,543 ether had been issued while 45,799 had been burned, amounting to a net reduction of around 34%, according to Watch the Burn.

Investors have reacted well to the changes, with the ether price jumping from around $2,700 when EIP-1559 went live to more than $3,160 on Sunday. Excitement about the changes had also helped drive up the price before the changes came into force, contributing towards ether's 65% rise over the last 30 days.

"A massive upgrade for ethereum should prove to be very bullish for the cryptocurrency's long-term outlook," Edward Moya, senior market analyst at trading platform Oanda, said in a note. "The pace at how tokens are minted has been lowered, which will help make it a little bit more scarce."

However, ether remains a wildly volatile asset whose future price movement is unpredictable. The token stood at more than $4,100 before losing more than half its value by late June.

Regulators have repeatedly warned that people who invest in cryptocurrencies are taking a big risk and should be prepared to lose all their money.

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Cryptocurrencies’ market cap has risen above $2 trillion for the first time since May as bitcoin rebounds

Photo illustration of visual representations of digital cryptocurrencies
Cryptocurrencies have been on a wild ride in 2021.

The market capitalization of the cryptocurrency universe has broken the $2 trillion barrier for the first time since May after a strong rebound in bitcoin and other tokens.

The total value of all cryptocurrencies reached $2.02 trillion on Saturday, according to Coinmarketcap. It hovered around that level until dipping slightly to $1.96 trillion on Sunday. Bitcoin's market cap stood at $863 billion, while ether's was $370 billion.

It's been a wild year for cryptocurrencies. They boomed in the first few months of 2021 as governments pumped stimulus into economies, but tumbled in May and June when Tesla boss Elon Musk criticized bitcoin's energy use and China cracked down on the tokens.

However, the market has gained a new lease of life in the last few weeks, with bitcoin rising from below $30,000 in July to trade at around $46,000 on Sunday.

Analysts have struggled to put a finger on exactly why the asset class has rebounded. Some have suggested that Elon Musk's comments have once again been a catalyst. He told a bitcoin conference in July that Tesla is likely to accept bitcoin as payment again once it is more eco-friendly.

Read more: The chief market analyst at charting-software firm TrendSpider shares the technical indicators that tell him bitcoin and ether are set to rise to all-time highs in the next 5 months

Institutions also appear to have remained interested, despite the price drops of the spring. Insider revealed in July that JPMorgan has given its financial advisors the green light to give all its wealth-management clients access to cryptocurrency funds.

So-called altcoins such as ether and cardano's native token ada have also rallied sharply in recent weeks. A major network upgrade has helped ether - the second-biggest cryptocurrency - climb from below $1,800 in July to $3,156 on Sunday.

Ada has surged in recent days, also due partly to excitement around upcoming network changes. The token traded at under $1.10 in July but stood at $2.10 on Sunday.

Cryptocurrencies have rebounded despite growing regulatory threats. Watchdogs around the world are increasingly concerned about crypto derivative exchanges such as Binance, and the US Securities and Exchange Commission has signaled that it wants increased oversight of the crypto landscape.

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