Why Airbnb Stock Jumped This Week (3 min read)
Airbnb stocks slipped about 5% on Friday, but throughout the week it was up more than 20% and year to date it has climbed nearly 60%. The company recently posted better-than-expected earnings, but more importantly, it continued to demonstrate robust growth amid challenging economic times. Over the last three years, its annual revenue grew by 75% while maintaining a solid profit growth. The number of listings on its platform also rose rapidly last year, which investors expect to carry over to the current quarter as travel demand picks up.
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DraftKings stock surges after sports-betting company boosts outlook (1 min read)
Shares of DraftKings soared more than 15% on Friday as the company reported a stellar Q4 and raised its outlook for 2023. Their revenue jumped 81% last quarter compared to the same time a year ago, while keeping its loss lower than analysts’ expectations. DraftKings attributed the success to continued acquisition and engagement in existing states, and the launches of its Sportsbook and iGaming products in additional jurisdictions. The company also boosted its 2023 revenue guidance and now expects year-over-year growth of 27% to 36%.
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Goldman Sachs, BofA expect three more U.S. rate hikes this year (2 min read)
Goldman Sachs and Bank of America lifted their rate hike estimates after recent US data showed persistent inflation and a resilient labor market. Both banks previously forecast only two additional hikes of 0.25% from the Fed in March and May. They now expect another 0.25% hike from the Fed in June, bringing the terminal rate to a range of 5.25% - 5.55%. The money markets are also currently pricing in a similar peak rate of 5.3% by July.
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Why there is no such thing as a 'no landing' scenario for the economy (4 min read)
Investors are contemplating a "no landing" scenario as the US economy continues to outperform expectations. This newly-coined scenario considers a situation in which inflation doesn't cool while economic growth continues, even as interest rates remain elevated. Although some investors seem to be betting on this outcome, at least one economist believes this narrative is nonsensical as the economy is cyclical and landing after a peak is inevitable.
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How to Tell If an ETF Is Overvalued (5 min read)
Although it is not foolproof, there are methods to determine whether an ETF is overvalued. Investors can look at the value of the ETF itself or the valuation of its underlying holdings. For the ETF’s valuations, investors can analyze the NAV, market price, and the intraday indicative value. For the valuation of the ETF’s underlying holdings, investors can use metrics similar to stock analysis such as P/E and P/B ratios, and compare it to a comparable benchmark. More details of each valuation method are available in the article.
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Billionaire George Soros Bets on Asset Manager Cathie Wood (3 min read)
According to a recent regulatory filing, legendary investor George Soros acquired call options on the ARK Innovation ETF (ARKK) in Q4. The call options gave him the right to buy 500,000 shares of ARKK, which were valued at $15.26 million at the time. So far this year, ARKK has rebounded around 31% after suffering a major sell-off last year, and Soros’s call option shares are currently valued at $20.4 million. Soros, believing the price of ARKK will rise, reinforces Cathie Wood’s strategy as he mostly bets against investments.
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That's it for today! You can reply to this email if you have any comments or feedback.
Thanks,
Thomas
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