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NZ dollar jumps on inflation expectations

The New Zealand dollar has posted strong gains on Thursday. NZD/USD is currently trading at 0.7041, up 0.60% on the day. Inflation Expectations accelerates…

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This article was originally published by Market Pulse

The New Zealand dollar has posted strong gains on Thursday. NZD/USD is currently trading at 0.7041, up 0.60% on the day.

Inflation Expectations accelerates

New Zealand release inflation expectations and the indicator climbed for a sixth successive session. The indicator is carefully monitored since inflation expectations can manifest into actual inflation. The third-quarter release came in at 2.96%, up from 2.27%. The strong reading provided a boost for the New Zealand dollar and has strengthened the likelihood of the RBNZ raising rates at its policy meeting next week. The RBNZ was one of the first central banks to raise rates since the pandemic started, with a 25-bps hike in October. The central bank plans a series of hikes going into 2022, and the main question facing the markets is will the bank raise rates by 25 bps or show an aggressive hand with a 50-bps jump.

In the US, inflation continues to climb, but higher prices didn’t put a damper on consumer spending, as retail sales climbed 1.7% in October, up from 0.7% beforehand. Core retail sales showed an identical gain, up from 0.8%. There is a growing concern in the markets that the Fed will have to respond to the surge in inflation, as the argument that inflation is transient is looking out of touch with the realities on the ground. If the Fed trims its purchases, we could see some volatility in the financial markets.

The White House is feeling the pain of inflation, as US voters could punish the Democrats in the 2022 mid-term election over higher prices. President Joe Biden also has to make a key decision shortly as to who will head the Federal Reserve. Jerome Powell and Fed member Lael Brainard are the favorites, and Brainard is considered more dovish, which could mean that interest rates stay lower for a longer period, which would be bullish for equities and bearish for the US dollar.

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NZD/USD Technical

  • There is resistance at 0.7146 and 0.7252
  • 0.6966 is a weak support line. Below, there is support at 0.6892

 









Author: Kenny Fisher

Economics

MicroVision Is Only a Speculative Play After Another Torrid Quarter

Autonomous-driving tech company MicroVision (NASDAQ:MVIS) had been a darling of the Reddit trading crowd. However, the enthusiasm surrounding the stock…

Autonomous-driving tech company MicroVision (NASDAQ:MVIS) had been a darling of the Reddit trading crowd. However, the enthusiasm surrounding the stock was short-lived as MVIS stock has shed more than 45% of its value since May this year.

MVIS stock: Concept image of a self-driving car lidar system.Source: temp-64GTX/Shutterstock.com

Most recently, the stock took a massive hit from posting disappointing earnings around the end of October. Moreover, significant revenue is still years away, and with the rising competition in the sector, MVIS stock is more of a speculative play.

MicroVision has been in the game for a significant time, and the journey hasn’t been easy. It has incurred colossal losses due to the insufficient demand for its core products. However, the consensus is that the development of automotive LiDAR sensors can effectively turn things around for the company. At this stage, though, MicroVision is a long way from achieving its objectives and achieving profitability.

Another Tough Quarter

MicroVision recently reported a whopping net loss of $9.4 million, with a negative operating cash flow of $10 million at the end of the third quarter. Moreover, it reported revenues of $718,000, a 12% improvement from the prior-year period.

The company continues to burn through a massive amount of cash without a source of incoming revenues. Investors are hopeful that it becomes the leading LiDAR systems provider for autonomous vehicles, but things look dreary with no firm deals in place and plenty of competition.

It appears that the path for significant revenue gains and profits is incredibly murky. CEO Sumit Sharma indicated that the company wouldn’t generate substantial sales for at least the next four years. Surprisingly, during the quarter, he remarked that requesting additional information about the company was a major win.

Nevertheless, despite the weak operating performance, the management is ecstatic about the future. Mr. Sharma states that, “No lidar company has yet secured an OEM deal that is recorded on its financial statements as meaningful backlog. I believe MicroVision is ahead of all our
competitors in several key areas.” Furthermore, he also believes that the next 16 months will be critical, as several original equipment manufacturers (OEMs) may partner with the company is launching their new EV models.

Outlook

Analysts estimate that the MicroVision could generate over $70 million by 2030. Much of its sales growth will be led by automotive LiDAR sales. The cost of sales will be linked to the sale of the company’s long-range LiDAR (LRL) sensors. Moreover, as production starts to ramp up next year after validation testing, gross margins may turn positive.

Moreover, as the company achieves scale, its gross margins will stabilize over 50% by 2026.  However, operational expenses are likely to outpace revenues through 2027 to support production ramp-up. Additionally, the company will be generating profits after 2029.

Hence, it’s a long wait before MicroVision will be in the green regarding profitability. Its competition, including Luminar Technologies (NASDAQ:LAZR) and Velodyne Lidar (NASDAQ:VLDR), are also in their early stages of production — but could pose a serious threat down the road. Therefore, there are a lot of ifs and buts at this stage which limits MVIS stock’s attractiveness.

Bottomline On MVIS Stock

MicroVision hopes to establish a strong presence in the promising automotive LiDAR market. Though, as its recent results suggest, it is still years away from achieving its goals. Those who believe in its long-term case should wait for a better entry point, as its currently trading at a price-to-sales ratio of over 470 times. However, at this point, it’s more of a speculative play that is ideal for short-term gains.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.  

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The post MicroVision Is Only a Speculative Play After Another Torrid Quarter appeared first on InvestorPlace.

Author: Muslim Farooque

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Economics

Euro rebounds as inflation climbs

The euro has rebounded in the Tuesday session. In North American trade, EUR/USD is trading at 1.1365, up 065% on the day. Eurozone inflation hits record…

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The euro has rebounded in the Tuesday session. In North American trade, EUR/USD is trading at 1.1365, up 065% on the day.

Eurozone inflation hits record high

Eurozone inflation surged to a new high in November. On an annualized basis, inflation is projected to have climbed to 4.9%, up from 4.1% in October and higher than expected. Core CPI showed a similar trend, rising from 2.0% in October to 2.3% in November. Energy prices, which jumped 27%, were the key driver of the rise in inflation.

The headline reading is more than double the ECB’s inflation target of 2 per cent, which raises further doubts in the narrative championed by ECB President Christine Lagarde that high inflation is being driven by temporary factors and will ease in the coming months. Some ECB Governing Council members have expressed concern as inflation continues to accelerate, and this should make for an interesting policy meeting on December 16th. The bank will likely upwardly revise its inflation projections at the meeting, and policy makers may signal their plans for the emergency pandemic program (PEPP). Unlike the BoE and the Fed, the ECB appears far away from any rate moves, but may provide some signals at the meeting about scaling back QE.

The Omicron variant of Covid-19 has caused plenty of volatility on global financial markets, and investors are looking to Fed Chair Jerome Powell for some insights. Powell will speak before US senators later in the day, and his prepared testimony stated that Omicron could hurt the US employment market and exacerbate supply chain disruptions. Powell reiterated that he expects inflation to ease sometime in 2022, but admitted that inflation will remain well above the Fed’s target of 2 per cent. With inflation current galloping at a worrying clip of 6 per cent, Powell may find that lawmakers are skeptical about his assurances that inflation is transitory.

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 EUR/USD Technical

  • EUR/USD has support at 1.1229. This is followed by support at 1.1135
  • EUR/USD is putting strong pressure on 1.1373. Above, there is resistance at 1.1423




Author: Kenny Fisher

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Economics

Hot Gold Stocks To Add To Your Watchlist In December 2021

Trading gold stocks next month? Check these three out Recently, gold stocks…
The post Hot Gold Stocks To Add To Your Watchlist In December 2021 appeared…

Trading gold stocks next month? Check these three out

Recently, gold stocks have been some of the most fascinating assets to keep an eye on in the market. Fears of inflation and an increase in pandemic infections as a result of new virus variants have caused a lot of volatility in gold. The new Omicron variant of the virus has created a new level of volatility as not many know about its attributes yet. Because of the unique position that gold plays in the economy, no matter what sort of trader you are, there are always several possibilities to earn in the gold market.

Gold, being one of the oldest forms of currency, has cemented its position in the financial world. As a result, the gold market attracts a wide range of investors. There are several methods to invest in gold, including actual gold, options, futures, and stocks. Today, though, we will just look at gold stocks.

In the past, you’ve seen how news may affect the price of gold stocks. This was especially true in 2020, a year with more news than ever before. Mining resources increased to unprecedented levels as a result of the epidemic. For example, the price of gold surpassed $2,000, setting a new high for the precious metal. Keeping up with global news, corporate news, and industry news may all be beneficial when investing in gold stocks.

Top Gold Stocks To Watch

Harmony Gold Mining Company Limited (NYSE: HMY)

On November 29th, Harmony Gold Mining Company Limited had a 4.66 percent boost in its stock price. In South Africa and Papua New Guinea, this company looks for, extracts, and processes gold. The company also looks for silver, copper, and uranium in addition to gold. In South Africa, Harmony operates nine subsurface operations and many surface treatment activities.

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The company’s earnings and revenues increased year over year in fiscal year 2021. This occurred as a result of rising metal costs and the company’s rapid growth. Given that Harmony hasn’t issued any updates in quite some time, it’ll be interesting to see what they have in store for their shareholders before the year is through.

HMY’s stock price moves up and down in tandem with the price of gold. As a result, when gold prices rise sharply, HMY stock often follows suit. When gold, on the other hand, falls sharply, the HMY stock normally falls with it. Harmony is, of course, influenced by its own performance. Higher volumes are common when the firm provides quarterly results and mine updates. Noting this info, will HMY be on your list of gold stocks to watch in December?

Royal Gold Inc. (NASDAQ: RGLD)

Royal Gold Inc. is a gold stock based on royalties and metal streams that it purchases and administers. This is done for stream or royalty interests by the corporation. Gold, silver, copper, zinc, nickel, lead, and cobalt are Royal Gold’s target minerals. Currently, the corporation operates 189 sites across five continents. Royal Gold manages 41 mines and 17 projects in various stages of development.

On November 16th, the company announced its 21st consecutive annual increase in its common stock dividend to $1.40 per share for 2022. This was in total a 17% increase over 2021’s dividend. 2021’s dividend price was at $1.20 per share. The first quarterly dividend at this increased rate is payable on January 21st, 2022, to shareholders on record as of January 7th, 2020 at the close.

The CEO and President of the company, Bill Heissenbuttel said, “Paying a growing and sustainable dividend is a core strategic objective for Royal Gold. Recent record revenue from strong portfolio performance combined with further revenue growth from our newest producing assets give us confidence in the outlook for our business.” The company has paid $680 million in dividends since 2000. Noting this new update, will RGLD make your gold stock watchlist?

Hecla Mining Company (NYSE: HL)

Hecla Mining Corp. buys, finds, develops, and manufactures precious and base metal assets. It sells raw gold and silver bullion bars, as well as lead, zinc, and bulk concentrates. The corporation holds a 100 percent stake in the Greens Creek, Lucky Friday, Casa Berardi, and San Sebastian mines. It also has a stake in a number of other assets throughout North America.

On November 4th, released its third-quarter 2021 results. Hecla reported $193.6 million in revenue this quarter, which was the same as the previous quarter. It also earned $42.7 million in cash from operating activities and $26.9 million in asset additions. Hecla announced a quarterly exploration spend of $13.7 million, a record.

President and CEO of Hecla, Phillips S. Baker Jr. said, “This operational performance allowed us to enhance our silver-linked dividend for the second time this year and return about 20% of our free cash flow to shareholders while having our largest exploration program in the company’s history.” HL stock is up 0.36% on November 29th. Noting this info, will HL stock be on your watchlist as we move into December?

Best Gold Stocks For Your Watchlist?

Choosing which mining stocks and gold assets to invest in might be difficult. Developing an investing strategy is an effective way to mitigate some of the risks. When investing, keeping up with the latest news, whether it’s company-specific, global, or sector-specific, is quite useful. Examining charts, volume, and other statistics might be useful as well. So, which gold mining stocks will you be watching before the end of 2021?

The post Hot Gold Stocks To Add To Your Watchlist In December 2021 appeared first on Gold Stocks to Buy, Picks, News and Information | GoldStocks.com.








Author: Jon Phillip

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