IIn today’s headlines, Twitter shares plummet after a former executive alleged the company lied about bots and spam accounts, big banks bet on buy now, pay more later, and ETFs see further inflow growth. Meanwhile, Morgan Stanley analysts see opportunities in the electric vehicle supply chain and Cathie Wood grabs Zoom shares.
Ex-Twitter exec whistles
Twitter [TWTR] The takeover saga took another twist on Tuesday as its former security chief Peiter Zatko (pictured) alleged the company lied to regulators about bots, spam accounts and security. Meanwhile, as the bot debate heats up, Twitter has announced plans to merge the two teams tasked with shutting down misinformation and spam accounts. Although Twitter closed down 7.3% on Tuesday, the new team leader told employees the move would mean they “no longer operate in silos.”
The big banks bet on the BNPL
Buy Now, Pay Later (BNPL) like Affirm [AFRM] have been criticized for encouraging people to go into debt, but they are becoming increasingly popular among Gen Z due to their convenience. Traditional lenders, including Natwest [NWG.L] and HSBC [HSBA.L], are launching new ways for customers to spread the cost of payments. “Even if banks are just getting started, they are well positioned to scale quickly,” said Dilnisin Bayel, head of credit at Accenture. Bloomberg.
Record growth in net flows
July saw the biggest shift from value ETFs to growth funds, according to data aggregated by research firm Strategas. The Wall Street Journal noted that net flows were $9.3 billion during the month. This growth in inflows continued into August, with the two weeks to last Wednesday seeing $11.7 billion net inflows into ETFs and mutual funds. The race could continue – JPMorgan believes that the growth recovery must go even further.
Smart Electric Vehicle Supply Chain Opportunities
Innovation in electric and autonomous vehicles will drive demand for smart features. “The growing value of automotive electronics content by car, from self-driving functions to electric vehicle functionality, will make the smart electric vehicle industry a new breeding ground for the technology supply chain,” the analysts wrote. of Morgan Stanley in a note seen by CNBC. Their top picks include Chroma [2360.TW]Delta Electronics [2308.TW] and Sunny Optical [2382.HK].
Cathie Wood buys Zoom
Zoom [ZM] cut its full-year sales forecast from a high of $4.55 billion to $4.4 billion on Monday, as post-pandemic demand for video conferencing falters. Citi analyst Tyler Radke thinks the new guidance may be “too optimistic,” according to a memo seen by Barrons. However, that didn’t stop Cathie Wood from taking over the stock. ARK Innovation [ARKK] added 713,062 shares and ARK Next Generation Internet [ARKW] purchased 126,239 shares.
Inflation dampens demand at JD Sports
Rising inflation putting pressure on consumer spending means some people will put off buying new sporting goods. JD Sports [JD.L] is not immune to this and has seen its share price drop 18% in the past month. Still, analysts are generally optimistic about the retailer’s fortunes and believe the company can outperform its peers. Regis Schultz will take over as CEO next month.
Health and wellness stocks fall
The pandemic had a profound positive impact on the health and wellness industry as people found themselves locked down and wanting to stay fit and active. Sportswear sales have exploded, as have dietary and nutritional supplements. But Nike’s stock price [NKE]lululemon [LULU] and Herbalife [HLF] have all struggled this year. BNP Paribas analysts believe that there is “increased uncertainty which [Nike’s] FY2025 goals can be achieved over time.”
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