What to watch
Coupa Software: California-based Coupa provides software that helps large companies maintain oversight of how money and resources are spent within their businesses. The firm’s share price has jumped 48% year-to-date and is up almost 80% over the past 12 months, as cloud-based software providers have become an investor favourite with large swathes of the corporate workforce working remotely. Coupa reports its latest set of quarterly earnings on Monday, where analysts are expecting an earnings-per-share figure of $0.07, in line with their expectations three months ago. Currently, 13 analysts rate the stock as a buy or overweight, seven as a hold, and two as an underweight or sell.
Thor Industries: Recreational vehicle firm Thor sells RVs and towable camper trailers, including the famous Airstream brand. The company’s share price has soared more than 30% in 2020 so far, as investors anticipate that the coronavirus pandemic will cause more holidaymakers to look to domestic travel options, such as camping trips, rather than spending on international travel. Thor reports its latest set of quarterly earnings on Monday, where investors will be watching for details of the company reopening its US assembly lines, and a look into whether consumer demand has delivered the growth investors are anticipating. That said, analyst expectations for profit in the quarter being reported have sunk dramatically over the past three months, and the share price spike has caused some analysts to remove their buy rating on the stock.
What the rebound in longer-term US Treasury yields means
Optimism around the economic recovery pushed the yield on the 10-year US Treasury to its highest level since mid-March, as investors moved out of the safe-haven government debt and back into corporate bonds – including in sectors of the markets that have been under the most pressure. Remember, when bond prices fall, yields rise. In a Friday note, Traders at T. Rowe Price highlighted that the volume of deals in the investment grade corporate bond market was almost double what they had been expecting, with most new debt issuance being met with solid demand. The rebound in Treasury yields is the bond market’s way of saying that the worst is over for the US economy and means that the price of borrowing will once again begin to climb. That is good news for financial stocks, which suffer from compressed margins when yields are stuck at rock bottom levels. All eyes will now be on the Federal Reserve, and whether the central bank plans to maintain zero rates for the long-term as it waits out the risk of a second wave of the virus, or if it plans to take last week’s jobs numbers and other data points as a reason to begin increasing rates again.
Crypto corner: Ethereum transaction fees surpass Bitcoin for first time since March
Over the weekend Ethereum transaction fees – a measure of how much currency is being mined – surpassed Bitcoin for only the second time this year.
Data from Glassnode showed Ethereum fees breaking above Bitcoin fees, with experts pointing out this could be a bullish sign for Ethereum.
According to a report on Bitcoinist, the founder of Mythos Capital, Ryan Sean Adams, recently noted that the price of Ethereum has been closely correlated with the transaction fees Ethereum users pay over the past four years.
Ethereum is currently trading at $241, its highest level since March.
All data, figures & charts are valid as of 08/06/2020. All trading carries risk. Only risk capital you can afford to lose.
This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilizing publicly-available information.
