In today’s headlines, Twitter shares slump after a former exec alleged the company lied about bots and spam accounts, big banks bet on buy now, pay later, and ETFs record further inflow growth. Meanwhile, Morgan Stanley analysts see opportunities in the EV supply chain and Cathie Wood snaps up Zoom stocks.
Ex-Twitter exec blows whistle
The Twitter [TWTR] takeover saga took another turn on Tuesday as its former security chief Peiter Zatko (pictured) alleged that the company had lied to regulators about bots, spam accounts and safety. Meanwhile, as the bot debate heats up, Twitter announced plans to merge the two teams responsible for cutting misinformation and spam accounts. Though Twitter closed Tuesday down 7.3%, the new team’s leader told employees the move will mean they are “no longer operating in silos”.
Big banks bet on BNPL
Buy now, pay later (BNPL) providers like Affirm [AFRM] have been criticised for encouraging people to get into debt, but it’s becoming increasingly popular among Gen Z due to its convenience. Traditional lenders, including Natwest [NWG.L] and HSBC [HSBA.L], are launching new ways for customers to spread the cost of payments. “Even though banks are just getting started, they are well positioned to scale fast,” Dilnisin Bayel, credit lead at Accenture, told Bloomberg.
Record growth net flows
July saw the largest swing from value ETFs into growth funds, according to data aggregated by research firm Strategas. The Wall Street Journal noted that net flows were $9.3bn during the month. This inflow growth has continued in August with the two weeks up to last Wednesday seeing a net $11.7bn poured into ETFs and mutual funds. The run could continue — JPMorgan believes the growth rally has further to go.
Smart EV supply chain opportunities
Innovation in the electric and autonomous vehicle space is going to drive demand for smart features. “The increasing content value of auto electronics per car, from autonomous driving functions to EV features, will make the smart EV industry a new breeding ground for the tech supply chain,” wrote Morgan Stanley analysts 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] lowered its full-year sales guidance from an upper level of $4.55bn down to $4.4bn on Monday as post-pandemic demand for video conferencing falters. Citi analyst Tyler Radke thinks the new guidance could be “too optimistic”, according to a note seen by Barron’s. However, this hasn’t stopped Cathie Wood from snapping up 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 that some people will put off buying new athleisure goods. JD Sports [JD.L] isn’t immune to this and has seen its share price fall 18% over the past month. Nonetheless, analysts are generally bullish on the retailer’s fortunes and believe the company can outperform its peers. Regis Schultz will take up the position of CEO next month.
Health and wellness stocks tumble
The pandemic had a profound positive impact on the health and wellness industry as people found themselves locked down and wanting to keep fit and active. Sales of sportswear rocketed as did diet and nutritional supplements. But the share prices of Nike [NKE], Lululemon [LULU] and Herbalife [HLF] have all struggled this year. BNP Paribas analysts believe there’s “increased uncertainty that [Nike’s] fiscal 2025 targets can be met over time”.
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