Traders Questioned : where has the Bear Gone

Investors are hopeful this week might be the best for equities this year, thanks to a positive trend since Monday. They're betting on the end of the central bank rate hike cycle. The momentum has been strong since Wednesday, although Apple is facing challenges and Sam Bankman-Fried might struggle.

Equity markets are on track for a positive week, with several major indexes like S&P500, CAC40, and DAX witnessing four consecutive sessions of gains, effectively erasing previous losses. The driving force behind this upward momentum is the growing belief among investors that monetary policy is now unlikely to tighten further. This conviction solidified after scrutinizing the recent decisions and comments from both the Fed and the Bank of England. Despite the central bankers' usual cautious language, optimistic investors focused on the pause in the tightening cycle, which sparked a wave of positivity in the market.   Investors responded robustly to the central banks' announcements, leading to significant gains in various indexes. For instance, the Nasdaq surged by 1.8% on Wednesday and another 1.7% on the following day. In Europe, the Stoxx Europe 600 saw a notable increase of 1.6%, the CAC40, Bel20, IBEX, and OMX Nordic, even managed to maintain advances above the symbolic 2% closing ceiling during the sessions. This positive market sentiment is likely to persist, at least until US inflation data for October is released on November 14, prompting investors to reassess the situation. Despite the recent turmoil, financiers remain optimistic, foreseeing continued economic growth that would enable corporate earnings to rise despite the prevailing high interest rates. This confidence is rooted in past trends. However, this outlook relies on two key assumptions: first, that these high rates won't cause significant collateral damage, particularly in real estate or the debt market, which could disrupt the process; and second, that prices won't overheat, potentially negating the Fed's efforts to soften the impact. The latter point is particularly contentious and often emphasized by the US central bank to justify maintaining high rates over an extended period. Corporate earnings releases, crucial for investor confidence, have generally met the required standards, preventing widespread panic, although there have been a few concerns. Notably, Apple, a significant player in Wall Street, faced a 3-4% decline in after-hours trading after releasing quarterly results that received a lukewarm reception. According to Andrew Uerkwitz from Jefferies, sales were slightly lower than expected, with strong iPhone performance in September offset by challenges in China due to competition from Huawei and regulatory issues. Disappointing forecasts for tablets and Macs further contributed to the drop, leading to an anticipated fall in the company's share price. In significant news, Sam Bankman-Fried was found guilty of fraud in the FTX trial, marking the largest cryptocurrency scandal so far. Under the cumulative sentencing system in the United States, he could face up to 110 years in prison. The sentencing is set for March, causing a buzz in the international press. Meanwhile, the focus remains on the monthly employment figures for the United States, a crucial indicator of American monetary policy, even amid the current positive economic climate. The Asia-Pacific region is without the Tokyo Stock Exchange this morning, which is closed for a public holiday. China is soaring in the wake of Western markets, with gains of 2.7% for the Hang Seng in Hong Kong. South Korea and Australia gained over 1%, while India was more measured but up 0.5%.

7 Basic Rules and Advantages of investing with the Empire Global Market

1. Lack of Due Diligence

Investing in the private markets is not much different than studying for a test, deciding which car you want to buy, or in what city you’d like to purchase your first home. Every investor has different interests, needs, goals, and exit plans for their money. Due diligence is always crucial when it comes to investing, but even more so when investing in the private markets. 

Firstly, private market investments lack the transparency of public markets, making it essential to conduct thorough research to mitigate risks. Investors must delve deep into the target company’s financial health, management team, market positioning, and growth prospects. Secondly, due diligence helps investors assess the legality and compliance of the investment, ensuring it aligns with regulatory requirements. This safeguards against potential legal troubles and reputational damage. And Thirdly, private market investments are illiquid and often require a long-term commitment. Proper due diligence aids in selecting investments that align with one’s risk tolerance, financial goals, and time horizon.

Where Empire Global Market Stands Out: At EGM, we offer a library of investment resources, original blogs, and company news for members to thoroughly conduct their due diligence before making an investment.Empire Global Market  always has skin in the game–we invest in the company’s that are on our platform, so our investments perform well when our member’s investments perform well.

2. High Minimums and Fees

High minimums can present a significant roadblock to first-time private investors. Unlike public market investments, for which there are nearly limitless avenues to invest through, the private markets are accessible to accredited investors in a more limited way. Consequently, private market investment platforms can place large investment minimums on their members, which can range from $10,000 to $100,000, and even higher in some instances. 

High minimums exclude many potential investors, limiting access to investment opportunities and potentially concentrating wealth among a select few; this exclusionary practice goes against the principles of democratizing finance and promoting financial inclusion.

Further, exorbitant fees can erode investment returns over time. Even seemingly small percentage-based fees can accumulate into substantial amounts, substantially diminishing the compounding effect of investments. Investors must prioritize cost efficiency to maximize their long-term gains.

Where Empire Global Market Stands Out: the EGM offers $1,000 investment minimums across its portfolio companies; a competitive minimum that is 95% lower than investment platforms with a $50,000 minimum on investments. Further, unlike our competitors, Empire Global Market doesn’t have brokerage fees, management fees, or administrative fees.

3. Over-concentration

The opposite of over-concentration is diversification, and Warren Buffet said it best when he noted that “Diversification is protection against ignorance.”

Diversification of private market investments is paramount for many reasons. Diversification helps spread risk across different asset classes, industries, and geographical regions. This risk mitigation strategy reduces the impact of poor performance in one area of the portfolio, helping to safeguard capital and maintain overall stability. 

Further, a diverse investment strategy can strengthen long-term returns. When one asset class is underperforming, another may excel, smoothing out overall returns and potentially increasing the portfolio’s risk-adjusted performance. A diverse strategy also instills discipline into private market investors, a skill that carries limitless benefits.

Where Empire Global Market Out: With over 40 diverse portfolio company offering, EMPIRE GLOBAL MARKET offers its members some of the top performing private companies in a number of top-tier sectors, including Artificial Intelligence, Digital Assets, Cybersecurity, Space Exploration, Software as a Service, and much more, assisting our members in ensuring their private market portfolio is diverse.

4. Not Staying Informed on Private Market Trends

When it comes to private market investing, education is key. Unlike public markets portfolios–many of which follow a “set it and forget it” type of investment cycle–it’s crucial that private market investors keep up on the latest news and fundraising cycles that affect their individual investments and targeted sectors. Reviewing recent news and other forms of private market education is pivotal for investors as it provides insights into emerging trends, allowing investors to identify lucrative opportunities and potential risks in a rapidly evolving landscape. Further, real-time updates on funding rounds, acquisitions, and market shifts enable investors to make timely decisions, optimizing their entry and exit points. 

Where Empire Global Market Out: At Empire Global Market , we work tirelessly to provide our members with the latest portfolio company news, market trends, and educational updates on their investments through a library of originally written articles, interviews, investment summaries and other analysis–all for free.

5. Overestimating Returns

Private market investors must work to not overestimate the returns of their holdings for three important reasons: Firstly, with private market investments typically lacking the liquidity of public markets, private market investors must understand that selling off their investments quickly can be difficult, as illiquidity can require that investments be held for extended periods of time. Secondly, market volatility can affect private investments in a greater way than public holdings, and thirdly, private market investments can be subject to unforeseen challenges, such as delays in achieving exit strategies or unexpected operational difficulties within the invested companies.

When entering the private market, individuals must first understand that they may need to hold their investments for longer than their public holdings. 

Where Empire Global Market Out: By providing the latest in news and updates surrounding our portfolio companies, the EGM works to keep our members informed, this includes fundraising rounds for our portfolio companies and the latest in valuation and potential IPO plans.

6. Disregarding a Company’s Exit Strategy

Just as crucial as staying up to date on the latest news surrounding an individual’s private investment portfolio is understanding a company’s exit strategy before investing in the organization. Unlike investing in the public market–which revolves around buying portions of a company that is already publicly-traded–a private market investor is banking on a company holding a liquidity event, which could include a merger, initial public offering, or other events. Understanding a company’s exit strategy provides an investor with clarity on the potential timeline for realizing returns on the investment.

Different exit strategies, such as IPOs, acquisitions, or mergers, can have varying time horizons, and aligning this with an investor’s financial goals and timeline is crucial. Every company’s exit strategy is different, but by understanding a given strategy, investors can gauge the alignment between their own investment objectives and the company’s plans. If an investor seeks liquidity in the short term, but the company’s exit strategy is long-term, it may lead to a mismatch in expectations.

Where Empire Global Market Out: At Empire , we want our portfolio companies to perform well, and meet their exit strategies. We invest alongside our members, meaning that with skin in the game, it behooves us to understand the exit strategies of our portfolio companies, meaning that we provide updates, news, and other useful information to our members as we receive it.

7. Relying Solely on Past Performance

Private market investors should exercise caution and avoid relying solely on past performance when making investment decisions. Past performance is not always indicative of future results, especially in dynamic and evolving markets. Companies can face changing market conditions, shifts in management, or unforeseen events that may impact their future performance.

Relying solely on past performance can lead to a biased investment approach, overlooking emerging opportunities or undervaluing companies with strong growth potential but limited historical data. It may also result in overvaluing companies that have experienced temporary success without considering long-term sustainability.
Where Empire Global Market Out: Our experienced team never stops working to bring trailblazing private companies to our platform. We don’t just analyze past performance, as we tediously gauge and measure how our portfolio companies could perform in the future, always offering our members formidable companies with a promising exit strategy and forward-looking agenda.

Join us today by visiting our website @ www.empireglobalmarket.com

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Stocks

Stocks waver as S&P 500 hugs flatline

US stocks fell again in afternoon trading on Tuesday as investors weighed fresh consumer confidence data ahead of the Federal Reserve's upcoming policy decision on Wednesday.

The benchmark S&P 500 (^GSPC) traded flat while the Dow Jones Industrial Average (^DJI) declined 0.1%. The tech-heavy Nasdaq Composite (^IXIC) led the afternoon's decline, down around 0.2%. Tech giant Apple is set to report quarterly results on Thursday.

The 10-year Treasury yield (^TNX) slid about 1 basis point to trade near 4.86%. So far this year, yields have rallied with the 10-year climbing 10 basis points or more for six consecutive months, the the longest streak on record.

2 days ago

Alexandra Canal

Pinterest, Nvidia, Pfizer: Stocks trending in afternoon trading

Pinterest (PINS): The stock surged nearly 20% on Tuesday after the company reported third quarter results that topped analyst estimates. Pinterest reported revenue of $763.2 million, higher than the estimated $744.1 million, amid a surge in monthly active users, which came in at 482 million versus the 473.46 million that was expected.

Nvidia (NVDA): Shares fell more than 2% after the Wall Street Journal reported the chipmaker could lose out on up to $5 billion in orders to China after the US imposed control restrictions on advanced AI chip exports.

Pfizer (PFE): Shares slipped more than 1% after the pharmaceutical giant posted its first quarterly loss since 2019. Pfizer incurred a $5.6 billion non-cash write-off in the third quarter due to declining demand for its COVID-19 products as pandemic concerns ease.

Caterpillar (CAT): Shares fell 6% after the machine maker's third quarter report signaled a waning in demand, despite easily beating earnings expectations. The company said it expects fourth quarter operating margin to be less than the previous quarter.

Jetblue (JBLU), Spirit Airlines (SAVE): JetBlue saw shares fall more than 10% after the airliner posted a wider-than-expected loss in the third quarter, in addition to reducing its full-year guidance. The disappointing results come the same day the antitrust trial of JetBlue's contested $3.8 billion acquisition of Spirit Airlines kicked off. Shares of Spirit fell about 13%.