Papertrading| Last Call: one week Left to join the Papertrading Competition!
As the 2024 Papertrading Challenge continues, we're eager to share the current standings on the Australian stock papertrading leaderboard.
Without further ado, congratulations to the top 10 mooers who topped the leaderboard!
📑Thrilling trading moments from mooers
1. Event-Driven Trading Opportunities: ASTS
Last week, one of the top three traders by returns profited by buying calls on $AST SpaceMobile(ASTS.US$. It recently announced that it has completed the construction and testing of its first five Bluebird communications satellites. The next step for the company is to ship these satellites to Cape Canaveral in August, with a planned launch by SpaceX into orbit in September. This announcement led to a 47% increase in ASTS stock last week.
Once in orbit, AST SpaceMobile claims that the satellites will provide "U.S. nationwide non-continuous service with over 5,600 cells in premium low-band spectrum," with plans to increase processing bandwidth tenfold over time. Initially starting small, the company aims to build a global constellation of 168 satellites to provide direct cellphone-to-cellphone service worldwide, eliminating the need for cell towers. AST's ultimate goal, as outlined before its 2021 IPO, is to offer this service to up to 5 billion mobile subscribers, capturing a significant share of the "$1 trillion global mobile wireless services market."
However, not all news is positive. Constructing a 168-satellite constellation is expensive, and AST currently has only $210 million on its balance sheet. AST will need to ramp up its operations and revenue quickly to sustain its business. Investors should mark their calendars for August 14, when AST will hold a conference call to update on its cash reserves. Given that the stock has already surged over 200% this year, there is also a risk of profit-taking.
2. Opportunities in Small-Cap Stocks
Investors have shown interest in small-cap stocks, such as those in the $iShares Russell 2000 ETF(IWM.US$. This sector rotation was triggered by the release of CPI inflation data, which raised expectations for a rate cut. Small-cap stocks, with their smaller market capitalizations, can be easily influenced by capital flows.
Another factor is the election; policy risks generally have less impact on small-cap stocks, most of which are domestic U.S. companies. Except for those reliant on imports, other impacts are relatively minor.
However, the risk for small-cap stocks lies in potential profit pressures that may emerge during this earnings season. Market expectations are extremely high, and macroeconomic pressures are more severe than they appear. While the Russell 2000 has high short-term elasticity in a rate-cut environment, the limited scope of rate cuts necessitates caution. Poor earnings performance without fundamental support cannot sustain long-term gains.
📣Don't you know how to find an opportunity?
The FOMC meeting on July 31 is a key focus this week, as is the non-farm payroll report on Friday. The main question remains when rate cuts will begin. The July meeting will likely affirm recent inflation progress and pave the way for a potential rate cut at the next Fed meeting, possibly on September 20. If rate cut signals are released, it would generally be positive news for the market.
In terms of individual stocks, aside from $Netflix(NFLX.US$, $Tesla(TSLA.US$, and $Alphabet-C(GOOG.US$, other major companies are set to release their earnings. Whether these will result in market declines or support U.S. equities is still uncertain. There is a higher risk for tech stocks' earnings reports this quarter. Even if current performance is solid, the continued expansion of AI capital expenditures and a marginal slowdown in earnings, coupled with high expectations and valuations, may prolong the risks for tech stocks. In a volatile market, Bitcoin remains a viable investment option, and advanced investors can also consider ETFs such as $Invesco QQQ Trust(QQQ.US$ or options strategies.
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Rewards：
100 points: any participating user with at least 1 post during the event period.
1000 points: the top 10 high-quality users with their trading insights, including at least 1 P/L image and a minimum of 10 words in this page.
AUD50 cash coupon: for the top writer of unique, on-topic, and in-depth trading analyses (including P/L records) throughout the competition.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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