Before floating on the Nasdaq Stock Exchange on Thursday, Robinhood priced shares at the low end of the $38 to $42 range. The trading platform sold 52.4 million shares, generating a profit of just under $2 billion. The company’s co-founders Vlad Tenev and Baiju Bhatt each sold around $50 million worth of stock.
Robinhood, which claims its mission is to “democratise” investing, has become a central gateway to the markets for first-time, and often young, investors. The trading platform offers equity, cryptocurrency and options trading, and cash management accounts. During the pandemic and the meme stock craze, the platform saw record trading levels.
Robinhood has an estimated 22.5 million funded accounts as of the second quarter of the year. In the first quarter of 2021, this figure stood at 18 million. The trading platform was last valued in September in the private markets at £11.7 billion. This latest valuation, following its IPO, marks a significant milestone for the company.
In its updated prospectus, Robinhood estimated revenue of $546 million to $574 million in the second quarter, a substantial increase from $244 million in the second quarter of 2020. Revenue soared 309% in the first quarter to $522 million, up from $128 million the year before.
Exceeding analysts’ expectations, Barclays has posted a quarterly attributable profit of £2.1 billion, up from £90 million for the second quarter of 2020. According to Refinitiv data, analysts had predicted a net reported income of £1.7 billion for the three months up to the end of June. Investment banking fees were up 27%, whilst equities were up 38%.
The bank has also announced that it will be increasing capital distributions to shareholders. Shareholders will receive a half-year dividend of 2 pence per share and an additional buyback of up to £500 million. Barclays shares are up by approximately 15% year-to-date. However, they were as much as 31% higher at the end of April 2021.
As detailed in its first-quarter earnings report, Barclays has also seen a substantial reduction in credit loss provisions and successfully released almost £800 million from its credit impairment provisions instead of the £1.6 billion charge incurred for the same period of 2020.
Ocado said the fire started after a collision of its robots which are used to assist with the picking of produce. Around 800 staff members had to be evacuated from the site in Erith, which handles up to 150,000 orders per week. Thousands of orders have had to be cancelled as a result of the incident.
In a statement, Ocado said that the damage done by the fire is limited to a small section of less than 1% of the grid. Planned fire attenuation measures pretended the fire from spreading to the rest of the site. Ocado said that although the fire would disrupt its operations, the company is working quickly to restore normal services.
This is not the first fire that Ocado has had to deal with. Back in 2019, a facility in Andover burned down due to an electrical fault. The fire burned for four days, destroying the company's unit and putting the plant, which processed 30,000 orders per week, completely out of action.
By 9 am on Monday, stock trading was down 3.1% in London, contributing further to a losing streak for the grocery retailer. This year alone, Ocado stock is down approximately 23%.
On July 11, Virgin Galactic founder Sir Richard Branson, flew high above New Mexico, US, in a rocket planet that had taken the company almost two decades to develop. The trip, which lasted just over an hour, was labelled as an experience of a lifetime by the Virgin Galactic founder.
A company filing showed that Virgin Galactic made a distribution agreement with investment banks Morgan Stanley, Credit Suisse, and Goldman Sachs to sell up to $500 million of shares. In light of this news, company shares did a U-turn, dropping 12% after gaining approximately 20% in pre-market trade.
The agreement saw £1 billion wiped from the company’s market capitalisation. Trading in Virgin Galactic was also temporarily halted on Monday morning due to volatility.
Virgin Galactic plans to use the proceeds from the sale for corporate matters, including working capital, capital expenditures for manufacturing, general and administrative purposes, and the development of its spacecraft fleet. Following Sir Richard Branson’s flight to space, the company plans to conduct at least two more test flights of its space vehicles in the coming months. By 2022, the Virgin Galactic plans to begin its regular commercial operation, enabling members of the public to fly to space.
The market is a highly unpredictable place. Since trading has been incorporated and improved through the years, now, it's not just buying, selling, or exchange. Additionally, studies and developments were made to help traders, like the trade simulation system. But if there are tools to help traders, there are also traps to look out for. One of them is the bear trap.
What Is Bear Trap in Trading?
A bear trap is a condition in the market where the expected downward movement of prices suddenly reverses up. When prices in an uptrend abruptly drop, a bear trap follows. This phenomenon and market performance lure many traders in investing and buying in the market.
Most traders commonly don’t know how to trade bear traps or when they're falling into the trap. A bear trap trading happens when a trader, upon getting attracted to the falling prices, decides to put on a short position when a currency pair is falling, only for the price to reverse and suddenly goes up and moves higher.
How Does It Work?
Usually, other traders set bear traps where they sell assets until other traders are convinced that the upward trend has ended and the prices will drop. As the prices continue to drop, traders will be fooled into believing that it will continue.
And then the bear trap will be released as the market turns around and prices go higher. It’s a false market performance that leads to many traders losing money.
Bear Trap vs. Bull Trap
A bear trap and a bull trap are commonly interchanged or misinterpreted. In the market, these two are opposites. If a bearish trap happens when prices are dropping, bullish traps happen when the market rises and prices continue to move upwards.
Causes of Bear Traps
There are many reasons why bear traps happen or occur in the market. They can occur in any market and commonly happen because bears decide to drop or pull the prices down.
Additionally, the causes of bear traps include:
- Long downtrend or downward movement of prices in the market
- Unexpected events in real life that involve leaders and even politicians
- A continuous strong uptrend in the market
How to Identify a Bear Trap
A bear trap can cause any trader a significant amount of losses. To minimize this kind of risk when trading, it's for the best that you know what to look out for before you get caught in the trap. Some more technical indicators you should watch out for are:
1. Divergence
Certain indicators provide divergence signals. When there's divergence, there is a bear trap. To look out for divergence, you have to check if the indicator and the price in the market are moving in different or opposite directions. Using this to determine whether a bear trap will occur, when the price and indicator are moving in the same direction, there's no divergence so that no bear trap will happen.
2. Market Volume
The market volume is a critical indicator of a bear trap. There is a significant change in the market volume when a price is potentially rising or dropping. However, if there is no significant increase in volume when a price drops, it is most likely a trap. Low volumes commonly represent a bear trap since bears can’t consistently pull the price down.
3. Fibonacci Level
Fibonacci levels indicate reversals of prices in the market since trend reversals are identified using fibo ratios. This also makes them a great indicator of bear traps. A bear trap is most likely to occur when the trend or price doesn’t break any Fibonacci level.
How To Avoid Bear Traps
Bear traps are risky, and the best way to not fall into any is to avoid them. If you get caught in a bear trap, you can quickly lose money. Here are some ways to help you avoid getting caught in a bear trap:
- Use candlestick patterns like a reversal candlestick. It’s an excellent indicator that can help you avoid bear traps. When you see this pattern formed in the market right after a downtrend, the price drop is too good to be true and will not last long.
- Observe the volumes. The volumes reflect the strength of a bear. If a volume indicator shows no sign of an increase in volume, there’s a low chance of the price being pulled down further by the bears. It’s best not to enter the market at this time.
- Widen your stop-loss orders and don’t place them under the support and resistance line. They should provide a buffer zone that can act as a breather when false breakouts or price drops happen.
- Bear traps happen when there’s a downtrend, so you should check the length of a downtrend. Observe how long the trend has been going and refrain from entering the market when there is a prolonged downtrend.
Bear trap trading is usually utilized for short-selling or shorting by traders. But still, it’s clear that bear traps are risky and best be avoided. You’ll lose more than you can earn. When trading, it’s essential that you know what bear traps are and what indicates a bear trap so that you can avoid getting caught in one. Be patient when trading and don’t get carried away by the price drop in the market.
Shares in UK cybersecurity startup Darktracce surged as much as 43% on its hotly anticipated stock market debut on Friday.
The firm initially priced its shares at 250p on Friday morning, for a total value of £1.7 billion. But at around 8:15 AM London time, these shares climbed above 358p – an increase of 43%.
Darktraace said that its initial offering would comprise around 66 million shares, or roughly 9.6% of its issued share capital, and raise a total of £165.1 million. £143.4 million of this will go to the company, while the remaining £21.7 million will go to existing shareholders, with the possibility of a further 9.9 million shares also being sold if demand beats expectations.
Darktrace shares began trading in conditional dealings on Friday under the ticker “DARK”. Unconditional dealings are expected to begin on 6 May.
The firm’s successful stock market debut comes just weeks after the highly anticipated Deliveroo IPO, which became one of the biggest London debut flops in history. Shares in the Amazon-backed food delivery startup plummeted as much as 30% when trading began on 31 March.
As a similarly tech-focused UK startup, the Darktrace IPO has been viewed as the second major test of London’s viability for high-growth tech company debuts.
Darktrace uses AI technology developed by a team of Cambridge mathematicians to identify unusual patterns in firms’ IT systems that indicate hacking attempts. It has raised a total of $230.5 million from investors to date, according to data collected by Crunchbase.
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The startup’s progress towards Friday’s stock market debut has been dogged by concerns over its connection with Mike Lynch, founder of Autonomy and an early investor in Darktrace, who faces fraud charges in the US over allegations of having inflated his firm’s value before its sale o Hewlett Packard in 2011.
Deutsche Bank on Wednesday posted a pre-tax profit of €908 million for the first three months of 2020 – its best quarterly performance in seven years, and a notable increase on its profit of just €66 million for the same period in 2020.
Profits rose across all of the bank’s core divisions, though its investment banking arm performed most strongly with a 134% rise in pre-tax profits to €1.5 billion. Revenue across the bank grew 14% to €7.2 billion, its highest total since 2017.
CEO Christian Sewing attributed the strong results to effective risk management and tight control of costs. "Our first quarter is further evidence that Deutsche Bank is on the right path in all four core businesses, and is building sustainable profitability," he said. "In addition to substantial revenue growth over an already strong prior year quarter, we demonstrated cost and risk discipline."
Deutsche Bank’s strong quarterly performance is also significant in its avoidance of damage from the implosion of Archegos Capital Management. The family-run hedge fund collapsed in March and dragged down the profits of major banks tied to it. Credit Suisse made an immediate loss of $4.7 billion, while Morgan Stanley lost $1 billion and Nomura lost $1.43 billion.
However, Deutsche Bank made no mention of Archegos in its quarterly report despite being a client of the fund. The bank is understood to have conducted a relatively small amount of business with Archegos and exited positions quickly upon its collapse, minimising damages to its revenue.
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Shares in Deutsche Bank rose as much as 6% in early trading on Wednesday upon the release of the quarterly earnings report.
The FTSE 100 rose on Wednesday, rallying after a mass sell-off led to a 2% fall in the previous session.
The index rose 0.6%, lifted by oil giants BP Plc’s and Royal Dutch Shell’s respective gains of 2.0% and 1.7%. The surge followed a report from Azerbaijan’s energy ministry said BP’s oil output reached 5.9 million tonnes in the first quarter.
Some stocks continued to slip, however. Just Eat Takeaway.com fell 4.2%, slumping to the bottom of the index, following news that rival Uber Eats plans to expand into Germany.
Meanwhile, data published on Wednesday indicated that inflation in the UK rose to 0.7% in March, in line with expectations.
The FTSE 100’s positive performance follows a sell-off on Tuesday that led to major indices in Europe and Asia closing as much as 2% in the red. US markets were also negatively affected, though not to such an extent; S&P 500 futures and Dow Jones futures were flat, while Nasdaq futures fell 0.1%.
The sell-off appeared to be triggered by anxiety over rising COVID-19 cases in India and elsewhere, and their implications for the economy. IAG dived by 8.1% on concerns over travel plans being scrapped, while hotel operators Whitbread and Intercontinental lost 4.8% and 4% respectively.
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Overall, around £37 billion was wiped off the FTSE 100 on Tuesday.
While the London-based index rallied on Wednesday, Germany’s DAX and France’s CAC 40 respectively gained 0.2% and 0.4% by mid-morning.
JPMorgan confirmed on Monday that it is financing the nascent European Super League, a breakaway group featuring 12 of Europe’s biggest football clubs that threatens to shake up the sport.
Six Premier League teams – Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur – are involved in the deal, alongside AC Milan, Atletico Madrid, Barcelona, Inter Milan, Juventus and Real Madrid.
Each of the clubs will receive a one-off payment of €3.5 billion ($4.5 billion) for their participation in the League. Organisers stated that a further three founding members would be announced, with five places left open to qualifying teams each year.
"I can confirm that we are financing the deal, but have no further comment at the moment," a spokesperson for JPMorgan said in a statement to AFP.
The announcement of the Super League appeared to be timed to pre-empt UEFA’s scheduled unveiling of widespread reforms to the Champions League on Monday. The move has been met with widespread criticism from UEFA and the Premier League, as well as UK Prime Minister Boris Johnson, who has promised to “make sure” that the European Super League “doesn’t go ahead in the way that it’s currently being proposed.”
The Premier League said in a statement: ““A European Super League will undermine the appeal of the whole game, and have a deeply damaging impact on the immediate and future prospects of the Premier League and its member clubs, and all those in football who rely on our funding and solidarity to prosper.”
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Shares in Juventus rose 10% in early trading on Monday, while Manchester United stock slipped 0.6%.
China’s economy grew a record 18.3% in the first quarter of 2021 compared to the same period in 2020, new data has shown. Growth was also up from 6.5% in the fourth quarter of 2020.
The results mark the biggest jump in Chinese GDP since quarterly records began in 1992. However, the economy’s growth fell short of the 19% mark predicted by a Reuters poll of analysts.
China, which boasts the second largest economy in the world, was the only major nation to experience economic growth in 2020 amid a strong bounce back from the COVID-19 pandemic, maintaining high retail spending and exports.
European stocks were boosted by the news, with the FTSE 100 rising 0.5% after opening on Friday morning – rising above the 7,000 points level for the first time since February 2020. France’s CAC and Germany’s DAX also rose 0.2% and 0.3% respectively.
Asian stocks were also lifted by the news, with Japan’s Nikkei climbing 0.1% while the Hong Kong Hang Seng rose 0.6%.
US futures, however, saw a slump as European trading opened. S&P 500 futures were down 0.1%, Nasdaq futures were down 0.2%, and Dow futures were flat. The indexes’ gloomy outlook followed a day of near record highs as US economic data indicated a solid global recovery from the pandemic-induced recession.
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“The national economy made a good start,” a spokesperson for China’s National Bureau of Statistics said on Friday, attributing the spike in GDP to “incomparable factors such as the low base figure of last year and increase of working days due to staff staying put during the Lunar New Year” holiday.
"We must be aware that the Covid-19 epidemic is still spreading globally and the international landscape is complicated with high uncertainties and instabilities,” the Bureau cautioned.
US stock indexes were set to rise on Wednesday following positive earnings reports from investment banks.
JPMorgan Chase & Co and Goldman Sachs Group Inc both beat analysts’ expectations for first-quarter profit.
Goldman saw its overall investment banking revenue jump 73% to $3.77 billion, the highest amount seen since 2010. The bank managed to effectively capitalise on record global investment banking activity, which Refinitiv data showed as reaching an all-time high of $39.4 billion in the March quarter.
Meanwhile, JPMorgan, the US’s largest bank, reported earnings as having leapt almost 400% in the first quarter of the year. Like Goldman, it saw immense growth in its investment banking revenue, which jumped 57%.
JPMorgan reported that consumer spending in its businesses had reached pre-pandemic levels and risen 14% above Q1 2019.
Shares in Goldman rose 1.5% on Wednesday, while JPMorgan’s shares fell 0.6% despite its almost quadrupled revenue. The share slip came as the bank released over $5 billion it had set aside in reserves against COVID-19-prompted loan defaults.
Goldman easily held on to its first-place ranking for global M&A advisory, while JPMorgan overtook Morgan Stanley as the world’s second biggest advisor.
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It was also revealed on Tuesday that Goldman Sachs plans to expand operations to Birmingham this year. The bank expects to recruit “several hundred” people across the divisions it builds, beginning with an engineering department that it will fill through a combination of new hires and employee transfers.
Amsterdam-based tech investor Prosus NV netted $14.6 billion overnight from the sale of a 2% stake in Tencent, the company announced on Thursday.
A filing from Tencent at the Hong Kong Stock Exchange revealed that Prosus had sold 191.89 million shares at HK$595.00 per share.
“Our belief in Tencent and its management team is steadfast, but we also need to fund continued growth in our core business lines and emerging sectors,” Prosus Chairman Koos Bekker said in a statement on Thursday, hours after the completion of the deal.
Prosus is majority owned by Naspers of South Africa. The Wednesday night sale lowered its stake in Tencent from 30.9% to 28.9% -- a level which the company has committed to not reducing any further for the next three years.
“The proceeds of the sale will increase our financial flexibility, enabling us to invest in the significant growth potential we see across the group, as well as in our own stock,” Prosus CEO Bob van Dijk said in a statement.
Tencent Chairman Pony Ma acknowledged the sale and reaffirmed that he viewed Prosus as having been a “committed strategic partner over a great many years”. He also stated that “Tencent respects and understands” the firm’s decision to sell.
Tencent Holdings, headquartered in Shenzhen, is one of the largest companies in China. The conglomerate focuses primarily on internet-related services and products, including video games and social media.
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Though not a household name outside of China, the company made international headlines as it butted heads with the Trump administration over an executive order banning US firms from doing business with its social media subsidiary, WeChat.
