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Will Apple, Amazon or Microsoft be the world’s first $2 trillion company?

Three US-based tech companies are all vying to become the world’s first $2 trillion stock. Apple remains the clear frontrunner, with the iPhone maker’s market cap sitting at $1.96 trillion and rising fast.

Three US-based tech companies are all vying to become the world’s first $2 trillion stock. Apple remains the clear frontrunner, with the iPhone maker’s market cap sitting at $1.96 trillion and rising fast.

However, US tech giants Amazon and Microsoft are tied for second, with the pair both boasting a market cap of $1.59 trillion at the time of publication.

Despite the economic fallout from Covid-19, all three companies are trading near all-time highs, with the stocks all likely to push on to reach higher highs in the weeks and months ahead.

Apple closed at $458.43 per share on Monday, while Amazon and Microsoft ended the first trading session of the week at $3182.41 and $210.28, respectively.

TikTok deal could help Microsoft take the lead over Amazon

Apple certainly looks likely to become the first $2 trillion stock, but Microsoft could pull away from Amazon in the race for second if it finalises its potential purchase of TikTok’s US operations later this year.

Earlier this month, Microsoft said that it will ‘move quickly’ to pursue discussions with the social media platform’s parent company ByteDance, with the US tech giant aiming to complete talks ‘no later’ than 15 September this year.

‘Following a conversation between Microsoft CEO Satya Nadella and President Donald J. Trump, Microsoft is prepared to continue discussions to explore a purchase of TikTok in the United States,’ Microsoft said in a statement.

‘Microsoft fully appreciates the importance of addressing the President’s concerns. It is committed to acquiring TikTok subject to a complete security review and providing proper economic benefits to the United States, including the United States Treasury.’

The two companies have provided notice of their intent to explore a preliminary proposal that would involve a purchase of the TikTok platform in the US, Canada, Australia, and New Zealand and would result in Microsoft owning and operating TikTok in these markets.

Microsoft may invite other American investors to participate on a minority basis in this purchase.

Apple stock split could help propel share price higher

The iPad maker announced a four for one split of its common stock earlier this year, with trading beginning on a split adjusted basis on 31 August.

A stock split is an action available for publicly traded company’s that allows them to divide existing shares into multiple shares. In real terms, it allows companies like Apple to split their shares in order to lower the trading price of their stock and make it more affordable for more investors. It also helps increase the overall liquidity of the shares.

After the split, investors with smaller amounts of capital will be able to acquire Apple shares, which in turn could help propel its share price even higher in 2020 and beyond.

Apple: technical analysis

Taking a look at the chart of Apple we can see this ascending trend line since the March trough with a series of higher highs and higher lows, according to Victoria Scholar, market analyst and presenter at IG.

‘The Relative Strength Index (RSI) is now back above 70 which may suggest that the stock is overbought or it can be an indication of a strong uptrend,’ Scholar said. ‘The Stochastic oscillator is also above 80, so with both moving higher, this suggests there’s momentum behind the rally.’

‘In terms of key levels, look out for $467.73 on the upside, with the $2 trillion valuation likely to be the next level of resistance with a break above certainly acting as a vote of confidence in the bull case,’ she added.

‘And on the downside, keep an eye on the rising ascending trend line for support, a break below might negate some of this positivity.’

Apple, Amazon and Microsoft drag the Nasdaq to all-time highs

The meteoric rise of Apple, Amazon and Microsoft in 2020 proved that a rising tide does lifts all boats, with the trio helping to push the Nasdaq Composite index to new all-time highs.

In fact, the Nasdaq Composite index closed at 11,129.73 points on Monday, with it up 22% year-to-date – an incredible achievement considering the battering many other equities have suffered at the hands of the coronavirus pandemic.

How to trade stocks with IG

Looking to trade Apple, Amazon, Microsoft and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘Apple’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade
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Daily Financial News

Don’t Count On JPY Correction; Staying Long GBP/JPY

The path of the potential pace of the JPY decline may still be underestimated by markets, which continue trading the JPY long.

While the 10% USDJPY advance from September lows looks impressive from a momentum point of view, it may no thave been driven by Japan’s institutional investors reducing their hedging ratios or Japan’s household sector reestablishing carry trades.

Instead, investors seemed to have been caught on the wrong foot, concerned about a sudden decline of risk appetite or the incoming US administration being focused on trade issues and not on spending. Spending requires funding and indeed the President-elect Trump’s team appears to be focused on funding. Here are a few examples: Reducing corporate taxation may pave the way for US corporates repatriating some of their USD2.6trn accumulated foreign profits. Cutting bank regulation could increase the risk-absorbing capacity within bank balance sheets. Hence, funding conditions – including for the sovereign – might generally ease. De-regulating the oil sector would help the trade balance, slowing the anticipated increase in the US current account deficit. The US current account deficit presently runs at 2.6% of GDP, which is below worrisome levels. Should the incoming government push for early trade restrictions, reaction (including Asian sovereigns reducing their holdings) could increase US funding costs, which runs against the interest of the Trump team.

Instead of counting on risk aversion to stop the JPY depreciation, we expect nominal yield differentials and the Fed moderately hiking rates to unleash capital outflows from Japan.The yield differential argumenthas become more compelling with the BoJ turning into yield curve managers. Via this policy move, rising inflation rates push JPY real rates and yields lower, which will weaken the JPY. Exhibit 12 shows how much Japan’s labor market conditions have tightened. A minor surge in corporate profitability may now be sufficient, pushing Japan wages up and implicity real yields lower.

JPY dynamics are diametrical to last year . Last year, the JGB’s “exhausted”yield curve left the BoJ without a tool to push real yields low enough to adequately address the weakened nominal GDP outlook. JPY remained artificially high at a time when the US opted for sharply lower real yields. USDJPY had to decline, triggering JPY bullish secondround effects via JPY-based financial institutions increasing their FX hedge ratios and Japan’s retail sector cutting its carry trade exposures. Now the opposite seems to be happening. The managed JGB curve suggests rising inflation expectations are driving Japan’s real yield lower. The Fed reluctantly hiking rates may keep risk appetite supported but increase USD hedging costs.Financial institutions reducinghedge ratios and Japan’s household sector piling back into the carry trade could provide secondround JPY weakening effects

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Daily Financial News

Mexico raises interest rates, cites Trump as risk

The head of Mexico’s central bank says U.S. Republican candidate Donald Trump represents a “hurricane” sized threat to Mexico.

Banco de Mexico Gov. Agustin Carstens told the Radio Formula network Friday that a Trump presidency “would be a hurricane and a particularly intense one if he fulfills what he has been saying in his campaign.”

Trump has proposed building a wall along the border and re-negotiating the North American Free Trade Agreement.

Mexico’s central bank raised its prime lending rate by half a percent to 4.75 percent Thursday, citing “nervousness surrounding the possible consequences of the U.S. elections, whose implications for Mexico could be particularly significant.”

Mexico’s peso had lost about 6 percent in value against the dollar since mid-August. It recovered slightly after the rate hike

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Financial News

Africa’s first Fairtrade certified gold co-operative offers hope to gold miners living in poverty

Syanyonja Artisan Miners’ Alliance (SAMA) has become the first artisanal small scale mining co-operative in Africa to become Fairtrade certified, bringing much needed hope to impoverished communities who risk their lives to mine the rich gold seam that runs around Lake Victoria.

SAMA is one of nine previously informal groups from Uganda, Kenya and Tanzania which has benefitted from a pilot project launched by Fairtrade in 2013. This innovative program aims to extend the benefits of Fairtrade gold to artisanal miners across East Africa.

In that short time, SAMA has undergone training in business and entrepreneurship, as well as safe use of mercury, internal control systems, labour rights and better working conditions, health and safety and more. Previously, daily contact with toxic chemicals used to process gold meant members risked disease, premature births and even death.  Fairtrade gold was first launched in 2011, and SAMA now joins Fairtrade certified gold mines MACDESA, AURELSA and SOTRAMI in Peru.

The co-operative produces just 5 kg gold per year, but nevertheless has the potential to significantly benefit many people in the local community through better conditions through certification. It is expected that Fairtrade and organizations like Cred Jewellery will support the miners, ensuring their gold can be refined and made available to jewellers in the UK and other markets.

Gonzaga Mungai, Gold Manager at Fairtrade Africa said: “This is a truly momentous and historical achievement and the realisation of a dream that is many years in the making. Gold production is an important source of income for people in rural economies. Congratulations to SAMA, it sets a precedent which shows that if groups like this can achieve certification, then it can work for others right across the African continent.”

The Fairtrade Gold Standard encourages better practice and changes to come in line with international regulation around the production and trade of so-called ‘conflict minerals’. Under the Standard, miners are required to:

  • Uphold a human rights policy preventing war crimes, bribery, money laundering and child labour
  • Clearly represent where the minerals were mined
  • Minimise the risks of conflict minerals through robust risk assessments and collaboration across supply chains
  • Report to buyers and trading partners regarding the risks of conflict minerals

Now in its second phase, the programme will focus on supporting other mining groups in the region to access affordable loans and explore a phased approach to accessing the Fairtrade market, allowing more mining co-operatives across Africa to participate in the programme.

Gonzaga added: “Sourcing African metals from smallscale miners in the Great Lakes Region is the responsible thing to do. For a long time companies have avoided buying gold from this region, with devastating consequences for impoverished communities who were already struggling. It has driven trade deeper underground, as unscrupulous buyers pay lower prices and launder illegal gold into legitimate supply chains. That’s why we have chosen to work with these groups to help them earn more from their gold within a robust compliance system that offers social, environmental, and economic protections.”

The Fairtrade gold programme offers a small but scalable solution to sustainable sourcing of gold from the region in line with Section 1502 of the Dodd-Frank Act in the US, OECD Due Diligence Guidance and recent EU Supply-Chain Due Diligence proposals which could come into effect in 2016. This means that up to 880,000 EU firms that use tin, tungsten, tantalum and gold in manufacturing consumer products could be obliged to provide information on steps they have taken to identify and address risks in their supply chains for so-called ‘conflict minerals’.

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