There’s no charge for this.
This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
[vc_row][vc_column width="1/1"][vc_column_text]This week, US tech stocks have faced heavy losses as an emerging UK data scandal faces investigations by authorities in both Europe and North America.
This report will break down the key issues, including what is happening and why, as well as delving deeper into the sharp moves these US stocks have made.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
Over the weekend, the UK’s Observer and the US New York Times reported that Cambridge Analytica, a UK political consultancy credited with helping Donald Trump win the US Presidency, had illegally retained access to the data of 50 million Facebook users.
Furthermore, Channel 4 revealed on Monday that the company used underhand tactics, such as corruption and entrapments, to influence political opponents.
The scandal has raised a wider question over how the company came to hold the data of these Facebook users, as well as how this data was then utilised.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
The scandal has resulted in Cambridge Analytica CEO Nix being suspended after being filmed claiming his company engaged in ‘honey traps’ and bribes.
It has also raised concerns from regulators on both sides of the Atlantic about how Facebook and other social media companies collate and distribute data.
The UK parliament’s Digital, Culture, Media and Sport Committee, the European Commission and the US Federal Trade Commission have all requested founder Mark Zuckerberg, or a senior executive, provide evidence about Facebook’s involvement.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
Facebook was the first company to face the wrath of investors, falling 8.3% since Monday after the news broke. This equates to almost $50bn of the company’s market cap being lost in just two days.
But it’s not just Facebook that has been hurt in the scandal, as other social media companies also face greater scrutiny over how they handle users’ data.
Twitter shares fell over 10% on Tuesday as it became the latest big name to suffer a reduction in confidence from investors over how it handles data.
There have also been sharp moves lower by Snap, the parent company of popular messaging app Snapchat, falling by 2.6% on Tuesday, and Google parent Alphabet, itself 3.4% lower so far this week.
It’s worth noting that the scandal has erupted just months before Europe introduces stricter data protection rules with heavy fines for offenders.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
The scandal has not had a significant impact on US tech stocks which investors believe less personal data that could be exploited for illegal purposes.
Companies such as Netflix and Amazon, despite seeing a marginal retreat in share price on Monday, saw strong recoveries on Tuesday, highlighted by Amazon overtaking Alphabet as the world’s second largest company behind Apple.
Over the page, we look at four major US tech companies affected in varying degrees by the ongoing Cambridge Analytica scandal.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Facebook, the company at the centre of the Cambridge Analytica scandal, has seen its shares fall markedly. Regulators on both sides of the Atlantic are demanding answers from the social media company as to how the data of 50 million users was both released to the political consultancy and what that data was used for.
Shares fell 7.3% on Monday after the weekend’s revelations, before falling another 2.6% on Tuesday. Despite falling once again, however, shares closed well off their lows as investors price in the potential impact on shares.
Will Facebook return to 2018 highs of $195 (+16%) or breach September lows of $162 (-3.7%)?
Broker Consensus: 90% Buy, 6% Hold, 4% Sell
Bullish: RBC Capital Markets, Outperform, Target $250, +49% (1 Mar 17)
Average Target: $222.4, +32% (21 Mar 18)
Bearish: Pivotal Research, Sell, Target $152, -9.6% (19 Mar 18)
Pricing data sourced from Bloomberg on 23 March. Please contact us for a full, up to date rundown
[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Twitter is another social media company that has borne the brunt of the Cambridge Analytica scandal. Regularly in the news for allegations of fake accounts or ‘bots’, as well as being the social media outlet of choice for US President Trump. The company reported it had over 260 million users at the end of 2017.
The company’s shares fell over 10% on Tuesday as it became the latest company to be targeted during the ongoing scandal, although have yet to fall below $30 or February’s lows of just above $24.
Will Twitter return to 2018 highs of $37 (+18%) or fall to 2018 lows of $22 (-30%)?
Broker Consensus: 16% Buy, 57% Hold, 27% Sell
Bullish: Argus Research, Buy, Target $40, +28% (9 Feb 18)
Average Target: $27.7, -12% (23 Mar 18)
Bearish: Atlantic Equities, Underweight, Target $14.5, -54% (8 Feb 18)
Pricing data sourced from Bloomberg on 23 March. Please contact us for a full, up to date rundown.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Snap, the parent company of popular picture messaging app Snapchat, is a relative newcomer to the world of social media. However, the company has already faced scrutiny from investors over both its popularity and the use of users’ data, given that its most popular feature is its ‘disappearing’ photo messages.
Its shares have come under pressure as a result of the Facebook scandal, however they have not faced as much selling as social media peers. Will the shares therefore recover some poise before larger rivals?
Will Snap return to 2018 highs of $21 (+31%) or fall to November lows of $12 (-25%)?
Broker Consensus: 23% Buy, 48% Hold, 29% Sell
Bullish: Goldman Sachs, Buy, Target $23, +44% (7 Feb 18)
Average Target: $15.7, -1.8% (23 Mar 18)
Bearish: Susquehanna Financial, Negative, Target $7, -56% (16 Feb 18)
Pricing data sourced from Bloomberg on 23 March. Please contact us for a full, up to date rundown.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Netflix, the video streaming service, has been one of the US tech stocks least affected by the ongoing Facebook scandal. Despite being one of the largest US tech companies, with almost 120 million users worldwide, the company’s smaller social reach means that users are less likely to share important data between themselves.
While other tech stocks in the US face share price declines of well over 10%, Netflix shares are trading back at the same price as they were on Friday. Will they be able to climb to better 2018 highs as peers fall by the wayside?
Will Netflix return to 2018 highs of $334 (+5.2%) or fall to February lows of around $235 (-26%)?
Broker Consensus: 55% Buy, 38% Hold, 7% Sell
Bullish: Pivotal Research, Buy, Target $400, +26% (6 Mar 18)
Average Target: $277.7, -13% (21 Mar 18)
Bearish: Societe Generale, Sell, Target $132, -58% (25 Jan 18)
Pricing data sourced from Bloomberg on 23 March. Please contact us for a full, up to date rundown.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Whether you see UK Stocks going up or down for the remainder of the year, tradable opportunities will present themselves regularly. We’re here to help you weed them out and capitalise on them. Accendo Markets can help you increase your profit potential with the use of leveraged instruments such as CFDs, a flexible alternative to traditional shares that is currently exempt from UK stamp duty.
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/2"][vc_column_text]
[/vc_column_text][vc_column_text]
[/vc_column_text][vc_column_text]
[/vc_column_text][/vc_column][vc_column width="1/2"][vc_column_text]
While buying 14,182 shares in Lloyds Banking @ 70.51p requires an outlay of around £10,000 plus commission, the same exposure via a CFD requires about £500 plus commission (see right-hand box; margin + costs). If a trader invests in Lloyds Banking, one would assume they believe the share price is likely to move in their favour. After considering the ‘worst case scenario’ and assigning funds to cover it, the trader may conclude there’s little point in exposing the full £10,000 to Lloyds Banking shares - some of that capital could be put to good use elsewhere in the markets. (Source: CMC, Prices indicative)
If you had, say, £10,000 to invest in the stock market, you could deposit that amount into a share dealing account and purchase shares in a company. You would pay commission to open the position, 0.5% in stamp duty and the full £10,000 will be tied up in your chosen shares with any profit or loss based on that exposure. The same £10,000 worth of exposure can be secured with a CFD for a fraction of the initial outlay thanks to leverage, with the risk and reward the same as if £10,000 worth of traditional shares were held. But should you not be interested in leverage, you can always treat CFDs like shares. Simply deposit £10,000 into a CFD trading account and take the equivalent CFD position which will tie up as little as 3%/£300 (note that overnight financing costs will still apply). The remaining £9,700 is not tied up, so you can use some of that to take advantage of another short-term opportunity elsewhere, or simply leave it on the account to support any losses. Best of all, using a CFD means you pay no stamp duty![/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
Think shares will rise? Take a long position by buying CFDs (buy low, aiming to sell high). Think they’ll fall? Take a short position by selling CFDs (sell high, aiming to buy low). For a more detailed rundown of CFDs, their mechanics, associated costs and some trading scenarios download our ‘Comprehensive Guide to CFDs’ here.[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
Does your current broker’s morning report tell you all you need to know about yesterday’s news? If so, how is it offering you anything more than the plethora of information already available on the internet?
We’re proud that our morning editorial has become a hot commodity in the City, its content quoted daily by the journalists that are writing the news everyone else will be reading later in the day, if not the next. Our morning report tells you what’s driving the market at that moment and what to look out for in the day ahead.
If a company has reported earnings before the market opens, we’ll tell you why the shares are called to open up or down in relation to that announcement.
As well as the Morning Report, signing-up to Accendo Markets Research & Trade Ideas offers you the chance to receive the following publications:
To ensure you can act as quickly as possible, you’ll receive an email with a link to the latest publication as soon as it’s released. You can unsubscribe from these emails at any time.
Based on a wealth of experience, gained from both large and small institutions, our Research and Trade Ideas are produced in-house. Our team of dedicated professionals comprises both analysts and traders, drawing upon a wide range of resources and methodologies.
Our aim is to provide you with the manpower and expertise you need to help you clarify, interpret and capitalise on the ever-growing volume of market information.
The journalists don’t pay for it and neither do you, so why not give it a go? You’ve nothing to lose and perhaps a little more to gain…[/vc_column_text][/vc_column][/vc_row]
[vc_row][vc_column width="1/1"][vc_column_text]
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width="1/1"][vc_column_text]
Do you need to exchange currency? You could be being overcharged by thousands of pounds by your bank or bureau de change!
It’s now easier than ever to get bank-beating currency exchange rates that could save you thousands. For too long banks have dominated the FX market to the point where they will simply give you an exchange rate that may as well have been plucked from thin air. The current system is due an overhaul.
The foreign exchange market is always moving. On this premise, a new breed of Currency Exchange specialists is able to offer unparalleled services that will help you by constantly monitoring the market on your behalf. It’s now the norm for customers to expect the support of a knowledgeable and approachable account manager - your eyes and ears in the market - who’s always on hand to talk.
Download your free Currency Exchange Guide here to make sure you don’t make the mistake of accepting an inferior exchange rate.
This free guide will tell you:
Whether you're an individual or a business, this guide could put thousands of pounds in your pocket. Be informed, don't lose out. Download your free guide here.
AccendoFX Ltd - 1 Alie Street, London, E1 8DE (UK) - AccendoFX Ltd. is registered with the Financial Conduct Authority (FCA) No. 671133 and HMRC No. 12798406. Registered in England and Wales No. 9269365.[/vc_column_text][/vc_column][/vc_row]
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research