March 1, 2018 Market Outlook

February Ends in Volatile Session

The month of February ended in dramatic fashion as U.S. stocks closed lower in a volatile session on Wednesday. It reversed Wall Street’s earlier gains. The major benchmarks finished out lower.

The S&P 500 and the Dow Jones logged their worst monthly performance since January 2016. Both were coming off 10-month winning streaks. The Nasdaq posted its weakest month since October 2016.

Thus, the S&P 500’s 15-month streak of gains came to an end. Peter Kenny, senior market strategist at the Global Markets Advisory Group, said that February 2018 will be remembered as the month where fear of unbridled inflation met with valuations well beyond historical norms.

Consumers Favor an Amazon Cryptocurrency

The results of a survey conducted by LendEDU and released Wednesday showed that shoppers would welcome an Amazon-created virtual currency. Of the 1,000 respondents, 51.7% favored the idea of using Amazon’s cryptocurrency to pay for purchases. A higher 58.27% of Amazon Prime users are cool to the bitcoin-type currency which the questionnaire described as “Amazon Coins.”

The survey also inquired from shoppers if they were open to Amazon’s disrupting the banking sector. Interestingly, 45% would consider making Amazon its primary bank account. Further, 49.6% are amenable to a savings account created by Amazon. About 38.3% said they would have “about the same level of trust” in Amazon handling their money in lieu of a traditional bank.

Microsoft’s 1st Renewable Energy Deal in Asia

U.S. technology company Microsoft Corp. (MFST) said on Thursday that it will buy solar power from the Sunseap Group in Singapore. It will be the company’s first renewable energy deal in Asia.

Microsoft signed a contract that would mean purchasing 100% of the electricity generated by Sunseap’s 60 megawatt-peak solar power project for 20 years for its data operations in the country. The project consists of an array of solar panels on hundreds of rooftops across the city-state.

Christian Belady, general manager, cloud infrastructure strategy and architecture at Microsoft, said “This deal is Microsoft’s first renewable energy deal in Asia, and is our third international clean energy announcement, following two wind deals announced in Ireland and the Netherlands in 2017,”

American Airlines Cries Foul over O’Hare Renovation

American Airlines (AAL), the largest air carrier in the U.S., is complaining about a “secret provision” in an $8.5 billion deal to renovate and expand Chicago’s O’Hare airport. On Wednesday, the airline company said the provision gives rival United Airlines (UAL) an unfair advantage.

The office of Chicago Mayor Rahm Emanuel proudly said the project is the largest expansion of O’Hare in the airport’s history. Prior to Wednesday, both air carriers appear to approve the project.

But American Airlines suddenly balked and refuse to sign the lease citing the “last-minute” provision would allow United to “expand its size advantage” at the airport. The two companies use the O’Hare airport as their flight hub.

Spotify Files for Direct Listing

Spotify, the biggest music streaming company in the world, is taking an unusual route to list and trade on the New York Stock Exchange. Instead of hiring an underwriter for the offering and raise capital, the company will let investors and employees sell their shares.

Although there will be no issuance of any new shares, there was no mention of a specific listing price. Reuters estimated the value to be about $19 billion basing from private transactions.

Spotify laid out financial data for the first time that drew applause from some analysts. But others are questioning how the company’s growing subscriber base translates into profit. Spotify, launched in 2008 is available in more than 60 countries. Their main rivals in providing similar services are Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), and Apple Inc.

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