Bryan

Credit card transactions are rising on the service sector’s reopening and increased discretionary spending ahead of the forthcoming holiday season. So, credit card giants Visa (V) and Mastercard (MA) should benefit. But which of these stocks is a better buy now? Read more to find out.Payment’s technology company Visa Inc . (NYSE:V) facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network. V is headquartered in Foster City, Calif. In comparison, Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services. The Purchase, N.Y.-based company facilitates the processing of payment transactions, including authorization, clearing, and settlement.

The use of credit cards and other online payment methods has increased significantly over the past year, as people have relied more on digital modes of payments consistent with remote lifestyles. Despite increasing prices, retailers have reported solid sales because spending on services and discretionary items has increased significantly. According to the U.S. Commerce Department, retail sales rose a seasonally adjusted 1.7% in October. This trend should drive growth for credit card companies too. Furthermore, technological innovation and the rapid adoption of digital prepaid card services should enhance the credit card market in the coming months. According to Research and Markets, the global credit card market is expected to grow at a 3% CAGR to hit $103.06 billion in 2021.

MA has gained 0.9% in price over the past month versus V’s negative returns. Also, MA’s 6.5% gains over the past nine months are higher than V’s negative returns. MA is the clear winner with 6.7% gains versus V’s negative returns in terms of their past year’s performance.

David Neuhauser, chief investment officer at Chicago-based hedge fund Livermore Partners, has defended his short position in Tesla, Facebook and Cathie Wood’s Ark Innovation ETF, arguing that all could be vulnerable in the event of a market downturn.

As of Wednesday’s close, Tesla is up more than 54% in 2021 while Facebook, which recently rebranded as Meta, has climbed almost 25%. The Ark Innovation ETF is down 6.24% year-to-date and famed “The Big Short” investor Michael Burry recently exited short positions on both Tesla and Ark.

But speaking to CNBC’s “Squawk Box Europe” on Thursday, when asked whether he felt there was still money to be made in these short positions, Neuhauser said: “I do.”

Investors who short a stock believe it is going to fall; they sell borrowed shares with the aim of repurchasing them at a lower price, returning the borrowed shares and making money on top.

Neuhauser argued that although Tesla is the market leader in electric vehicles and its production in recent years has been “spectacular,” competitors such as Rivian are beginning to amass multi-billion dollar valuations despite producing relatively few vehicles.

“It reminds me that there is massive frothiness in the market, and in specific areas, in specific sectors like EV, I think at some point in time you are going to see more of a downturn, and people are going to start to feel some of that pain,” Neuhauser said.

“Historically, when you look at bubbles and speculation, there always seems to be a sector or a class that tends to be sort of the poster child, and it seems like EV to me is one of them.”

He added that the broader tech sector contains companies that are seeing valuations at 15 times sales without a “plan to even get into profitability.”

These historically high valuations in the tech sector render it uniquely vulnerable in the event of a “washout or a black swan type event,” Neuhauser said, caused by a policy error in the face of persistently high inflation.

Policy error?

Neuhauser, whose fund is up more than 20% this year, suggested that this “frothiness” in the stock market could be derailed by a “disastrous policy mistake” from the Federal Reserve.

He argued that inflation is worsening and the Fed is “behind the curve,” while stock markets are being lulled into believing that they are in a “goldilocks” environment with low interest rates and moderate inflation.

• India PM speaks about preventing crypto assets falling into the wrong hands.
• PM Modi joins the Sydney Dialogue via video conference.

Cryptocurrency remains one of the hottest topics in the financial world. This time, the Prime Minister of India, Narendra Modi, speaks about crypto assets in his dialogue at the Sydney Dialogue via video conference. In detail, Modi stated that countries must join hands together to ensure that crypto-assets do not fall into the wrong hands.

Modi further explained:

Take cryptocurrency or bitcoin, for example. It is important that all democratic nations work together on this and ensure it does not end up in the wrong hands, which can spoil our youths.

In a meeting with the government officials in India, Modi warns that crypto-assets must not be allowed to be used in terrorism and other fraudulent activities. With this, we can see that Modi is really pushing to make cryptos a safe asset for India and everyone in the world. Meanwhile, this view of Modi about cryptocurrency also made some people wonder if India is soon to be open to virtual assets.

On the other hand, despite the many things that have plagued the crypto industry, the crypto world remains strong. In other words, the crypto community and its investors continue to support the space to maintain its good reputation. As a result, the crypto world can be a better place for both traders and the people who will adopt it.

With inflation rising to a 31-year high, it is no surprise that investors are looking for opportunities in sectors that will help them dodge its ravages. Because insurance companies usually fare well during inflation, we think it could be wise to add fundamentally sound insurance stocks Hartford Financial (HIG), Fairfax Financial (FRFHF), and Alleghany (NYSE:Y) to one’s portfolio. So, let’s discuss these names.The stock market has been volatile of late owing to rising inflation. The Consumer Price Index rose 6.2% in October from a year earlier, its biggest jump in more than 30 years. While the inflationary environment may not be favorable for all sectors, it could bode well for a few, such as insurance. Since high inflation usually leads to higher interest rates, it helps insurers earn more on their investments, thereby enhancing their profitability.

According to personal finance expert Suze Orman, “Only stocks have a track record of earning more than inflation.” During times like these, insurance companies, being of a defensive nature, can help combat inflation. Furthermore, according to an Insurance Journal report, the global insurance market is expected to exceed $7 trillion in premiums for the first time by mid-2022, which is earlier than expected.

So, to help protect one’s portfolio from inflation, we think it could be wise to scoop up quality insurance stocks—The Hartford Financial Services Group, Inc. (NYSE:HIG), Fairfax Financial Holdings Limited (OTC:FRFHF), and Alleghany Corporation (Y).

Here are the companies making the biggest moves in midday trading:

Nvidia — The chip giant saw its shares soaring more than 9% after the company beat earnings and sales expectations for the third quarter. Nvidia reported adjusted earnings per share of $1.17 and revenue of $7.1 billion. Analysts expected $1.11 earnings per share and revenue of $6.82 billion, according to Refinitiv. Its market cap surpassed $800 billion during Thursday’s rally.

Kohl’s — Shares of the retail chain rose 8% after a stronger-than-expected third quarter. The company earned an adjusted $1.65 in earnings per share on $4.6 billion in revenue. Analysts surveyed by FactSet were looking for 70 cents per share and $4.27 billion in revenue. Kohl’s also hiked its full-year outlook for sales and earnings.

Macy’s — The retail stock popped 21% after Macy’s third-quarter results beat estimates on the top and bottom lines. Gross margin for the quarter was 41.0%, up from 35.6% in the year-ago period, the company said.

Cisco Systems — Shares of the technology company dropped more than 7% in midday trading, dragging down the Dow Jones Industrial Average. On Wednesday, Cisco Systems issued next quarter earnings guidance at the low end of estimates. The company called for revenue growth between 4.5% and 6.5% in the fiscal second quarter, below estimates of 7.4%, according to Refinitiv. Fiscal first-quarter earnings beat expectations but revenue fell short of estimates.

Apple — Shares of the tech giant rose 2.5% and hit an all-time high after Bloomberg News reported that Apple is aiming to develop a car by 2025. The company wants the vehicle to be fully autonomous, according to the report.

Activision Blizzard — Shares of the video game publisher fell nearly 4% as Activision Blizzard continues to deal with the fallout from a report that its CEO mishandled allegations of sexual misconduct at the company. JPMorgan downgraded Activision Blizzard to neutral, saying in a note that investors should avoid the stock until the controversy is resolved.

BJ’s Wholesale — The retail stock surged 17% after BJ’s reported third-quarter results that were well ahead of expectations. The company reported an adjusted 91 cents in earnings per share and $4.26 billion in revenue. Analysts surveyed by Refinitiv were expecting 80 cents in earnings and $3.92 billion in revenue.

JD.com — The U.S.-traded shares of the Chinese e-commerce company rose 6.3% after JD.com’s third-quarter results beat estimates on the top and bottom lines. The company said net product revenues were up 23% year over year while net service revenues rose 43%.

Alibaba — Shares of the Chinese e-commerce giant tanked 9% in midday trading after missing revenue and earnings expectations for the September quarter, as slowing economic growth in China weighed on results, adding to regulatory headwinds.

Bath and Body Works, Victoria Secret — The two companies that formerly made up L Brands rose on Thursday following quarterly results. Shares of Bath and Body Works rose more than 7% after revenue topped expectations, while Victoria Secret jumped more than 16% after the company’s operating margin was stronger than expected, according to StreetAccount.

CVS — Shares of the drugstore chain rose 2.9% after the company said it will close about 900 stores over the next three years starting spring 2022. CVS said it will focus more of its efforts on digital growth and turning its stores into health-care destinations.

Oatly — The alternative milk stock rose more than 3% after Morgan Stanley upgraded Oatly to overweight. The investment firm said the stock was too cheap given the strong consumer environment.

Petco — The pet retailer saw its shares tumble nearly 11% despite a better-than-expected quarterly report on earnings and revenue. Petco’s gross margin did narrow year over year.