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Amazon pursues MGM, cryptocurrency thrill ride continues Tuesday

Written By | May 25, 2021
Amazon, Apple, cryptocurrency

Amazon Spheres from the Sixth Street side, Seattle, Washington, U.S. Via Wikipedia entry on Amazon. Photo by Joe Mabel.  Creative Commons Attribution-Share Alike 4.0 International.

WASHINGTON –After an impressively bullish start, US stocks faded somewhat by Monday’s closing bell. Picking up Tuesday morning, stocks quickly plummeted again. News items influencing this week’s market action continue to include Amazon’s pursuit of MGM Studios, oil pricing, and, of course, the latest fashionable thrill ride on the cryptocurrency Hindenburg to oblivion.

CNBC provides more color.

“U.S. stocks wiped out earlier gains and turned negative gained on Tuesday as the market struggled for a direction.

“The S&P 500 last traded 0.2% lower, dragged down by the energy sector. The tech-heavy Nasdaq Composite dipped 0.2%. The Dow Jones Industrial Average traded 60 points lower.

“Big Tech shares Amazon, Apple, Netflix and Alphabet all erased earlier advance and dipped into negative territory.”

The bipolar Tuesday morning action continues as of the noon hour today. Stocks opened sharply higher, then tanked again as insanely-leveraged cryptocurrency trades continued to dominate individual and corporate investment themes.

Techs, which had recovered somewhat Monday, opened up Tuesday. Then, they did an about face as Washington, D.C.’s Attorney General Karl Racine filed an antitrust suit against Amazon (NASDAQ:AMZN), according to a Reuters report. The suit claims unfair treatment of third party sellers in Amazon’s online store.

After a Monday rally inspired by its alleged MGM acquisition, Amazon hits the skids

Up most of the morning after a big Monday and driven skyward by news of its likely acquisition of MGM, Amazon shares sharply reversed direction after the antitrust news Tuesday. Ditto  shares of Apple (NASDAQ:AAPL). The iPhone and iMac creator is under a similar attack in the private sector over its allegedly unfair treatment of at least one videogame vendor in Apple’s app store market. That case has already gone to trial. Looks like trustbusting, dormant for a century, has begun to rise from its early 20th century grave.

Airline and cruise company revivals fail to inspire the oil patch

Back to CNBC.

“Airlines and cruise lines provided the broader market with some support. United Airlines jumped 3% after the carrier said yields on domestic leisure tickets purchased this month topped 2019 levels amid the reopening. Boeing also gained 1.7%. Norwegian Cruise Line [NYSE:NCLH] and Royal Caribbean [NYSE:RCL] rose more than 4% each.”

Those negative moves seem ironic, since oil and gas stocks are busy doing serial faceplants today. You’d think the fuel sector would be bullish today, given the imminent revival of the airline and cruise industries, both considerable users of refined oil products. But for some reason, you would be wrong. Logic is not working in this environment.

Cryptocurrency nonsense continues to dominate markets

Think Amazon and Apple are becoming unreliable? How about that Bitcoin mania, which has already gotten way out of hand. I happen to hate this stuff as there is no objective way whatsoever to determine its value and, therefore, it’s purchasing power on any given day. Here’s at least part of the reason why.

“Bitcoin’s recent rout, which has hit tech stocks like Tesla [NASDAQ:TSLA] and dented overall investor sentiment, stabilized on Monday. The cryptocurrency was back near $38,000 early Tuesday after falling below $32,000 at one point on Sunday. Crypto prices rebounded as Elon Musk said he was having discussions with bitcoin miners regarding sustainability.

“Tesla, a big holder of bitcoin, fell 1.5%. Crypto-exchange Coinbase gained 4% with the shares also getting a boost from a JPMorgan buy call.”

Holy Moly! Even JP Morgan has stumbled into the crypto idiot pit. Abandon all hope, ye who enter here…

Market manipulation? Ask Elon…

The insanity and froth in this current market environment, kicked off by exogenous events and further juiced by those Apple and Amazon suits, is now aided and abetted by Vegas-style betting on cryptocurrencies. These “currencies” have no logical, legal, or agreed-upon methodology for price validation. So they’re subject to wild manipulation. The bizarre and volatile action in this arena continues to make the “sell in May” cliché look like good advice at this point.

And BTW, Elon Musk’s self-serving cryptocurrency tweets are vastly more damaging to markets than Donald Trump’s occasionally intemperate tweets ever were. Musk’s public opining appears to be and actually is market manipulation. But heck, he’s rich, so the SEC looks the other way. There really is a two-tier justice system in this country. But the victims aren’t always the ones favored by the professional left.

Too much leverage in the cryptocurrency trade. Guess what happens next?

Much of today’s cryptocurrency trade is highly leveraged, according to several sources. And as we saw with earlier private fund and hedge fund failures in the first and second quarters of 2021, should this leveraged trade go the wrong way, forced liquidations could pound stocks yet again. Subsequently, this could lead to sudden, huge losses on the part of average investors who’ve only been looking for stability in this brave new Biden Age of Uncertainty. As a result of the continuing chaos, we continue to lighten up on our own holdings, booking nice gains and the occasional small loss as we raise more cash.

Are the nation’s bigwig elites jumping the investment shark in Q2 2021?

Stocks, bonds and average US citizens alike are beginning to sense that official Washington has become like a huge vessel without a rudder. Aimlessly floating about with a pro-oligarch, fake-socialist attitude, the Federal government ship could strike and sink nearly everything in its path right now, and investors are getting nervous. If some of the ongoing nonsense jumps the investment shark, which it seems to be doing, who knows what kind of nasty hit our portfolios may endure, simply as collateral damage to another big Federal Mistake?

We’ll try to keep an eye on this out-of-control nonsense, and will update you on anything that’s, well… more out of the ordinary than usual. Let’s all play things cautiously here. If even Apple and Amazon are becoming too treacherous to invest in, what’s next? Who knows? But one thing is fore sure: The Federal ship of state is currently sailing without a captain. And the first mate remains AWOL.


Terry Ponick

Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Senior Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17