Unlike Palantir, C3.ai has seen the potential in the AI market long before it became a reality this year. They provide over 40 AI software solutions, from tools that can analyse banking transactions to a Customer Relationship Management system. Quantum computer manufacturer IonQ is a small player in the market but has recently quadrupled in value. Their most recent IonQ Forte quantum computer utilises cloud services, carving a niche in an AI-focused industry.

Joshua Warner, market analyst for City Index on which AI stocks to watch

NVIDIA

Joshua Warner, market analyst for City Index has says “NVIDIA’s shares have been undergoing a correction since peaking at all-time highs in July. We have seen the stock set lower highs since then to suggest we could be seeing a reversal, although the 7-week low hit a few days ago remained above the trough we saw in June.”

“A slip below $401 would mark a new lower-low, making this a key price to watch that could signal a reversal in fortunes. We can see buyers have happily returned to the market when the price has fallen from $401 to $406, having rejected a selloff below here on seven consecutive occasions in the last two months alone. Notably, we could see a potential head and shoulders pattern form if it sinks back toward this level, although it is too early to tell.”

Palantir

Joshua says “Palantir hopes to pivot its data-driven systems toward enhancing and accelerating existing AI models. Its shares have been undergoing their sharpest correction in over a year since hitting a 19-month high at the start of August, following the unsustainable rally we saw begin in early May.

“We can see that sellers have struggled to push the price below $15 without prompting buyers into action, suggesting this is currently providing support. It has slipped to as low as $14.60, but any move below here could trigger a sharper fall that could initially take it down to the June low of $13.60.”

“The stock will need to regain significant ground if it wants to set new highs and get back on the right path after the 19-month high of $20 proved to be too irresistible for sellers, which appear to have been gradually accepting lower prices throughout this month. The rise in volumes during the recent correction suggests a lot of selling pressure was relieved considering we have seen the price stabilise since volumes have fallen back to more normal levels.”

C3.ai

Joshua says “we saw C3.ai shares break the rally that saw it more than quadruple in value after it hit a 20-month high back in June, having set a lower high at the start of this month.

“We are now waiting to see whether it sets a lower low compared to the trough in June of $31.69. Interestingly, we saw a fierce battle between buyers and sellers last week (16th August) and neither side could gain the upper hand as the stock closed at the same price it opened ($31.69), which is also aligned with the 100-day moving average. This suggests strong demand on both sides at this level, although there have been reduced trading volumes over the past two months. A close below here could trigger a sharper decline, potentially toward $28.50 or possibly toward $25 if it comes under severe pressure.

“On the upside, a return above $37 will reclaim the floor held throughout July. It would then need to break $42.50 and then surpass the last high of $44 to show the bulls are back in charge.”

IonQ

Joshua says “IonQ’s shares almost quadrupled in value between the end of March and the 20-month high hit at the start of August. It has since undergone a steep correction, setting lower lows and lower highs to suggest a reversal could be on the cards as markets temper their lofty expectations.

“The stock is currently testing the 50-day moving average for the first time in over three months. It could continue to fall toward a range of $13.50 to $12.50, which was as low as sellers could push the price in July. Below here, we could see it slip back toward the ceiling of $11 that held throughout May and the majority of June.

“The stock would need to set a higher high and move back above $16.50 in order to show that buyers are back in control before the 20-month peak comes back into the crosshairs.”

What you should consider when trading AI stocks

Do:

Research Thoroughly: Study a company’s technology, market presence, and financial health before investing, so you know what you’re getting yourself into.

Diversify: Although trading individual AI stocks can provide better returns, it’s recommended that you don’t solely focus on one stock. Trading a basket of AI stocks requires less research and is less risky than trading individual stocks.

Focus on Innovation: Prioritise companies with genuine technological advancements.

Stay Informed: Keep up with AI developments, breakthroughs, and regulatory changes as well as broader economic trends, so you’re better informed.

Don’t: 

Chase Hype: Avoid investing solely based on popularity; actual value matters more.

Ignore Ethics: Be cautious of companies with questionable AI practices or reputations.

Put All Your Eggs in One Basket: Avoid concentrating your investments on a single AI stock.

Neglect Due Diligence: Don’t skip researching a company’s fundamentals and competitive landscape.

Overlook Regulations: Be mindful of how regulations can impact AI companies.

Disregard Economic Factors: Consider how broader economic conditions can affect the AI sector.”

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BNPL is a recent credit solution that has seen increasing popularity in New Zealand. It is attractive to consumers because it allows them to make purchases without needing to pay in full upfront, instead enabling them to spread the cost over a set period of time.

The post Debt burden: 90% Of BNPL users have other loans too appeared first on Small Business Connections.

The comments from deVere Group’s Nigel Green come despite hawkish comments made Monday by a Federal Reserve official.

James Bullard stated that the U.S. central bank needs to raise interest rates further and then hold them throughout next year and into 2024 to tame inflation and bring it back down toward the Fed’s 2% target.

The deVere CEO comments: “The dollar regained some ground following the hawkish tone from the Fed official who set out the case for more rate hikes.

“However, it’s our experience globally that investors are now moving to position their portfolios to capitalize on the likelihood of the U.S. dollar’s era of strength coming to an end by mid-2023.”

He continues: “The minutes of the last Fed meeting give a ‘heads up’ about where the central bank of the world’s largest economy is headed. It seems that the Federal Open Market Committee (FOMC) is heading toward stepping down to a 0.5 percentage point increase in December, following four consecutive 0.75 percentage point hikes.

“Against this backdrop, investors are now trimming bets on aggressive Fed tightening as inflation is gradually tamed, which means the dollar will not be as attractive.”

The strength of the dollar, which is measured by the U.S. dollar index (USDX), is relative to other currencies.

“The greenback has been all-powerful this year, up around 14% compared to a basket of currencies, because it’s still considered a safe-haven in times of market volatility,” continues Nigel Green.

“Almost all relative economies have raised interest rates, the Fed has raised them far higher, implementing one of the most aggressive rate hike cycles in modern history – primarily because the U.S. economy could withstand it.”

Whilst a strong dollar can benefit U.S. consumers as it makes imported goods cheaper and international travel typically becomes less expensive, it can have negative implications too.

“For U.S. companies, including most on the S&P 500, a strong dollar hits their foreign profits when moved back into dollars, putting corporate earnings under pressure,” affirms the deVere chief executive.

“Plus, their international competitiveness is at risk, as American products become more expensive abroad. At the same time, U.S. financial assets, such as stocks and bonds, become less attractive to global investors.”

In addition, both developed and emerging markets globally have been hit by a powerful greenback as it fuels inflation and raises the cost of imported goods. It has also added to the need for some central banks around the world to tighten their own financial conditions.

He concludes: “Always looking ahead, investors are now seriously looking at other currencies as the dollar’s strength appears to be waning.”

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The Top 10 Celebrity Investors with the Most Successful Investments:

4 female celebs feature in the top 20 most successful celebrity investors list with portfolios worth hundreds of millions, including Gwyneth Paltrow (portfolio worth $782M), Oprah (portfolio worth $736M), Serena Williams (portfolio worth $684M) and Natalie Portman (portfolio worth $657.69M).

Finance, cryptocurrency and software are the most popular industries to invest in amongst celebrity investors during 2022.

Mark Cuban is the celebrity with the most investments at a whopping 217 investments, followed by Ashton Kutcher in second place on our list with 67 investments.

Ashton Kutcher’s investment firm, Sound Ventures, is the most active celebrity investment firm. It has made 173 investments since it was founded in 2015, averaging almost 26 investments a year.

The most successful celebrity-owned business is Kanye West’s clothing brand, Yeezy, with an estimated worth of $5 billion. Kanye West’s ex-wife, Kim Kardashian takes second place with her shapewear clothing brand, SKIMS worth $3.2 billion.

*All dollar amounts in USD not AUD.

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Despite the effects of the global pandemic, a record amount of venture capital was invested into Australian startups, with 92 deals recorded so far this year.

The report points to US$439.7 million of venture capital investment in Australian startups over the April to June quarter in 2020, an increase of 38.5 percent compared to the same period in 2019 (US$317.5 million).

Globally, venture capital investment also continued to show resilience in the second quarter of 2020, reaching US$62.9 billion across 4,502 deals – almost equaling total investment from the first quarter of the year and only slightly off the pace seen in 2019’s second quarter, which registered US$69.8 billion invested.

Head of KPMG High Growth Ventures in Australia, Amanda Price said: “Australian startups have continued to attract record levels, despite the ongoing impact of the pandemic. This points to how lockdown has rapidly accelerated digital trends and increased the importance of digital business models and solutions, from B2B solutions to edtech and beyond. For example, globally B2B productivity solutions accounted for US$14.3 billion in VC investment over the past three months.”

“With some countries and territories opening up their economies, there will likely continue to be challenges with international travel and deal-making for some time. This is causing many VC investors to focus more on opportunities in their local markets — which could have a negative impact on some Australian growth stage companies currently looking for overseas funding. Q3’20 will likely show whether VC investment will withstand the full brunt of the pandemic’s impact, and whether Australian startups can turn the ongoing disruption and challenge of the pandemic into an opportunity,” she said.

Q2’20 highlights

• Global VC investment stayed relatively even from US$63.8 billion across 5,624 deals in Q1’20 to over US$62.9 billion across 4,502 deals in Q2’20. The US alone accounted for more than half of VC investment globally during Q2’20, with US$34.3 billion of investment across 2,197 deals. 
• At a regional level, the Americas led VC investment in Q2’20, with US$35.6 billion raised across 2,354 deals. Asia followed with US$16.9 billion raised across 1,011 deals, while Europe saw US$10.1 billion raised across 1,062 deals.
• The 5 largest deals this quarter occurred in the United States and China: California-based Waymo (US$3 billion), Shenzhen’s MGI Tech (US$1 billion), Hangzhou-based Didi Bike (US$1 billion), San Francisco-based Stripe (US$850 million) and Beijing-based Zuoyebang (US$750 million).
• Global first-time venture financings remained weak – seeing only US$10.2 billion invested across 2,439 deals in the first half of the year – well off last year’s pace of US$28.2 billion overall, across 7,490 financings.
• Global VC fundraising activity was strong at mid-year, with over US$60 billion already raised across 299 funds.

By KPMG Australia

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By Doug Ferguson and Helen Zhi Dent - KPMG

The post Chinese investment in Australia falls despite record bilateral trading year appeared first on Small Business Connections.

In net worth terms, that puts him behind two giant Chinese internet titans: Tencent chairman Ma Huateng (worth $46.4 billion) and Alibaba cofounder Jack Ma (worth $41.3 billion), whose companies were started in 1998 and 1999, respectively.

Pinduoduo stock has rocketed up over the past two months amid growing demand for online shopping during the coronavirus pandemic. The company is known for pioneering social e-commerce in China: Shoppers can get lower prices if they can find others who will buy items with them as a group. The model was a hit, attracting 100 million monthly active users to its platform in its first year. Active buyers in the twelve months ending March 31, 2020 climbed to 628 million people, compared to 443 million a year ago, while the average spending per buyer increased 47% to $260, the company said in its quarterly earnings report on Friday morning.

The company logged revenue of $923.8 million in the first quarter (through the end of March) — up 44% from the same period in 2019. Its net loss also widened to $582 million, up about 120% from the year before. 

However, investors seem bullish on Pinduoduo’s growth potential. The stock, which dropped to $31.77 per share on March 18 in the midst of the coronavirus-induced market crash, rebounded to close at a record of $68.70 per share on Friday. Huang, who owns a 45% stake in the firm, was the eighth richest person in China in mid-March, with a $16.5 billion net worth. 

“Covid-19 has unleashed powerful forces that are changing the way we live, work and play. It has compressed the years of the behavioural change and accelerated the adoption of online commerce at an unprecedented pace,” Huang said in Friday’s earnings call. “Our mission has never been more relevant or salient in these challenging times, which is to provide a fun and engaging environment for people to shop together and get the best value for their money.”

The firm rolled out livestreaming features to all its merchants in January, making it easier for consumers to purchase products like high-end jewellery or live seafood, which buyers prefer to see in person. It also held livestreaming fairs in agricultural hubs during the coronavirus pandemic to highlight locally produced specialties; the firm says the March fairs resulted in 49 million orders as of April 30th. Pinduoduo plans to invest $7 billion (RMB 50 billion) over the next five years to develop infrastructure to help farmers sell their products online. 

Pinduoduo’s growth comes at a time of renewed tension between China and the U.S. and concerns about U.S.-listed Chinese companies. On May 20, the U.S. Senate passed a bill that would allow the Securities and Exchange Commission to bar trading of any stock if the listed company’s auditing firm cannot be inspected by the Public Company Accounting Oversight Board for three consecutive years. Companies would also have to establish that they’re not owned or controlled by any foreign government. Though the new law applies to any firm on the U.S. stock exchanges, the move is largely seen as an aim at China, after Nasdaq-listed Luckin Coffee — a Chinese company — admitted to falsifying roughly $310 million of revenue in 2019. Its stock, which traded at over $50 per share in January, has moved to under $1.50 per share.

Pinduoduo founder Huang, a former Googler, holds a master’s degree in computer science from the University of Wisconsin at Madison. He interned at Microsoft as a student but decided to take a chance on Google instead after he graduated in 2004. “I didn’t choose to stay at Microsoft after graduation. Because first I could see what I would become at Microsoft ten years later,” Huang wrote in a 2016 blog post.

Huang started as a software engineer at the search engine giant, eventually becoming part of its initial China team when it expanded to the populous nation. He later struck out on his own, founding online game company Xinyoudi and e-commerce platform Ouku.com before making it big with Pinduoduo.

Written by: Jennifer Wang

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In the new business environment, digital solutions will increase in importance as businesses require the tools to work anywhere, anytime. Cloud-based automation systems have been the saviour for many small and medium businesses (SMBs) as they evolved to virtual operations. These systems have minimised the workload for finance teams, as well as provided essential visibility and control into outgoing spend.

Fabian Calle, general manager, small to medium business, ANZ, SAP Concur said, “Many SMBs who previously relied on manual processes are now recognising its gaps and barriers. Cloud-based automation solutions have provided businesses with greater flexibility, and have eliminated hours of admin processing and employee frustration. 

“Finance teams have benefited particularly, as automation has provided an opportunity for better cash flow management. It offers a centralised place to manage spend, providing the visibility needed to see spend before it happens. More control is allowed via finance policies and a seamless invoice and expense approval process.”

SAP Concur has provided four key strategies to help SMBs manage their cash flow in the new business environment:

1. Implement policy that supports a remote workforce to control outgoing spend

Develop a new employee expense policy that is clear and easy for employees to understand, while also being comprehensive enough to minimise spend risk.

2. Give employees the tools they need to work productively while remote

A productive and engaged workforce is essential right now. Working remotely has its challenges, so businesses should provide employees with everything they need to remain productive. Having the right tools is critical for employee morale, productivity and performance. Delayed adoption of digital systems can have an impact on the most important part of the business, cash flow.

3. Get better visibility into outgoing spend before it happens

Don’t fall behind on accounts payable; ensure steady cash flow and resilience against any business changes by increasing visibility into what is about to be spent.

4. Use technologies to eliminate manual processes

A cloud-based solution for spend allows finance team to access, approve and submit spend from anywhere, at any time. Organisations should find a solution that will provide a complete suite of tools for employees to manage their expenses and invoices, regardless of location or device. 

Fabian Calle said, “As businesses return to the office, the analogue business world will have changed forever. Proactive business owners are recognising the limitations of their current processes and assessing how they can set themselves up for future success. The future of the workforce is trending towards sustained remote work, and the future of work is digital.

“To help SMBs navigate this change, SAP Concur has developed a webinar series to talk about issues relating to working towards a ‘new normal’. As businesses adapt to  the new business environment, it can be comforting to recognise that we are all in this together and to gain advice from leaders in the field.”

The post Four tips on how to manage cash flow during uncertainties for SMBs appeared first on Small Business Connections.

The Consumer Sentiment Study was an online survey of 11,390 Australian consumers nationally, with field work conducted in three parts across 24-27 April. The data-lead study has uncovered some interesting insights:

OUR FINANANCIAL HEALTH

• Half of all Australian shoppers are concerned about having enough money for their weekly shop.
• Personal income is a concern for 30 per cent of shoppers, who feel less well off financially than before the pandemic.

IN THE HOME

• Half of shoppers admit they are now changing the way they stock their pantries, with plans to keep them well stocked post-pandemic, specifically in food and hygiene goods, to avoid any potential future shortages.
• Australian shoppers are increasingly turning to cooking meals at home when compared to the same time last year, with 32 per cent of shoppers declaring a “newfound obsession with cooking.”
• Some 46 per cent of Australians are now creating more meals from scratch with the key drivers being a simpler life and desire to get back to basics.
• But there is still those in search of convenience, with 32 per cent buying more ready-made meals from the supermarket

SHOPPING CHOICES

• Sixty per cent of Australians have purchased more supermarket home brands in place of their traditional brand choices.
• Some 45 per cent of Australian shoppers are showing they are more financially savvy with increased visitation to an Aldi supermarket during the pandemic in search of cheaper brands.
• There is still a high level of brand devotees, with 64 per cent of shoppers admitting to regularly visiting at least two supermarkets to purchase the branded products that they would normally buy.
• Price remains the most important consideration factor when purchasing FMCG goods, followed by the “brands they trust/well-known brands”.
• Some categories are more susceptible to switching brands when favourite or popular brands are out of stock, such as soft drinks and water, fruit and vegetables (e.g. tinned or packaged) and bread and cereals.

Karissa Fletcher, Head of Marketing at Shopper Media, said, ”Shopper Media undertook the Consumer Sentiment Study because its real-time daily data in March and April showed a fluctuation in footfall in local centres across Australia due to stockpiling, restrictions to non-essential retail and increased shopping ahead of the Easter weekend. Footfall figures surpassed Christmas crowds in early March but began to soften and in recent weeks have steadied, now showing signs of growth as restrictions begin to lift.

“Our centres have also seen the average dwell time increase by 25 per cent in over 30 per cent of our network of shopping centres nationally, so we wanted to get an accurate understanding of shoppers’ attitudes as restrictions lift. What has been unchanged throughout is that local shopping centres remain the destination for essential retail for Australian consumers.

“Shopper Media utilises market-leading technology that is 100 per cent digital, and with MIST Wi-Fi in our centres we are able to collect first-party data. This enables us to know exactly what is happening in every one of our shopping centres in real time, setting us apart from our competitors. With access to daily data and the ability to ask shoppers real-time questions, we are not providing averages, assumptions or approximations for third-party sources, we are capturing and identifying real-time data insights into consumer shopping behaviours and attitudes, as revealed by the Consumer Sentiment Study.”

“What is evident from the study is Australians are looking to get back to basics and hold on to the simplicity they have enjoyed during COVID-19 restrictions. Local, homemade and sustainably sourced items that are discounted or moderately priced will be most desirable, and it’s not a time for brands to be complacent with shoppers seeking price comparisons. It’s a time to remind shoppers of the benefits and emotional connection they have with the brand as they review and juggle the changes to personal and household income,” added Fletcher.

Written by: Jane Morey – Director Morey Media

The post Home Cooking Soars as Aussies lockdown & watch purse strings appeared first on Small Business Connections.

Household consumption and business and dwelling investment are all forecast by Treasury to fall sharply in the June quarter. The combination of social distancing, lower incomes and increased uncertainty are weighing heavily on aggregate demand and flowing through to reduced cash flow.

Household consumption is expected to be around 16 per cent lower. Business investment is expected to be around 18 per cent lower with falls concentrated in the non‑mining sector. Dwelling investment is also expected to be around 18 per cent lower.

Over the same period, household savings are expected to increase as a result of the restrictions that have been imposed and an understandably cautious approach by households to discretionary spending.

Overall, the economic data has been sobering. In March, business and consumer confidence saw the largest declines on record. The ASX200 lost more than a third of its value in just over four weeks.

In April, surveys showed that job ads halved and activity in the construction, manufacturing and the services sector had their largest ever monthly falls. New motor vehicle sales fell by 48 per cent through the year, their largest ever fall. House sales fell by 40 per cent. Domestic and international air travel is down by more than 97 per cent, with nearly 40,000 passengers moving through Brisbane airport on Easter Sunday last year, compared to just 31 passengers this year.

Against this backdrop, between the 14th of March and the 18th of April the number of jobs decreased by 7.5 per cent and the wages bill paid by businesses decreased by 8.2 per cent. During this period, accommodation and food services saw the largest fall in jobs at 33.4 percent, followed by the arts and recreation sector at 27 per cent.

The scale of the economic shock is hitting the budget bottom line. The monthly financial statements for March provide the most recent report on the Budget position. To the end of March, the underlying cash deficit was $22.4 billion, $9.9 billion higher than forecast in MYEFO.

Tax receipts were $11.3 billion lower than forecast in MYEFO. While payments to the end of March were still $1.4 billion lower than in the MYEFO profile, this will change from the next statement onwards as the measures we have implemented continue to ramp up.

Since MYEFO, the total face value of Australian Government Securities on issue has increased by more than $50 billion from $560 billion to $618 billion as of 8 May 2020. An updated economic and fiscal outlook will be provided in June, following the release of the March quarter National Accounts with the Budget to be delivered in October.

In accordance with the requirements of the Charter of Budget Honesty I am tabling this Ministerial Statement to set out the reason for the increase in borrowings. The unprecedented speed and scale of the Government’s economic response has driven a rapid increase in borrowings.

While there will be a significant increase in Government debt which will take many years to repay, our measures have been designed in a way that protect the structural integrity of the budget.

Australians know there is no money tree. What we borrow today, we must repay in the future.

Temporary and targeted, the new spending measures were not designed to go forever but to build a bridge to the recovery phase. As Standard & Poor’s stated less than four weeks ago, while the Government’s fiscal measures will “weigh heavily on public finances in the immediate future, they won’t structurally weaken Australia’s fiscal position.”

With $320 billion, or 16.4 per cent of GDP in financial support, our focus is getting the country through the crisis and positioning the economy to recover on the other side.

This has only been possible because of the position of strength from which we entered the crisis. Growth had risen from 1.8 per cent to 2.2 per cent in the December quarter and the IMF was forecasting the Australian economy to grow faster than the United States, United Kingdom, Japan, France and Germany in both 2020 and 2021.

The unemployment rate fell in February to 5.1 per cent, with the participation rate at near record highs against the backdrop of 1.5 million new jobs being created over the last six years. After inheriting a budget deficit of $48.5 billion, the budget was back in balance for the first time in 11 years and despite the adverse economic impacts from the global trade tensions, fires, floods and drought, we were on track for the first surplus in 12 years.

Our ability to handle this crisis has once again reminded Australians of the importance of a strong and stable financial position which must always be a primary responsibility of government. The proven path for paying back debt is not through higher taxes, which curtails aspiration and investment, but by growing the economy through productivity enhancing reforms.

Our focus will be on practical solutions to the most significant challenges which will be front and centre in the post-crisis world.

Reskilling and upskilling the workforce, maintaining our $100 billion, ten-year infrastructure pipeline, cutting red tape to reduce the cost burden on businesses and the economy and tax and industrial relations reform as a means of increasing our competitiveness.

The values and principles that have guided Coalition reforms in the past must guide us again in the future: encouraging personal responsibility; maximising personal choice; rewarding effort; and risk taking whilst ensuring a safety net which is underpinned by a sense of decency and fairness.

Unleashing the power of dynamic, innovative, and open markets must be central to the recovery, with the private sector leading job creation, not government.

We know that a strong economy is the foundation for everything else, and only with a strong economy can you provide the health, education, and essential services that Australians rely on.

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