Equity traders forced to reconsider risky bets

US stock markets extended their declines last week as better than expected economic data paired with a hotter than anticipated PCE print prompted traders to divert inflows towards the dollar and opt for a risk on approach. The results practically indicated that the state of the US economy can currently facilitate further restrictive actions from the Fed, which remains resolute at its efforts of bringing inflation back down to an acceptable level. Bond yields have risen as a response to reflect the markets’ view for tighter financial conditions, broadcasting worries that the central bank’s hawkish march onwards could pose as a structural integrity risk of the US economy. In this report we aim to present the latest news regarding the tech behemoth Meta Platforms and conclude with a technical analysis.

Meta joins the AI race

Meta Platforms (#META) has made the headlines last month when it announced its launch for a paid subscription plan, where it would allow Facebook and Instagram users to verify their accounts for some premium features. The Meta Verified feature allows in a sense users to get a blue badge, similar to the Twitter’s blue verification tick, which according to the company’s CEO Mark Zuckerberg aims at providing “extra impersonation protection against accounts claiming to be you”. The verification process requires the provision of a government approved ID to authenticate an account, which sparked major outrage in online communities for data privacy concerns. The monthly subscription fee amounts to $14.99 and verified users would also get access to more features such as “increased visibility and reach” alongside “direct access to customer support”. Analysts see Meta’s move as another attempt to make up the lost ground from last year’s decision by Apple to enforce privacy changes, which restricted the provision of users’ tracking data, thus capping advertisers’ ability to deliver targeted ads. The estimated loss from advertising income from 2022 was said to be around $10bn according to the company’s estimates. Doubling down its attempts to circumvent Apple’s data tracking restrictions, the social media giant is now reportedly attempting to overhaul its advertising technology capabilities by applying and integrating artificial intelligence and machine learning functions to its systems. According to Meta officials the new feature called Advantage+ uses AI to generate multiple adverts akin to the specific targets of the marketer, with the use of algorithms and seeks to optimize the advertising campaign for optimal revenue generation and visibility. Some marketers however, expressed concerns about handing over control of their campaigns to the social media company, calling the tool as “mechanistic”, which lacks human emotion and common sense, while others see the service as a liberating function which could open the door for more creative advertising strategies. Nevertheless, the push for an AI-infused experience from Meta can be seen as another necessary development for ensuring its survival in the newly emerged race for superiority, as the AI genie has been unleashed from its bottle.

기술적 분석

#FB Daily Chart

Support: 167.70 (S1), 155.30 (S2), 142.00 (S3)

Resistance: 180.50 (R1), 196.50 (R2), 213.00 (R3)

Looking at #FB Daily chart we observe Meta kickstarting the year with solid positive momentum, riding the wave to higher ground but then hit a ceiling near the $200 range which cause it to retrace, finding support near the $167.70 (S1) level. We hold a bullish outlook bias for the equity given the ascending trendline and supporting our case is the RSI indicator below our daily chart which registers a reading of 67, showcasing positive sentiment is still in favour of Meta. Should the bulls reign over, we may see the stock breaking the 180.50 (R1) resistance line and head to higher ground, towards the 196.50 (R2) resistance barrier. Should on the other hand, the bears take over, we may see the break below the 167.70 (S1) support level and the move close to the 155.30 (S2) support base.

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