Congress Shines the Light on Facebook’s Libra and Digital Currency Regulation

Bottom Line: Nearly a month after Facebook (NASDAQ: FB) revealed the details of its ambitious digital currency project, Libra, company executive David Marcus faced tough questions in 2 days of congressional hearings. With Congress, the treasury secretary and even the president weighing in on the social media company’s plans for the digital currency and cryptocurrencies like Bitcoin, regulatory clarity may finally be on its way for the evolution of money.

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Alibaba Approves Share Split in Preparation for Hong Kong IPO

Bottom Line: Alibaba (NYSE: BABA) shares will split be 1:8 sometime before July 2020 as agreed to in a recent shareholder meeting. The company indicated that this would “increase flexibility in the Company’s capital raising activities, including the issuance of new shares.”  Given the continuing saga of the U.S.-China trade war and the recently loosened rules regarding share class structure on the Hong Kong exchange, it seems likely Alibaba is getting ready to cash in on another IPO.

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Open Data Initiative Starting to Pay Off for Microsoft, Adobe and SAP

Bottom Line: In September last year, Microsoft (NASDAQ: MSFT), Adobe (NASDAQ: ADBE) and SAP (NYSE: SAP) announced the Open Data Initiative (ODI). The ODI is a partnership between the software behemoths to let their customers combine data from the respective systems into a central repository with Artificial Intelligence capabilities for further insights. While SAP recently had a disappointing Q2 earnings, their cloud revenue was up 35%, whereas Microsoft just crushed expectations on their Q2 earnings and Adobe continues to post strong results as well.

SAP, Microsoft and Adobe Year to Date Performance

SAP MSFT ADBE Performance YTD - July 19 2019

Source: Yahoo Finance

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Automakers Partnering on Self-Driving and Electric Vehicles

Bottom Line: Ford (NYSE: F) and Volkswagen have solidified their partnership on autonomous and electric vehicles with a $2.6 billion investment in Argo AI. The investment comes in the form of $1 billion cash and merging Volkswagen’s Autonomous Intelligent Driving group with Argos. The thinking from the automakers is that automation and electrification won’t be product differentiators in our robot-chauffeured future so combining efforts will help save costs.  Uber, who are spending nearly $0.5 billion/year on their autonomous driving efforts and going it pretty much on their own, clearly think differently.

Lyft IPO AV

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5G Networks Aren’t Ready for Prime Time… Yet

Bottom Line: Mobile carriers, phone makers and network equipment manufacturers are getting set for the next generation of network that will promise the bandwidth to cover every buzzwordy tech flavour of the month from the Internet of Things (IoT) to Autonomous Vehicles. Oh, and you’ll be able to download Netflix shows super fast. With early pilots and equipment available now, tests have shown that the technology still has some ways to go before it’s ready for the general public. 5G is however, one area where the U.S. is keeping pace with the fast moving Chinese tech scene.

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Tech Investing Chart of the Week

Technology as a sector continues to outpace the broader markets this year with returns of over 30% YTD compared to the S&P 500 at just under 20% and the NASDAQ Composite return of 23%.

Year to Date Performance of Tech Stocks vs. Broader Markets

Year to Date Performance of Tech Stocks vs. Broader Markets - July 19 2019

Source: Yahoo Finance

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