Retail Sales For June Provide An Early Boost, But Bond Yields Mostly Calling The Shots

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The first week of earnings season wraps up with major indices closely tracking the bond market in Wall Street’s version of “follow the leader.” Earnings absolutely matter, but right now the Fed’s policies are maybe a bigger influence. In the short-term the Fed is still the girl everyone wants to dance with.

Lately, you can almost guess where stocks are going just by checking the 10-year Treasury yield, which often moves on perceptions of what the Fed might have up its sleeve. The yield bounced back from lows this morning to around 1.32%, and stock indices climbed a bit in pre-market trading. That was a switch from yesterday when yields fell and stocks followed suit. Still, yields are down about six basis points since Monday, and stocks are also facing a losing week.

It’s unclear how long this close tracking of yields might last, but maybe a big flood of earnings due next week could give stocks a chance to act more on fundamental corporate news instead of the back and forth in fixed income. Meanwhile, retail sales for June this morning basically blew Wall Street’s conservative estimates out of the water, and stock indices edged up in pre-market trading after the data.

Headline retail sales rose 0.6% compared with the consensus expectation for a 0.6% decline, and with automobiles stripped out, the report looked even stronger, up 1.3% vs. expectations for 0.3%. Those numbers are incredibly strong and show the difficulty analysts are having in this market. The estimates missed consumer strength by a long shot. However, it’s also possible this is a blip in the data that might get smoothed out with July’s numbers. We’ll have to wait and see.

Caution Flag Keeps Waving

Yesterday continued what feels like a “risk-off” pattern that began taking hold earlier in the week, but this time Tech got caught up in the selling, too. In fact, Tech was the second-worst performing sector of the day behind Energy, which continues to tank on ideas more crude could flow soon thanks to OPEC’s agreement.

We already saw investors embracing fixed income and “defensive” sectors starting Tuesday, and Thursday continued the trend. When your leading sectors are Utilities, Staples, Real Estate, the way they were yesterday, that really suggests the surging bond market’s message to stocks is getting read loudly and clearly.

This week’s decline in rates also isn’t necessarily happy news for Financial companies. That being said, the Financials fared pretty well yesterday, with some of them coming back after an early drop. It was an impressive performance and we’ll see if it can spill over into Friday.

Energy helped fuel the rally earlier this year, but it’s struggling under the weight of falling crude prices. Softness in crude isn’t guaranteed to last—and prices of $70 a barrel aren’t historically cheap—but crude’s inability to consistently hold $75 speaks a lot. Technically, the strength just seems to fade up there. Crude is up slightly this morning but still below $72 a barrel.

Losing Steam?

All of the FAANGs lost ground yesterday after a nice rally earlier in the week. Another key Tech name, chipmaker Nvidia (NVDA), got taken to the cleaners with a 4.4% decline despite a major analyst price target increase to $900. NVDA has been on an incredible roll most of the year.

This week’s unexpectedly strong June inflation readings might be sending some investors into “flight for safety” mode, though no investment is ever truly “safe.” Fed Chairman Jerome Powell sounded dovish in his congressional testimony Wednesday and Thursday, but even Powell admitted he hadn’t expected to see inflation move this much above the Fed’s 2% target.

Keeping things in perspective, consider that the S&P 500 Index (SPX) did power back late Thursday to close well off its lows. That’s often a sign of people “buying the dip,” as the saying goes. Dip-buying has been a feature all year, and with bond yields so low and the money supply so huge, it’s hard to argue that cash on the sidelines won’t keep being injected if stocks decline.

Two popular stocks that data show have been popular with TD Ameritrade clients are Apple (AAPL) and Microsoft (MSFT), and both of them have regularly benefited from this “dip buying” trend. Neither lost much ground yesterday, so if they start to rise today, consider whether it reflects a broader move where investors come back in after weakness. However, one day is never a trend.

Reopening stocks (the ones tied closely to the economy’s reopening like airlines and restaurants) are doing a bit better in pre-market trading today after getting hit hard yesterday.

In other corporate news today, vaccine stocks climbed after Moderna (MRNA) was added to the S&P 500. BioNTech (BNTX), which is Pfizer’s (PFE) vaccine partner, is also higher. MRNA rose 7% in pre-market trading.

Strap In: Big Earnings Week Ahead

Earnings action dies down a bit here before getting back to full speed next week. Netflix (NFLX), American Express (AXP), Johnson & Johnson (JNJ), United Airlines (UAL), AT&T (T), Verizon (VZ), American Airlines (AAL) and Coca-Cola (KO) are high-profile companies expected to open their books in the week ahead.

It could be interesting to hear from the airlines about how the global reopening is going. Delta (DAL) surprised with an earnings beat this week, but also expressed concerns about high fuel prices. While vaccine rollouts in the U.S. have helped open travel back up, other parts of the globe aren’t faring as well. And worries about the Delta variant of Covid don’t seem to be helping things.

Beyond the numbers that UAL and AAL report next week, the market may be looking for guidance from their executives about the state of global travel as a proxy for economic health. DAL said travel seems to be coming back faster than expected. Will other airlines see it the same way? Earnings are one way to possibly find out.Even with the Delta variant of Covid gaining steam, there’s no doubt that at least in the U.S, the crowds are back for sporting events.

For example, the baseball All-Star Game this week was packed. Big events like that could be good news for KO when it reports earnings. PepsiCo (PEP) already reported a nice quarter. We’ll see if KO can follow up, and whether its executives will say anything about rising producer prices nipping at the heels of consumer products companies.

Confidence Game: The 10-year Treasury yield sank below 1.3% for a while Thursday but popped back to that level by the end of the day. It’s now down sharply from highs earlier this week. Strength in fixed income—yields fall as Treasury prices climb—often suggests lack of confidence in economic growth.

Why are people apparently hesitant at this juncture? It could be as simple as a lack of catalysts with the market now at record highs. Yes, bank earnings were mostly strong, but Financial stocks were already one of the best sectors year-to-date, so good earnings might have become an excuse for some investors to take profit. Also, with earnings expectations so high in general, it takes a really big beat for a company to impress.

Covid Conundrum: Anyone watching the news lately probably sees numerous reports about how the Delta variant of Covid has taken off in the U.S. and case counts are up across almost every state. While the human toll of this virus surge is certainly nothing to dismiss, for the market it seems like a bit of an afterthought, at least so far. It could be because so many of the new cases are in less populated parts of the country, which can make it seem like a faraway issue for those of us in big cities. Or it could be because so many of us are vaccinated and feel like we have some protection.

But the other factor is numbers-related. When you hear reports on the news about Covid cases rising 50%, consider what that means. To use a baseball analogy, if a hitter raises his batting average from .050 to .100, he’s still not going to get into the lineup regularly because his average is just too low. Covid cases sank to incredibly light levels in June down near 11,000 a day, which means a 50% rise isn’t really too huge in terms of raw numbers and is less than 10% of the peaks from last winter. We’ll be keeping an eye on Covid, especially as overseas economies continue to be on lockdowns and variants could cause more problems even here. But at least for now, the market doesn’t seem too concerned.

Dull Roar: Most jobs that put you regularly on live television in front of millions of viewers require you to be entertaining. One exception to that rule is the position held by Fed Chairman Jerome Powell. It’s actually his job to be uninteresting, and he’s arguably very good at it. His testimony in front of the Senate Banking Committee on Thursday was another example, with the Fed chair staying collected even as senators from both sides of the aisle gave him their opinions on what the Fed should or shouldn’t do. The closely monitored 10-year Treasury yield stayed anchored near 1.33% as he spoke.

Even if Powell keeps up the dovishness, you can’t rule out Treasury yields perhaps starting to rise in coming months if inflation readings continue hot and investors start to lose faith in the Fed making the right call at the right time. Eventually people might start to demand higher premiums for taking on the risk of buying bonds. The Fed itself, however, could have something to say about that.

It’s been sopping up so much of the paper lately that market demand doesn’t give you the same kind of impact it might have once had. That’s an argument for bond prices continuing to show firmness and yields to stay under pressure, as we’ve seen the last few months. Powell, for his part, showed no signs of being in a hurry yesterday to lift any of the stimulus.

TD Ameritrade® commentary for educational purposes only. Member SIPC.

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I am Chief Market Strategist for TD Ameritrade and began my career as a Chicago Board Options Exchange market maker, trading primarily in the S&P 100 and S&P 500 pits. I’ve also worked for ING Bank, Blue Capital and was Managing Director of Option Trading for Van Der Moolen, USA. In 2006, I joined the thinkorswim Group, which was eventually acquired by TD Ameritrade. I am a 30-year trading veteran and a regular CNBC guest, as well as a member of the Board of Directors at NYSE ARCA and a member of the Arbitration Committee at the CBOE. My licenses include the 3, 4, 7, 24 and 66.

Source: Retail Sales For June Provide An Early Boost, But Bond Yields Mostly Calling The Shots

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Critics:

Retail is the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit. Retailers satisfy demand identified through a supply chain. The term “retailer” is typically applied where a service provider fills the small orders of many individuals, who are end-users, rather than large orders of a small number of wholesale, corporate or government clientele. Shopping generally refers to the act of buying products.

Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping and browsing: it does not always result in a purchase.

Most modern retailers typically make a variety of strategic level decisions including the type of store, the market to be served, the optimal product assortment, customer service, supporting services and the store’s overall market positioning. Once the strategic retail plan is in place, retailers devise the retail mix which includes product, price, place, promotion, personnel, and presentation.

In the digital age, an increasing number of retailers are seeking to reach broader markets by selling through multiple channels, including both bricks and mortar and online retailing. Digital technologies are also changing the way that consumers pay for goods and services. Retailing support services may also include the provision of credit, delivery services, advisory services, stylist services and a range of other supporting services.

Retail shops occur in a diverse range of types of and in many different contexts – from strip shopping centres in residential streets through to large, indoor shopping malls. Shopping streets may restrict traffic to pedestrians only. Sometimes a shopping street has a partial or full roof to create a more comfortable shopping environment – protecting customers from various types of weather conditions such as extreme temperatures, winds or precipitation. Forms of non-shop retailing include online retailing (a type of electronic-commerce used for business-to-consumer (B2C) transactions) and mail order

Netflix And Boeing Among Today’s Trending Stocks

According to a report from the Washington Post dropped June 12, 1-year inflation is up 5%, while 2-year inflation sits around 5.6%. This has impacted everything from raw materials like lumber and glass to manufactured products. Used cars are up 29.7% in the last year, while gas has shot up over 56%, and washing machines and dryers sit up around 26.5%.

This comes as the global microchip shortage compounds retailers’ problems as they struggle to automate their supply chains. And while the economy (and the stock market) is certainly rebounding from covid-era recession pressures, consumers are stuck footing high-priced bills as both demand and the cost of materials continue to rise. Still, the Fed maintains that prices should stabilize soon – though “soon” may mean anywhere from 18-24 months, according to consulting firm Kearney.

Until then, investors will have to weigh their worries about inflation on the equities and bonds markets against the growing economy to decide which investments have potential – and which will see their returns gouged by rising prices across the board. To that end, we present you with Q.ai’s top trending picks heading into the new week.

Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.

Netflix, Inc (NFLX)

First up on our trending list is Netflix, Inc, which closed at $488.77 per share Friday. This represented an increase of 0.31% for the day, though it brought the streaming giant to down 9.6% for the year. The company has experienced continual losses for the past few weeks, with Friday ending below the 22-day price average of $494 and change. Currently, Netflix is trading at 47.1x forward earnings.

Netflix, Inc. trended in the latter half of last week as the company opened a new e-commerce site for branded merchandise. Currently, the store’s offerings are limited to a few popular Netflix tv shows, but the company hopes to increase its branded merchandise branded to shows such as Lupin, Yasuke, Stranger Things, and more in the coming months. With this latest move, the company hopes to expand its revenue channels and compete more directly with competitors such as Disney+.

In the last fiscal year, Netflix saw revenue growth of 5.6% to $25 billion compared to $15.8 billion three years ago. At the same time, operating income jumped 21.8% to $4.585 billion from $1.6 billion three years ago. And per-share earnings jumped almost 36% to $6.08 compared to $2.68 in the 36-month-ago period, while ROE rose to 29.6%.

Currently, Netflix is expected to see 12-month revenue around 3.33%. Our AI rates the streaming behemoth A in Growth, B in Quality Value and Low Volatility Momentum, and D in Technicals.

The Boeing Company (BA)

The Boeing Company closed down 0.43% Friday to $247.28, trending at 9.93 million trades on the day. Boeing has fallen somewhat from its 10-day price average of $250.67, though it’s up over the 22-day average of $240 and change. Currently, Boeing is up 15.5% YTD and is trading at 180.1x forward earnings.

The Boeing Company has trended frequently in recent weeks as the airplane manufacturer continues to take new orders for its jets, including the oft-beleaguered 737 MAX. United Airlines is reportedly in talks to buy “hundreds” of Boeing jets in the next few months, while Southwest Airlines is seeking up to 500 new aircraft as it expands its U.S. service. Alaskan Airlines, Dubai Aerospace Enterprise, and Ryanair have also placed orders for more Boeing jets heading into summer.

Over the last three fiscal years, Boeing’s revenue has plummeted from $101 billion to $58.2 billion, while operating income has been slashed from $11.8 billion to $8.66 billion. At the same time, per-share earnings have actually grown from $17.85 to $20.88.

Boeing is expected to see 12-month revenue growth around 7.5%. Our AI rates the airline manufacturer B in Technicals, C in Growth, and F in Low Volatility Momentum and Quality Value.

Nvidia Corporation (NVDA)

Nvidia Corporation jumped up 2.3% Friday to $713 per share, trending with 10.4 million trades on the books. Despite its sky-high stock price, Nividia has risen considerably from the 22-day price average of $631.79 – up 36.5% for the year. Currently, Nvidia is trading at 44.44x forward earnings.

Nvidia is trending this week thanks to surging GPU sales amidst the global chip shortage, as well as its planned 4-for-1 stock split at the end of June – but that’s not all. The company also announced Thursday that it also plans to buy DeepMap, an autonomous-vehicle mapping startup, for an as-yet undisclosed price. With this new acquisition, Nvidia will improve the mapping and localization functions of its software-defined self-driving operations system, NVIDIA DRIVE.

In the last fiscal year, Nvidia saw revenue growth of 15.5% to $16.7 billion compared to $11.7 billion three years ago. Operating income jumped 20.8% in the same period to $4.7 billion against $3.8 billion in the three-year ago period, and per-share earnings expanded 22.6% to $6.90. However, ROE was slashed from 49.3% to 29.8% in the same time frame.

Currently, Nvidia is expected to see 12-month revenue growth around 2%. Our AI rates Nvidia A in Growth, B in Low Volatility Momentum, C in Quality Value, and F in Technicals.

Nike, Inc (NKE)

Nike, Inc closed up 0.73% Friday to $131.94 per share, closing out the day at 5.4 million shares. The stock is down 6.7% YTD, though it’s still trading at 36.8x forward earnings.

Nike stock has slipped in recent weeks as the athleticwear retailer suffers supply chain challenges in North America. And despite recent revenue growth in its Asian markets, it also continues to deal with Chinese backlash to its March criticism of the Chinese government’s forced labor of persecuted Uyghurs.

In the last fiscal year, Nike saw revenue grow almost 3% to $37.4 billion, up 5.8% in the last three years from $36.4 billion. Operating income jumped 40.9% in the last year alone to $3.1 billion – though this is down from $4.45 billion three years ago. In the same periods, per-share earnings grew 33.7% and 82.8%, respectively, from $1.17 to $1.60. And return on equity nearly doubled from 17% to 30%.

Currently, Nike is expected to see 12-month revenue growth around 10.3%. Our AI rates Nike average across the board, with C’s in Technicals, Growth, Low Volatility Momentum, and Quality Value.

Mastercard, Inc (MA)

Mastercard, Inc ticked up 0.33% Friday to $365.50, trading at a volume of 2.7 million shares on the day. The stock is up marginally over the 22-day price average of $363.86 and 2.4% for the year. Currently, Mastercard is trading at 43.64x forward earnings.

Mastercard has faltered behind the S&P 500 index for much of the year – not to mention competitors like American Express. While there’s no one story to tie the credit card company’s relatively modest stock prices to, it may be due to a combination of investor uneasiness, already-high share prices, and increased digital payments. But with travel recently on the rise, it’s possible that Mastercard will be making a comeback.

In the last three fiscal years, Mastercard’s revenue has risen 3.3% to $15.3 billion compared to $14.95 billion. In the same period, operating income has fallen from $8.4 billion to $8.2 billion, whereas per-share earnings have grown from $5.60 to $6.37 for total growth of 16.4%. Return on equity slipped from 106% to 102.5% at the same time.

Currently, Mastercard’s forward 12-month revenue is expected to grow around 4.7%. Our deep-learning algorithms rate Mastercard, Inc. B in Low Volatility Momentum and Quality Value, C in Growth, and D in Technicals.

Q.ai, a Forbes Company, formerly known as Quantalytics and Quantamize, uses advanced forms of quantitative techniques and artificial intelligence to generate investment

Source: Netflix And Boeing Among Today’s Trending Stocks

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Critics:
The S&P 500 stock market index, maintained by S&P Dow Jones Indices, comprises 505 common stocks issued by 500 large-cap companies and traded on American stock exchanges (including the 30 companies that compose the Dow Jones Industrial Average), and covers about 80 percent of the American equity market by capitalization.
The index is weighted by free-float market capitalization, so more valuable companies account for relatively more of the index. The index constituents and the constituent weights are updated regularly using rules published by S&P Dow Jones Indices. Although called the S&P 500, the index contains 505 stocks because it includes two share classes of stock from 5 of its component companies.

See also:

References:

The War Between Gamers And Cryptominers and The Scarce Global Resource That Sparked It

gamers

hroughout the week, Doug Dejarnette heads to his Houston home’s second-floor game room and there transforms himself entirely. Sometimes the 38-year-old pretrial services officer becomes a Paladin warrior, raiding dungeons in the PC-version of World of Warcraft, and, at other times, the titular character in Half-Life Alyx, battling ETs on an alien-occupied Earth through an Oculus Rift headset.

What largely makes his gaming possible is a videocassette-shaped device inside his handmade computer called a graphics processing unit (GPU), which renders the games’ animation, allowing it to appear on a screen.

Dejarnette’s Nvidia GeForce RTX 3080 is a top-of-the-line model, and it wasn’t easy to come by. When he tried to buy a new one last year, he discovered it “just impossible to find anywhere. I woke up early at the launch day to hit every website. I finally gave up and bought one off Reddit for about $1,000,” a roughly 30% markup.

There’s a worldwide shortage of new and old GPUs right now, leading to a sense of “sheer fatalism” among gamers despondent about getting the latest tech or even replacing an old part, Dejarnette says. “It’s killing us.” And it’s led to some testy finger-pointing by gamers toward another group of geeks: cryptocurrency miners.

Gamers and others observing the GPU market say the miners have wreaked havoc on the $20 billion industry, taxing it with unexpected demand while key components for GPUs—microchips—are scarcely available. The companies making the GPUs understand the situation with the miners, and as recently as Wednesday, Nvidia announced it would change some future versions of its GPUs to make them less attractive to miners. But that fix will not arrive anytime soon.

“There’s nothing out there,” says 22-year-old miner Shaneel Mohandas, considering the current availability of GPUs. The IT worker has seven GPUs running in a darkened bedroom in palm-tree-lined Durban, South Africa, each device devoted to producing cryptocurrency like bitcoin and ether.

He figures even his aging collection of GPUs could fetch two and a half times their original price. “It’s all overpriced stuff. And it’s driving the gamers crazy.” Through mining, Mohandas receives Bitcoin as a reward for creating blocks of verified transactions that are added to the blockchain and doesn’t have to pay for it.

The tussle between gamers and cryptominers over these high-tech gizmos is a helpful way to understand something much broader that’s going on in the world. There’s a profound, worldwide shortage of microchips, which has grown to be almost as essential as concrete, oil or wheat for an increasingly digitized planet. Nearly a half-trillion dollars’ worth are sold each year. They power the electronic systems within planes, automobiles, smartphones—and yes, GPUs. Moreover, they’re increasingly found in such everyday objects as toothbrushes, refrigerators and coffee pots.


“It’s become kind of an addiction,” admits miner Aniel Varma, of Orlando, Florida. “Everyone wants to build their own machine. It’s a money printer.”


As incomes grow globally, consumers generally want more and more of these types of things each year, and some have been in especially high demand during the pandemic. But many of the chips within these items are made overseas by foreign companies, such as Taiwan Semiconductor and Samsung. And those global supply chains have been pressured greatly by the pandemic, disrupted by factors like factory closures and border shutdowns

By tensions between Taiwan and mainland China, which has never recognized its right to exist as a sovereign country. World governments are concerned: President Biden, for one, pledged to find nearly $40 billion to spur greater U.S. manufacturing of semiconductors in February, the same month European Union ministers met to discuss a $60 billion package meant to do the same thing in their 27-country bloc.

As with many problems so vast, the Great Microchip Shortage is best considered in miniature—which is where those gamers and cryptominers come back in. What’s happening in their little corner of nerd-dom is happening in some form across every industry relying on microchips, producing an almost comical array of besieged businesses, unruly consumers and markets gone haywire.

“I think what you have is a perfect storm of things,” says Matthew Stafford, the bespectacled managing editor of Tom’s Hardware, an online industry bible for the IT crowd. “Global companies expect stability. And this is anything but stability.”

Nvidia and its competitors have been making GPUs for gamers throughout much of the past three decades. By lore, Nvidia’s three cofounders are said to have, basically, dreamed up the entire market over breakfast at a dirty San Jose, California, Denny’s back in 1993, figuring there would be a market for people looking to improve their PCs as video games got more advanced.

One of those men, Jensen Huang, remains Nvidia’s CEO, and he has a personal fortune estimated at $14.2 billion. Nvidia, meanwhile, has a market valuation of nearly $370 billion. AMD, its closest rival, is worth close to $100 billion. (Nvidia’s stock price is up more than 67% over the past year, far outpacing the Nasdaq’s 43% gain.)

Gamers had GPUs largely to themselves until the last decade—when the crypto boom began. GPUs perform trillions of calculations each second, and their immense computing power can be applied to cryptomining, where a computer solves a series of complex equations, producing new portions of the cryptocurrencies that can be sold off for cash on easily accessible online exchanges, such as Coinbase.

Despite their advanced age and size, Nvidia and AMD have largely been caught flat-footed by the flourishing demand from cryptominers and don’t seem even now to fully understand what percentage of their sales come from miners, exacerbating the supply problem. In one recent conference call with Wall Street analysts, Nvidia executives cited vague third-party figures when discussing what portion of their GPUs currently go to cryptomining.

“They probably don’t really know,” says Bernstein analyst Stacy Rasgon. The figure might be as much as 10%, up from essentially zilch a decade ago and nearing a half-billion dollars. The situation is probably only worsening: Crypto prices have soared over 2020 and 2021, increasing the appeal to cryptomining.

The GPU makers don’t particularly want miners as top customers. They saw a similar burst in demand from miners back in 2017 and 2018, another moment of soaring crypto prices. But when that earlier bubble burst, the miners flooded aftermarkets with secondhand GPUs, depressing prices and suppressing demand for new models. The damage was evident in the figures Nvidia reported for its first fiscal quarter of 2019: nearly a third less revenue from a year prior, just $2.2 billion, a rare decrease for the company.

So Nvidia and the rest are not only dealing with a supply crunch but strong demand from a group of consumers who might vanish at any second if crypto prices plummet again. (Crypto is a mercurial world. In the past week, bitcoin has gone for as much as $51,383 a coin—and as little as $34,923.) Meaning, even if supply would improve, and the companies do better integrate mining into their forecasts, they could suddenly be left with a glut of product, weakening prices.

Considering all these factors, the companies have decided against making any big adjustments. The result is the tension between gamers and miners and the mad-dash rush for whatever GPUs are out there, often used ones from eBay or ones brokered through Reddit forums for double or triple the units’ original prices.

Locating a GPU “should be as simple as just checking Newegg”—a popular online electronics retailer—“to see if they’re in stock and then buy it, but now it’s anything but that,” says Ryan Welean, 27, a gamer in Mill Creek, Washington. Newegg has, actually, resorted lately to selling new GPUs through a lottery system to handle the crush. “It’s limited stock and high demand,” Welean says.

He has owned several GPUs since he began PC gaming a decade ago; he purchased a new Radeon RX 5700 from AMD last year, which has fueled dozens of hours of Final Fantasy to fill pandemic-induced downtime. “But recently I’ve been unlucky,” he says, grimly. “I’ve been on a waiting list with another site for the opportunity to buy a 3080 or 3090,” two Nvidia models, “and it’s taking a while.”

Justin Kelly, 42, straddles both worlds, a former gamer turned miner. Kelly first bought several GPUs to game—“friends would come over, we’d play Duke Nukem or Delta Force 2”—then put it toward mining bitcoin around 2013. He has purchased $10,000 worth of the latest Nvidia cards in the past year, good enough to produce as much as $600 worth of crypto a day.

He wishes he’d bought up more. “I would have spent more than $10,000. But in some cases, I wasn’t able to do that,” says Kelly, a Seattle IT consultant. Many of the sales had a strict one-GPU-per-order limit. “If I had gone back to, like, my August [2020] self, I should have told him to buy, like, 50 cards,” possibly flipping those Nvidia cards for several thousand dollars in profit each.

“It’s become kind of an addiction,” admits miner Aniel Varma, of Orlando, Florida. “Everyone wants to build their own machine. It’s a money printer.” Varma, 36, has managed to buy 30 Nvidia GPUs over the prior 12 months after finding someone to sell him a bot; the programmatic software can be taught to scour the web for GPU sales and snap them up as soon as a website adds them. More famously, bots have become scourges of the collectibles and sneaker worlds, making it impossible for normal buyers to purchase products fast enough.

Varma, who is also a tech consultant, has set up four computers in his house: one in the living room, foyer, guest bedroom and hallway. He mostly mines bitcoin and ether but has recently branched out to dogecoin, too, on the insistence of his young daughter. “I’m building these awesome supercomputers,” he says, proudly. “Everyone that walks in my house and sees the rigs”—miner slang for PCs—“and are just completely blown away. I’ve seen some jaw drops and some eyes popping out.”

Follow me on Twitter. Send me a secure tip.

I’m a senior editor at Forbes, where I cover social media, creators and internet culture. In the past, I’ve edited across Forbes magazine and Forbes.com.

Source: The War Between Gamers And Cryptominers—And The Scarce Global Resource That Sparked It

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Apple Will Allow Game Streaming Services, But Its Rules Are Still Restrictive

Apple overhauled its App Store guidelines on Friday to allow for game streaming services that had previously been denied—but the rules are still restrictive and it’s unclear if major players, such as Microsoft and Google, will be keen to follow them.

Game streaming services Google Stadia, Facebook Gaming, Nvidia’s GeForce Now and Microsoft’s xCloud don’t offer gameplay on iOS because of Apple’s policies limiting cloud streaming and third-party titles. 

On Friday, Apple adjusted its rules to allow for these services to operate on iOS, but each game needs to be a separate app available on the App Store subject to Apple’s review process.

Under the rules, game streaming services are allowed to have a main “catalogue app” that links out to individual games and allows users to sign up for the service, but games can’t be played directly inside the app like Android allows.

Apple did not change its policies about App Store fees, meaning that Apple will still take its usual cut of any subscription sign ups, game downloads or in-app purchases, which remains a major sticking point for the games industry.

It’s unclear if gaming services launch on Apple devices, or if they will continue to skip out on iOS altogether. Both Google and Nvidia declined to comment about their plans for iOS. Facebook did not immediately respond to a request for comment from Forbes.

Chief Critic

A Microsoft spokesperson told CNBC the changes are “a bad experience for customers.” 

“Gamers want to jump directly into a game from their curated catalog within one app just like they do with movies or songs, and not be forced to download over 100 apps to play individual games from the cloud,” the spokesperson said.

Key Background

Apple’s conflict with the gaming industry extends beyond streaming. Fortnite maker Epic Games is embroiled in a tense legal battle with the tech giant over its App Store fees. Epic argues that Apple’s 30% commission from in-app purchases is anti-competitive and forces companies to increase prices to cover the cost of the so-called “Apple Tax.” Apple, meanwhile, countersued Epic this week and said the company “simply wants to pay nothing for the tremendous value it derives from the App Store.”

Tangent

In Friday’s update, Apple also slightly loosened some rules for in-app purchases outside of gaming. One-on-one digital classes, like tutors or fitness classes, won’t be subject to the 30% fee. Follow me on Twitter. Send me a secure tip.

Rachel Sandler

 Rachel Sandler

I’m a San Francisco-based reporter covering breaking news at Forbes. I’ve previously reported for USA Today, Business Insider, The San Francisco Business Times and San Jose Inside. I studied journalism at Syracuse University’s S.I. Newhouse School of Public Communications and was an editor at The Daily Orange, the university’s independent student newspaper. Follow me on Twitter @rachsandl or shoot me an email rsandler@forbes.com

Source: Forbes

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