Blockchain as a technology is more than just the transfer of value using Bitcoin or Ethereum. It helps industries operate more efficiently as a whole. In last month’s report we highlighted the effectiveness of the blockchain at banks, like JP Morgan, who used tokenization to transfer value more efficiently over their system. We believe that as the financial rails with regulatory scrutiny prove that tokenization can work to store and save value, other industries will embrace the benefits to help solve their own defined issues. We have seen evidence of this lately through the acceleration of patent filing on Non-Fungible Tokens (NFTs) by many major firms.
The stock market has been supported by a healthier-than-expected economy this year, generating returns that have helped many portfolios to partially recover from last year’s bear market. Investors now hope these growth trends will translate into stronger corporate earnings since, in the long run, markets tend to follow the same trajectory as profits. With the future of the economy still uncertain, what signs are there that companies might begin to see improved profitability? The third quarter earnings season is nearly wrapped up with almost all S&P 500 companies reporting their results. This is likely to be the first quarter of positive growth in a year, a notable inflection point that mirrors the surprising stability of the underlying economy. Consensus Wall Street estimates are for earnings to be flat this year at about $217 per share but to then rebound in 2024 by 11%. While this is somewhat at odds with economic forecasts for slowing growth in the coming quarters, it’s safe to say that any acceleration in earnings would be welcomed by investors.
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