A few months ago, Plaid unveiled Plaid Exchange, a product that helps financial institutions build and maintain an API that other developers can use. The company is iterating on that product and now updates account activity in near real time. Plaid is better known for its universal banking API that lets you connect an app […] The number of sustainability-focused index funds, and investor assets in these funds, have doubled over the last three years, according to Morningstar, and Covid-19 added to interest. Tesla’s stock has already soared about 500% in 2020, prompting the company to split its share price to make it more affordable for average investors. Now it looks like Elon Musk’s electric car company is hoping it can find even more investors to gobble up its stock. Sep 02, 2020 (TS Newswire via Comtex) —
“The I Know First predictive AI algorithm has been able to forecast the movement of the S&P 500 index (^GSPC) and…
A few months ago, Plaid unveiled Plaid Exchange, a product that helps financial institutions build and maintain an API that other developers can use. The company is iterating on that product and now updates account activity in near real time.
Plaid is better known for its universal banking API that lets you connect an app or service with a bank account. For instance, it lets you connect your Cash App account with your bank account to retrieve bank account information.
With Plaid Exchange, the company is addressing the other part of the equation — banks and financial institutions. While the appeal of Plaid is that you can just use one API to connect with thousands of banks, it requires a ton of work on Plaid’s side to create those connectors.
Some banks already have a modern API, while others just let you access your account from a website. Plaid relies on screen scraping for those banks, meaning that it reproduces the same clicks that you would to access your bank account from your web browser.
Financial institutions can work with Plaid to implement a modern, token-based API. It is much more efficient, reduces load on the servers and opens up some new possibilities.
With today’s update, an app developer that uses Plaid to query your bank account will get instant transactions updates if the financial institution uses Plaid Exchange. For instance, Venmo could leverage that feature to notify you when your money has arrived on your bank account.
Branch is using Plaid Exchange. With instant account activity, their customers get better budgeting tools. Let’s see whether Plaid can manage to persuade big banks to use Plaid Exchange.
As a bank, you want to let your customers move money from a checking account to a savings account in seconds. But customers expect the same experience with other financial services.
If banks and financial institutions can’t provide a reliable and fast API, the next generation of adults who are considering opening an account will choose a challenger bank and skip financial institutions that don’t provide real-time data.
Author: Romain Dillet
ESG index funds hit $250 billion as pandemic accelerates impact investing boom
Socially conscious investing continues to gain momentum as Covid-19 and the destruction left in its wake spark interest in stakeholder capitalism — the idea that a public company’s focus shouldn’t only be generating profits to reward shareholders without taking the bigger picture into account.
With investors increasingly favoring ESG stock selection — when a company’s environmental, social and governance policies are considered alongside more traditional financial metrics — more impact investing funds are launching to keep pace with demand.
Both the number of sustainability-focused index funds, and their assets, have doubled over the past three years, according to a report from Morningstar released Wednesday. The financial research firm said that as of the end of the second quarter 2020, there were 534 index funds focused on sustainability, overseeing a combined $250 billion. In the U.S., which has lagged Europe in ESG investing, assets in sustainable index funds have quadrupled in the last three years and now represent 20% of the total.
Morgan Stanley recently said that ESG will be the defining acronym of the next decade, likely to dominate financial markets during the 2020s.
“There’s a great realization today that ESG issues are investment issues,” Alex Bryan, Morningstar’s director of passive strategies research for North America, told CNBC. “They’re issues that can affect the bottom line, and that may not always be something that comes to bear immediately. But it’s something that I think more people are starting to understand is aligned with shareholder value maximization,” he said.
Actively managed ESG funds continue to attract the lion’s share of dollars and represent a much larger portion of the sustainable investing landscape. Combined inflows into both active and passive ESG-focused funds reached $71.1 billion during the second quarter, pushing global assets under management above the $1 trillion mark for the first time.
Sustainable index funds are growing in size, number and complexity, and Bryan said that despite the record inflows, there’s “still a lot of runway,” especially in the U.S., where these funds currently make up less than 1% of the overall market.
“They’re still just a drop in the bucket compared to the full landscape of all index funds,” he said.
For example, the Vanguard Total Stock Market Index Fund, a traditional U.S. stock market investment portfolio, is on pace to hit $1 trillion in assets itself this year.
Bryan pointed to the coming $30 trillion wealth transfer from baby boomers to their millennial and Gen X children as one of the factors that will spur long-term growth in sustainable funds.
According to a recent survey conducted by Morgan Stanley’s Institute for Sustainable Investing, nearly 95% of millennials are interested in sustainable investing, while 75% believe that their investment decisions could impact climate change policy.
Covid-19 has also acted as a turning points of sorts. Not only has the global pandemic underlined the importance of resilient business models, but it’s shown that how companies treat all their stakeholders — including employees and customers — can impact the bottom line.
“The Covid-19 pandemic and movement for racial justice in the U.S. have kept attention on social issues, including workplace safety and diversity, and have likely added to interest in sustainable funds,” Morningstar’s report said.
Another reason sustainable funds are attracting record inflows is that they’ve dispelled the idea that there’s a financial trade-off for investors who want to focus on ESG. During the second quarter, 56% of sustainable funds ranked in the top half of their Morningstar category. Year-to-date, that number jumps to 72%.
“The things that are happening this year have accelerated some of the longer-term trends, but we’re still in early innings, at least in the U.S.,” Bryan said.
“ESG” has become a buzzword on Wall Street — Morgan Stanley recently said it will be the defining acronym of the next decade — and the investing approach is not without its critics. Some argue that it’s merely jargon and doesn’t actually move the needle on the biggest issues facing the world.
There’s also no uniform way to track a company’s ESG metrics, especially in the U.S., where issues such as diversity and pay practices do not have to be publicly disclosed. Additionally, there are many approaches to ESG investing, which means that funds can have very different practices. Some might exclusively invest in clean energy or companies that have a woman on their board of directors, while others might essentially track the S&P 500 but adjust their component weightings based on a company’s ESG score.
“There is currently no standard definition for sustainability, which increases investors’ due diligence burden and the risk that a fund will not meet investors’ expectations,” Morningstar’s report said. “It is imperative to research these funds before jumping into them.”
Author: Pippa Stevens
Tesla looks to raise $5 billion by selling more of its red-hot stock
New York (CNN Business)Tesla’s stock has already soared about 500% in 2020, prompting the company to split its share price to make it more affordable for average investors. Now it looks like Elon Musk’s electric car company is hoping it can find even more investors to gobble up its stock.
Tesla (TSLA) announced plans Tuesday to sell up to about $5 billion in new shares. The company disclosed the plan in a regulatory filing with the Securities and Exchange Commission Tuesday. The planned stock sale comes one day after Tesla’s stock split took effect, cutting the price of each share by a fifth.
Strong investor demand for Tesla — as well as Apple (AAPL), which also split its stock on Monday — led to outages on Robinhood, E-Trade and other online brokerages and trading apps.
Another electric car maker, China’s Nio (NIO), also sold more shares recently to take advantage of strong demand. Nio’s stock is up nearly 400% this year.
Shares of Tesla surged nearly 13% Monday but fell more than 1% Tuesday to around $490 a share. Still, the recent stock rise has made CEO Musk the third-richest person in the world, according to Bloomberg.
At its current price, Tesla is now worth about $460 billion — more than all but seven companies in the blue chip S&P 500 index. Tesla is still not in the S&P 500 since it has lacked consistent profitability in the past, but that may soon change now that has a recent track record of generating actual earnings.
Tesla didn’t give many specific details about what it plans to do with the money from the stock sales, simply saying in its SEC filing that it intends to use the proceeds “to further strengthen our balance sheet, as well as for general corporate purposes.”
Author: Paul R. La Monica, CNN Business
Stock Market Outlook: AI-Based Algorithm Shows Accuracy Up To 72% In Daily S&P 500 and Nasdaq Predictions
This analysis also covered stock market forecasts generated for associated ETFs that track the above-mentioned indices – namely, SPY and QQQ. The fundamental result of this research is that the hit ratios for SPY and QQQ forecasts achieve high levels of 69% and 72%, respectively.
The company’s report covered the period from May 13th, 2019 till May 13th, 2020, which includes the time of coronavirus crisis since the start of 2020, when the market became more volatile and unpredictable than before. During this time, the company was still successfully generating the AI-driven predictions for the above-mentioned Wall Street most admired indexes, delivering stock market predictions to its clients on a daily basis, and keeping track of the hit ratio. The latter reflects the accuracy of predictions.
The algorithm has shown top notch performance in its 3-month stock market forecast, reaching an accuracy rate of 72%, which means it can predict these indexes’ movement correctly for more than 7 out of 10 times; for the rest of the time horizons from the study, its accuracy stayed between 60% and 70%. Longer time horizons tended to demonstrate higher precision rates, which is not uncommon for a predictive machine learning algorithm. A longer timeframe suggests a clearer indication of a trend in the data, making it easier for the algorithm to pick it up and make an accurate prediction.
Nevertheless, even the forecasts for the shortest time horizon have demonstrated an accuracy rate well above the conventional machine learning waterline of 50%. This means that I Know First customers can be certain in the forecasts they are getting are based on statistically meaningful relationships picked up by the AI algorithm in the fresh market data and can be used as a solid basis for decision-making.
The I Know First Predictive AI algorithm
I Know First was recently recognized by Geneva WealthTech Forum as one of the top fintech companies for the development and successful deployment into action a proprietary AI-driven predictive algorithm that provides quant trading forecasts for over 10,500 assets, including its daily exchange rate forecast and gold price forecast. Moreover, the company also provides daily Apple stock forecast and weekly Apple news briefings at the specially dedicated portal apple-stock-news.com.
The algorithm is provided with market data that trails back 15 years to process every day, making sure its output reflects the up-to-date market conditions. By that our stock market forecasts represent a holistic approach to the market. I Know First algorithm treats global and local markets as a chaotic dynamic system, where a seemingly small event can have tremendous repercussions. So, it ensures that its models accurately reflect statistical patterns of the markets.
The algorithm also incorporates genetic algorithms concept, allowing the system to keep track of its own successes and failures and re-configuring its models, as necessary. This ensures high algorithm’s adaptability to constantly changing market conditions reflected in the daily market data. The resulting design eliminates any potential human bias in the system making our stock market forecasts purely objective and statistically based.
The forecasts are delivered as an easy to interpret heatmap, which includes two numerical indicators, signal, and predictability. The former indicates if a given asset is expected to go up (positive values) or down (negative values), while the latter demonstrates how accurate the algorithm was in its past predictions for this specific asset. The algorithm generates predictions for six time horizons, varying from three days to one year, which makes it worthy both for short-term trading and on long-term investment.
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