The stock market is mixed Tuesday morning as analysts continue to look ahead to the Federal Reserve’s meeting on Wednesday. However, there’s plenty of room for more uncertainty in the market: some experts are now warning of oil production problems, even as prices cool off from their inflation-fueled highs.
Meanwhile, crypto enthusiasts are buzzing over the news that exchange platform Kraken will soon introduce its own NFT (non-fungible token) marketplace. NFTs have remained controversial even among some diehard crypto fans due to their inherent volatility and apparent lack of security. However, many investors still consider NFTs a cornerstone of blockchain technology and predict that these authenticated tokens will play a major role in the future of the Metaverse.
In other tech-related news, Tesla failed to disclose its proxy statement with the SEC on Monday. Many investors assumed the electric car manufacturer would make its finances more transparent yesterday amid CEO Elon Musk’s massive purchase of social media platform Twitter. Without these proxy papers, it’s difficult to predict how much money Musk is borrowing against his sizable stake in the automotive company.
Oil Production Problems
Oil prices have cooled off slightly since their high points in March and April. The ongoing Russian invasion of Ukraine and worsening global inflation have kept the price of crude oil sky-high for months. In the final week of April, prices started to fall as oil demand in China cratered.
China is in the grip of another series of sweeping health-related lockdowns. Many analysts were surprised by the far-ranging nature of these shutdowns, which are once again pressuring the global economy. China is a major manufacturer of microchips and a huge customer of the international oil market.
With Beijing calling for lockdowns, demand is at its lowest level since early 2020. However, another issue is looming on the horizon: production issues could bottleneck the oil supply. “From the long term, something far more serious is going on — and that is what’s going on in Russia,” Energy Word founder Dan Dicker tells reporters.
“The energy companies, Exxon, Total, BP, leaving Russia, stranding assets in Russia. What we’ve seen is that production in Russia is down more than a million barrels in April alone,” Dicker continues. “That’s going to be a long-term systemic problem with production in Russia. That’s a very very big deal for long term prices.”
Kraken NFT Marketplace
Kraken, a global cryptocurrency exchange platform, plans to dip its toes into the NFT space. Notably, the platform promises to offer its users a unique benefit: Kraken says it will waive transaction fees for NFTs traded on its exchange. This could result in sizable savings for investors.
Trading anything verified on the Ethereum network comes with fees and costs. Notably, many Ether transactions involve gas fees and other hidden charges that can quickly add up. “Depending on how you measure it, cryptocurrencies went from seeing modest adoption to something that is a multi-billion dollar industry,” Kraken CEO David Ripley explains.
“We see over the next five to 10 years, the same type of trajectory and total market size could come to fruition for NFTs, so we are viewing this as a massive opportunity with a massive potential market.”
Some analysts have noted that this could make Kraken the Robinhood of NFT platforms. Robinhood skyrocketed to popularity by using a payment-for-order flow method that enabled fee-free stock transactions. In some cases, gas fees for NFT trades can equal or even exceed the value of the NFT itself. If Kraken plans to waive these fees altogether, it will probably become the de facto standard for NFT enthusiasts.
Tesla Proxy Statement
Tesla CEO Elon Musk plans to buy Twitter for over $50 per share, to the tune of $44 billion. Some experts believe that’s an overvaluation of Twitter’s potential for making money, while others think Musk must have a robust plan in place to monetize the social media website.
Tesla investors had marked May 2 as the day to expect the company’s proxy statement filing with the Securities and Exchange Commission. The company had 120 days after the end of the calendar year to disclose these documents, but Tesla told the SEC on Monday that it needs more time to prepare its data.
“We currently expect that our definitive proxy statement for the 2022 annual meeting of stockholders will be filed later than the 120th day after the end of the last fiscal year,” the company told the Commission yesterday. This is frustrating for investors who want more information regarding a proposed stock split, as well as those who want to know how much money Musk is borrowing against his Tesla shares.
Tesla has stated it now plans to hold its annual shareholder meeting on August 4, 2022, in Austin, Texas. Investors eager for more information on the company’s plans will have to wait several months before they know more about the proposed stock split and other future endeavors.