Crypto lender Celsius reveals $1.2bn deficit

In today’s top stories, a court filing showed that Celsius has a $1.2bn deficit and a 13F filing from DNB Asset Management revealed the firm had trimmed its Apple stake. Meanwhile, foreign investors started trading China’s ETFs through Hong Kong and analysts named their top earnings trades, including auto stocks such as Ford and GM.

Celsius’ $1.2bn deficit

The collapse of crypto lender Celsius has revealed a $1.2bn black hole in its balance sheet. According to a 61-page court filing by co-founder Alex Mashinsky, of Celsius’ $5.5bn in total liabilities, $4.7bn is owed to its users, while it has assets of just $4.3bn. Mashinsky said the platform had grown faster than they were prepared for and this led to “poor asset deployment decisions” and “unanticipated” losses.

China’s ETFs attract foreign money

A regulatory change that took place earlier this month has made dozens of China’s ETFs available to foreign investors via Hong Kong through a programme called ETF Connect. ETFs have boomed in popularity in recent years, according to a report from Hong Kong Exchanges and Clearing. The number of ETFs has more than quadrupled over the past five years to 645, whereas the number of stocks rose 53% to 4,615.

Earnings season best buys

Earnings season has arrived, but it’s expected to be a disappointing one. Still, analysts remain bullish on some names. Truist’s Scot Ciccarelli has home improvement and garden company Tractor Supply [TSCO] as a top pick “given our belief that multiple long-duration topline drivers continue”. Goldman Sachs’ Noah Poponak likes Boeing [BA] and Argus Research’s Christopher Graja picks homebuilder DR Horton [DHI].

Earnings preview: Ocado

Online grocer Ocado [OCDO.L] has seen its share price heavily beaten down over the past year, compounded by inflation and rising food prices. In June, it raised £578m to boost its global tech rollout, but this was met with scepticism from analysts including Shore Capital’s Clive Black. Investors will be hoping half-year earnings being reported on 21 July reveal how the grocer plans to address a slowdown in sales growth.

Leading European asset manager sells Apple

One of Europe’s largest asset managers, Norway-based DNB, cut its Apple [APPL] stake by 10.35% in the second quarter, according to the firm’s latest 13F filing. It reduced its positions in Activision Blizzard [ATVI], Electronic Arts [EA] but increased its stakes in General Electric [GE] and Nvidia [NVDA]. It also started buying shares in Coinbase [COIN] in the three months to the end of June.

Morgan Stanley sees value in Ford and GM

Auto stocks have been in reverse this year with the likes of Ford [F], General Motors [GM] and Stellantis [STLA] all underperforming the S&P 500. Higher inflation and reduced consumer spending has meant sales have taken a hit, but these stocks should gather speed in an economic recovery. Morgan Stanley analyst Adam Jonas believes that while there’s reason to see Ford and GM as value traps, both currently have an “attractive” valuation.

Earnings preview: Netflix

When Netflix [NFLX] announced its Q1 earnings back in April, news of its first ever subscriber loss sent investors packing — the stock is down 68.6% year-to-date. The brave investors who’ve remained are readying themselves for Q2 earnings after the market closes on 19 July. Expectations are muted and Wall Street is anticipating another subscriber loss. Long term, the streaming service is hoping ad-supported subscriptions can turn its fortunes around.