Orange juice, Cattle and Meta, we are adding new underlying assets to our offering!

Price developments over five years paint the same picture, i.e. a strong positive price trend. As of February 22, 2019, the price stood at 1.21 USD/pound, which means that the price of the commodity has developed 200 percent over the last five years. This corresponds to a Compounded Annual Growth Rate (CAGR) of 24.6 percent from February 22, 2019, until today, five years later.

The reason behind the price increase? Bad weather conditions and diseases spreading among orange trees. Brazil, the world's largest producer of oranges, was hit by harsh weather conditions in the second half of 2023. Extreme heat led to drought that negatively affected the already strained crops. The incurable bacterial disease called citrus greening that spread among the crops did not help either, as the disease led to poorer harvests and thus higher orange prices. Another major producer of oranges, the United States, also suffered from bad weather conditions when storm Idalia hit in the second half of last year.

Looking at the futures market, the market seems to believe that the historically high levels will not be sustained. The futures curve is inverted, i.e. the price for a transaction further into the future is lower than the price for orange juice today. So the market sees that orange juice prices will fall, the only question is whether the market is right?

To summarize, the price of orange juice has had a huge increase in recent years. The futures price is also very volatile due to the dependence of the commodity on weather conditions, a storm or drought can have a major impact on the price of the commodity. Whether we have seen the peak in the commodity price and the bad weather conditions, or if higher prices are expected, we have products for you. You can find all our exchange-traded products with orange juice as the underlying HERE.

Many have probably followed the series Yellowstone, a series about power, guns, and the culture around cows (Live Cattle) and life on a range. Trading live cattle is common and large producers and breeders work like many other large companies, trying to minimize risk by having a steady inflow and outflow of capital. The need for risk management led to the creation of cattle futures in the 1960s and they are now traded on the Chicago Mercantile Exchange (CME). Factors that affect the price include weather conditions, the price of feed and the general demand for cattle.

Looking at the price development over a year, it has been a volatile journey. The futures price started at 1.65 USD/pound on 22 February 2023, rose to a high of 1.87 USD/pound during the period, and ended at 1.84 USD/pound on 22 February 2024. Over this period, the price of cattle has risen 11.3 percent. The price trend has left its mark on meat prices in supermarkets, which will not have escaped anyone who frequently puts meat on their dinner table.

Over a five-year horizon, the trend is less volatile, but still the price development has disadvantaged the average meat consumer. The futures price stood on February 22, 2019, at 1.29 USD/pound, which is a percentage development of 42.6 percent until today five years later. This corresponds to a CAGR of 7,4 percent during the period.

Looking at the futures curve, the futures market seems to expect the price of live cattle to fall initially in the coming months, and then resume its positive price trend towards the end of 2024 and the beginning of 2025. But of course, there is no certainty on this development of the market as these price trends are no reliable indicators of future results.

We are proud to be the first issuer in the Swedish market to offer investors this underlying, you can find both Bull & Bear certificates and Mini Futures HERE.

Meta Platforms, which was previously only called Facebook, has had an eventful development in recent years, to say the least. Many may remember the talk of the metaverse and even looked forward to setting foot in the digital universe. What happened next? Meta spent tens of billions of USD on this venture, which in retrospect proved less successful. Has the metaverse just had a slow start and will our lives revolve around this digital world in the future? Only time will tell, but Meta seems to have gone back to focusing on the present and not on hopes far into the future. The company launched major cost savings in 2023 and laid off about a fifth of its employees. Meta also announced in a press release on February 1 that the company will start paying a quarterly dividend, which is the first time ever in the company's history that it has announced a dividend. The dividend is truly a paradigm shift and shows that Meta has entered a "maturity phase" as a company.

The share price over five years reflects the company's many investments and fluctuations. Between 22.02.2019 and 22.02.2024, the share went from USD 161.9 to USD 486.1, which corresponds to a CAGR of 24.6 percent during the period. It is also noteworthy that the share was at its lowest point at USD 88.9 on November 3, 2023, when the investor community was at its most pessimistic, and then rose to USD 486.1 on February 22, 2024. This is a development of 446.8 percent and shows quite clearly the shift in investor sentiment in Meta.

Meta offers several different types of social media platforms. These are Facebook, Instagram, Messenger and WhatsApp, which Meta refers to as its "family of apps". Looking at the monthly active people (MAP) for Meta's family of apps, the number has grown steadily over the past seven years. The growth of monthly users accelerated during the Covid-19 pandemic due to the restrictions and the flight to the digital space it brought. Growth has since slowed down but has still been positive. Today, around four billion people use one or more of Meta's different platforms monthly. This corresponds to about half the world's population, which is not necessarily easy to grasp.

With the large market share Meta has today, it is difficult to see a scenario where they can grow much more. This view is not shared by analysts, who, according to a compilation by Bloomberg, see continued growth in both sales and profits in their estimates that extend to Full Year (FY) 2027. According to analysts' estimates, sales can grow by 61.9 percent to USD 218 billion, and profits by 96.6 percent to USD 77 billion. This corresponds to a Compound Annual Growth Rate (CAGR) from FY 2023 to FY 2027 of 12.7 percent for revenue and 18.5 percent for profit, according to the Bloomberg estimates Where will this growth come from? Positive investors believe that Meta's investments in Artificial Intelligence (AI) are a factor. Meta is currently investing large sums in the technology, including by buying hardware from Nvidia, to improve its algorithms. The improvement of the algorithms is believed to drive up user engagement and tailor advertising more effectively, which can result in more revenue for the company. It is important to keep in mind that these estimates of future performance are no reliable indicator of such results.

Meta's share price has had an interesting journey, and the company's development has been at least as interesting during the same period. Meta is one of the few companies with real global reach, with its 4 billion monthly users. The only question is whether Meta can continue with its steady development that it has historically had, or whether the growth will slow down. Whether you are positive or negative about Meta's stock, our products allow you to position yourself for both up and down scenarios. We are now launching Mini Futures with Meta as the underlying, you can find them HERE.