Wall Street Lunch: Bitcoin Keeps Rallying -LSB

Garima
5 Min Read


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Monsieur

Listen below or on the go Apple Podcasts AND Spotify

of march at $50,000 continues. (0:15) Uber to join S&P 500. (1:58) Spotify announces another round layoffs. (2:17)

This is an abridged podcast

Our main story so far

Crypto stocks are rising like Bitcoin (BTC-USD) continues to climb. Bitcoin hit a high of $41,800 before gaining as market sentiment turned negative.

Currency base (coins), HIVE (HIV), Microstrategy (MSTR), RIOT Platforms (DISTURBANCE), CleanSpark (CLSK) and others were winning.

Bitcoin has risen on expectations of a Fed rate cut and growing optimism surrounding the impending approval of ETF applications. Analysts expect SEC approval as early as January.

Bitcoin is up about 150% this year.

There was speculation that money could roll into crypto and out of Magnificent 7 stocks, which are weighing on the major averages today.

Nasdaq (COMP.IND) is the weakest, down -1.5%, with S&P (SP500) down -1% and the Dow (DJI) down -0.5%.

The Bloomberg Magnificent 7 Total Return Index is lower at -2%. And it has fallen more than -4% since a recent peak on November 29th.

BofA noted that in November, regional banks, up 16%, actually outperformed the Magnificent 7, up +14%, as a buyers’ strike on leverage ended.

A rate hike today may have put pressure on growth stocks.

The 10-year Treasury yield (US10Y) is back near 4.3%.

In economic data, factory orders in October fell more than expected.

Among the active stocks

Cameco (CCJ), Uranium Energy (UEC) and energy fuels (UUUU) increased after the US and 21 other countries pledged at the COP28 climate summit to triple nuclear power capacity by 2050l. The countries said an agreement is critical to meeting climate commitments in the coming decades.

Meta Platforms (META) CEO Mark Zuckerberg revealed in an SEC filing that he intends to sell just over 28,000 shares of the company, worth about $9 million.

And Uber (UBER) jumped after receiving confirmation that it will be added to the S&P 500 on December 18.

Analysts at research firm Argus say that “Uber has significant size and scale advantages over Lyft” and they “believe it has experienced a multi-year period of operating losses.”

They also expect Uber to start buying back shares.

In other noted news

Spotify (SPOT) is laying off about 17% of its workforce to cut costs, marking the third round of layoffs for the company this year.

In January, the music streaming service provider said it was cutting nearly 6% of its workforce, while in June the company announced it was laying off about 200 employees (nearly 2% of its workforce) in the division of its global podcast.

The latest round of cuts will affect around 1,500 people.

In a letter to employees, Spotify CEO Daniel Ek said “despite our efforts to reduce costs last year, our cost structure for where we need to be is still too large.”

And Twilio (TWLO) announced the elimination of about 5% of its workforce and said it would incur $25-35 million in charges under a restructuring plan aimed at streamlining operations.

The communications software company said most restructuring charges are due in the fourth quarter of 2023 and its latest workforce reduction plan will be completed by the end of the first quarter of 2024.

And in the research corner of Wall Street

BofA is digging into the current state of the market.

“Zeitgeist I: ‘Everyone thinks we’re going to get together on Valentine’s Day, all emotionally Bulgarian but still intellectually weak and likely to stay that way until the leadership changes.’

Zeitgeist II: ‘Our parachute in 2024 is politics; The election means stimulus, and that means the landing will be soft, not hard.”

With that as the year-end backdrop, Hartnett ranked his top 10 trades for 2024.

Among the traders are

30-year long mixed UST (US30Y) (TBT) (TLT)/IG (LQD)/HY (HYG)/EM (EMB) high yield bond portfolio + “capital returns without capital risks”

Long tech bonds IG to own tech balances but not tech EPS

Are you tall Japanese (USD:JPY) (FXY) as BoJ rate hikes cause large capital repatriation to Japan

And long “diamonds in the rough” stocks where you buy the best stocks in the most unpopular regions and sectors like banks (KBE), communal services (XLU), REIT (XLRE), UK (EWE), China (MCHI) (FXI)

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