Tech
TECH-HEAVY: Cryptocurrencies Slump as AI Still Booms
Wall strut
It was Monday in New York, and the flagship cryptocurrency of this universe or any other we know of – Bitcoin (BTC) – appears poised to break through some of those terribly important psychological levels that people love to agonize over.
Cryptocurrency markets have been under intense pressure lately, despite seemingly easy gains in stocks. Especially Mega Tech.
Bitcoin has already retraced more than -20% from its all-time high reached in March, while all types of altcoins have taken an even bloodier beating. According to Coinmarketcap, the global market capitalization of altcoins, excluding Ethereum, has fallen by an average of 33% from recent highs with similar timeframes.
Overall, capital flows into cryptoassets have decelerated significantly from levels seen in the aftermath of the spot launch of the Bitcoin ETF in the United States.
At night, quite late in Sydenham, BTC was quickly heading towards US$60,000.
Via Google
It is now hitting some of its lowest levels in a few months.
Last week, new cryptocurrency investment products recorded the lowest trading volumes globally since the launch of US bitcoin ETFs in January.
The moral of this story is not that someone hacked legendary rapper 50 Cent’s soc media accounts – his X account and his website were hacked at the same time with gleefully broadcast instructions ordering everyone to go buy a memecoin called GUNIT (they did).
The exact amount earned by these hackers is not known. On Insta, Fiddy himself got scared: “whoever did this made $3,000,000 in 30 minutes.”
The real moral of the story is probably don’t take investment advice from someone calling themselves 50 Cent, let alone someone pretending to be 50 Cent.
A stroll down Wall Street last week saw the S&P500 close 0.2% lower at 5,465 on Friday, the Nasdaq Composite also fell 0.2% to 17,689, while the Dow Jones Industrial Average rose just 0.04 % at 39,150.
The S&P 500 index hit an intraday record of 5,505.53 on Tuesday, closing the week up 0.6%.
The Dow was the best performer among major indexes, gaining 1.45%.
But we have no doubt where the returns are coming from: what they now call “The Magnificent 5” – Microsoft (MSFT), Nvidia (NVDA), Alphabet (GOOGL), Amazon (AMZN) and Meta (META) – are where the thanks are due – and where losses could potentially accumulate.
They have accounted for 60% of the S&P 500’s gain this year
Via Crescat
Democracy in traction
Excitingly, Americans will be given our first glimpse into what constitutes an American presidential debate ahead of the 2024 election.
This will happen on Thursday, although with incumbent President Joe Biden and his equally ancient challenger, former President Donald Trump, on stage it will look like a rematch of 2020, without distancing, etc.
The most interesting fact to mention is that the combined age of Biden and Trump is two-thirds of the age of the country for which the two aspire to play the most important role.
It’s worth considering: given the dire state of polling for the UK’s Conservative Party, and one poll even showing Prime Minister Rishi Sunak would lose his seat, one wonders how useful this head-to-head will be in changing the voters’ opinion before the last week of the campaign. .
Wall Street’s climb to historic highs occurred with significantly reduced volatility.
The S&P 500 index has now gone 377 days without a 2.05% sell-off.
According to FactSet data compiled by CNBC, this is the longest period for the benchmark since the great financial crisis.
Via CNBC
Not even in this period of time has the index recorded a gain of at least 2.15%.
AI News
Here’s the latest on the direction taken by Nvidia (NVDA).
Overnight the stock began to retrace some of the losses from the previous session, when NVDA lost about 6% – its biggest daily decline since April.
Nvidia’s sudden hat trick of losses pushed the chip company deeper into correction ground about 13% below NVDA’s recent intraday record.
Yet Nvidia – after amassing a market capitalization of $3.34 trillion last week, briefly overtaking Microsoft to become the world’s largest company – has now been hit by profit-taking and sits around 10% in less than its all-time high.
It is rated a buy by 89% of sell-side analysts and its revenue is expected to grow 98% next year.
So… I guess this is a buying opportunity? American cross-country skier Rosenblatt thinks so.
The broker’s semiconductor analyst, Hans Mosesmann, estimates that even after gaining more than 200% in 12 months, NVDA shares still have a 50% upside from current levels.
Rosenblatt maintained a Buy rating on NVDA last week and also raised the price target from $140 to a Wall Street high of $200.
Mosesmann’s position would put NVDA at a rather astonishing valuation of $5 trillion.
Jefferies meanwhile reiterates Nvidia as a buy, raising its price target on Monday to $150 from $135.
“NVDA remains both king and kingmaker: for example, we still see growth for MRVL and ALAB alongside NVDA, but NVDA’s decisions on each generation could materially alter the situation,” the broker says
Citi also reaffirmed on Monday that Micron is the top pick in the U.S. The price target was raised to $175 a share from $150 ahead of a sharp decline in earnings on Wednesday.
“Our top pick Micron will report Q3 24 results on June 26 after the market close, and we expect the company to post above-consensus results and guidance, given the DRAM recovery and Micron’s growing AI memory exposure” , says Citi.
Other semiconductor stocks that were under pressure Monday, including Super Micro Computer, Qualcomm and Broadcom, managed to stop the bleeding.
Engines for the US market
Inflation is once again the focal point with the focus on Friday’s US personal income and outlays data for May – which gives the reading of the personal consumption expenditure (PCE) price index, the indicator of inflation preferred by the Fed.
U.S. economic growth will also be in focus Thursday, as the second estimate of first-quarter gross domestic product growth falls.
Future data is largely driven by final first-quarter GDP estimates, plus some polls and Fed speeches.
According to James Gerrish of Shaw and Partners, FOMC members believe they are fighting the good fight against inflation right now by stifling US economic conditions through their high interest rates:
“However, in reality, they could push the US economy into recession if they don’t keep an open mind – we often think the Fed should let the two-year T-note yield determine the Fed Funds target rate and if it had today we would already have enjoyed some rate cuts in 2024.
“The highly skilled members of the FOMC usually think they know better than the bond market, but when they keep rates too low, as they did after COVID, inflation runs wild, and when they keep rates too high, as they are doing now , they sum up. handbrake too strong, resulting in economic problems.
James says his Market Matters team fears the Fed may be too slow to cut rates, but ultimately rate-sensitive stocks/sectors should perform well over the next year(s).
Elon watch
Here he is ultra libertarian at the end of last week. Free speech and torpedoes be damned. You do this, after purchasing a social media company.
But perhaps most surprising is the news that our own Elon discovered some scandalous fakes over the weekend.
On YouTube, a Mr Musk rip-off told dumb viewers to deposit their cryptocurrencies into some unrelated and promising free cryptocurrency in exchange.
The looping deep fake looked an awful lot like a live stream of a Tesla event and reports suggest that around 30,000 Muskovites were all along for the ride at one point, pushing it to the top of YouTube’s Live Now recommendations.
The title was rather ordinary: “Tesla’s”. [sic] unveils a masterpiece: the Tesla that will change the automotive industry forever.”
According to Engadget, the now-removed video used an AI-generated version of Musk’s gentle tones to lure viewers into depositing Bitcoin (BTC), Ethereum (ETH), or Dogecoin (DOGE) for a supposed freebie, promising to “automatically resend double the amount.”
It’s actually the latest in a recent wave of Elon Musk deepfake scams. In early June, Cointelegraph reported 35 accounts impersonating SpaceX running similar scams during the Starship launch.
US earnings
The world’s largest cruise operator Carnival (CCL) and global economic leader FedEx (FDX) reported quarterly results on Tuesday, followed on Wednesday by Betty Crocker and Cheerios parent company General Mills (GIS) and chip maker memory Micron Technology (MU) and the pharmacy chain Thursday Walgreens Boots Alliance (WBA) and the world’s largest shoe maker Nike (NKE).
Tuesday
Baker Hughes (BKR), Carnival (CCL), and FedEx (FDX).
Wednesday
General Mills (GIS), Paychex (PAYX), Levi Strauss (LEVI), Micron (MU), and AeroVironment (AVAV).
Thursday
Nike (NKE), McCormick (MKC), Walgreens Boots Alliance (WBA) and Acuity Brands (AYI)