RF's Financial News: November 2024

Sunday, November 24, 2024

This Week in Barrons: 11.24.2024

(1) Bitcoin appears ready for the ‘pause-that-refreshes’. $100k is a major barrier and extremely bullish when we break through. (2) The third year of this bull market (beginning Oct. 2022) will be tricky, but if the bull lives through it – the next few years will be solid. (3) Mutual Funds are holding less cash than usual, and remain underweight Mag-7 tech. Please CLICK and feel free to read the blog post:

Sunday, November 17, 2024

This Week in Barrons: 11.17.2024

This Week in Barrons: November 17, 2024:

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Seth Goldin says: “Take good notes.” Facts are interesting, but they don’t trigger learning – stories do. Stories change our understanding of the world. Good teachers are storytellers, and storytellers are good teachers. Use your notes not as recitations of facts, but as prompts to remind you of a story that you already understand.

Dr. Robot-O at your service…

At Johns Hopkins University, the da Vinci Surgical System robot is learning and performing critical surgical tasks with human-level skill.
The system trained and learned on hundreds of surgical videos.
The system also showed unexpected adaptability, like automatically retrieving dropped needles – a skill that it wasn't explicitly programmed to perform.

The Cure for FOMO … Dr. Phil Perlman

The key to curing FOMO is to move away from comparing yourself to others and towards comparing the new you to the old you.
Make this shift by taking up hobbies that promote competition with yourself – such as jogging, swimming and/or resistance training.
Set a series of goals for yourself.
Once you have spent a solid month working to improve – then you’ll realize that experiential learning is your new superpower.
Congrats, you’ve made the shift away from focusing on the accomplishments of others.

The Market:

Many are rethinking their approach to AR … because they’re seeing Meta's simpler smart glasses finding more of a product-market fit. By starting with everyday glasses, companies could make AR more approachable and practical for regular users.

Apple’s preparing to launch a wall-mounted smart-home tablet. The device looks like an iPad, but can control: AC, appliances, lighting, host video calls, answer questions, and play music. It comes with a front camera, built-in battery, and internal speakers. Siri and Apple Intelligence are deeply integrated.

Trump Trades:

1. #1 = Crypto = IBIT, MSTR and ETHA.

then…

2. Big Oil = XOM, VLO, & KMI,
3. Big Banks = JPM, & GS, and
4. Space = TSLA.

[ Gain access to Decentraland here… ]

InfoBits:

Howard Lindzon wrote: “One thing we can learn from Elon Musk … is how to market your product. Always be cheerleading, pitching and marketing. And it helps if you own a bullhorn!”
OpenAI will launch ‘Operator’ in January … It’s a new AI tool that can actively control a web browser to complete real, multi-step process tasks with minimal human oversight – such a booking plane flights and/or transferring funds. This marks a shift from increasing ‘knowledge’ (smarter chatbots) to ‘actions’ (saving time).
Amazon is working on smart glasses … that help drivers slash last-mile delivery times. The specs will improve productivity by guiding drivers with turn-by-turn directions via a screen on the lens.
President-elect Donald Trump announced that … Elon Musk will co-lead DOGE – the Department of Government Efficiency. DOGE will provide: “advice and guidance from outside the Government; therefore, not requiring legislative approvals and/or funding. The goal is to cut $2T+ from the federal budget.”
Alphabet's Waymo is making its driverless robotaxis available … to everyone in L.A. – as they now log +1m autonomous miles/week.
Inflation can be solved regardless of how bad it is: “In under a year, Javier Milei reduced Argentina's inflation from 25% to under 3%. This is what happens when you aggressively cut public sector spending. Elon Musk will do the same to the U.S.”
Inflation (both CPI & PPI) edged higher in October.
Klarna filed for a U.S. IPO … just as Buy Now Pay Later preps for the holidays. [FYI: The average credit card interest rate = 23%, and 11% of credit cards are in 90-day delinquency status – largest % since the financial crisis.]
Charlie Bilello reported: “US National Debt has increased $850B in the last 3 months, and increased 56% in the past 5 years. Our Government is borrowing from our future to spend money like drunken sailors today.”

Crypto-Bytes:

Bitcoin crossed $80,000 the first time … hitting an all-time high. Fair warning: 4-years ago (during the 2020 bitcoin halving) bitcoin’s price increased 400% going from ~$15,000 in November to ~$60,000 in March, 2021.
MicroStrategy just bought $2B+ worth of BTC … boosting its total holdings to $23B+. During the past week, MSTR was up ~50%.
Last week, Ethereum ETFs smashed their own inflow record.
Eric Balchunas wrote: “The Bitcoin Industrial Complex (ETFs, MSTR, and COIN) saw $38B in trading volume in one day. Blackrock’s IBIT did $4.5B in one week of inflows.”
Wyoming’s Cynthia Lummis, has proposed … selling off a chunk of the Federal Reserve's gold stash to buy a million bitcoin for a national BTC reserve.
Following the latest Bitcoin reserve pitches … Pennsylvania dropped its own bill to stack BTC in the state’s treasury. They’re looking for diversification and a hedge against inflation – with a plan to let up to 10% of PA’s budget reside in BTC.
18 states filed a lawsuit against the SEC … accusing it of constitutional overreach and meddling in state’s affairs. The SEC’s approach is a “regulation by enforcement” crusade against crypto – crushing a state’s right to manage their own economy while overstepping federal boundaries.
The SEC’s Chairman Gary Gensler gave … what sounded like a farewell speech at a conference last week. Most expect Gensler to be replaced shortly by a crypto-friendlier regulatory head.

[ Visit WebStreet - here… ]

TW3 (That Was - The Week - That Was):

Monday: Over the last 10 days, bitcoin has rocketed 30%, from $67,405 to ~$88,000. On the other hand, gold moved lower by ~4%. I find this curious given they are both competing forms of money, and the dollar has been strengthening as of late. Bitcoin is under-valued vs GOLD (by 10X), and should continue its rise in price as its use cases for being a medium of exchange continue to improve.

Friday: The market pouted yesterday, when the PPI came in hot, and the Grand Poo-bah himself kicked the bulls in the groin by saying: “The FED doesn't need to be in a hurry to lower rates. The economy is still strong, and October's disappointing jobs report was mostly due to hurricanes and labor strikes.” Powell's hawkish tone dampened market enthusiasm and lowered trader’s expectations for a December rate cut. So (a) we have inflation, (b) everybody’s selling our bonds, and (c) the equities market wants and needs more stimulus to keep going. The market is beginning to think that the gravy train might be running out of fuel.

Morgan’s Moments…

Morgan and Callum Thomas noticed:

The S&Ps are taking a breather after briefly hitting 6,000.
Numerous investor surveys have hit record, bullish highs.
Market sentiment is showing extreme confidence & complacency.
However, a new consumer confidence vibe is brewing.

The market is digesting and correcting levels of extreme confidence, optimism, and bullish euphoria. There are certainly a lot of minds that could change with the right nudge, but currently the mood of the market is bullish and the underlying trend is still up.

Callum Thomas noticed:

The largest 20 S&P companies in 1995 had an average time in business of 129 years. Currently, that age has dropped to ~50 years. Will this trend continue with more new and disruptive tech companies coming online?
In 2018, 1,055 companies reported sales growth of +10%, but by 2023 only 35 of them were able to consistently record sales growth of at least 10% YoY across that 6-year period. It’s easy to grow fast once, but hard to grow fast consistently.

Next Week: Is this Sell-Off Serious?

The Advance / Decline line left heavy risk on the table … as many traders are leaning towards the door. It’s a small door, and nobody is rushing out of it just yet. On Thursday and Friday of last week, we had over ~60% decliners within the S&P 100. It’s not something to panic about, but rather something to be aware of. The good news is that the energy sector was flat, and the financials were higher on the week.

Our Interest Rates have issues … as the 10-Year touched 4.5% last week. We’ve moved from 3.6% to 4.5% (a 25% move higher in rates) since mid-September. Consumers don’t care about the FED – when markets and banks are raising their credit card and mortgage rates. The Dollar is skyrocketing while the EURO and other emerging market currencies are being decimated. None of that is giving me a warm-n-fuzzy.

The VVIX is knocking on the 110 door – again … so traders are putting their hedges back on. If our bonds (/ZB) continue to move closer to the 114 region and rates continue to approach 4.5 to 5% - that will snap the back of this marketplace.

Can Nvidia save the day (again) for the Semi-Conductor Index (SMH) … with their earnings coming out on Wednesday (11/20)?

SPX Expected Move (EM):

Last Week’s EM = $82 … we actually moved ~$130 lower.
Next Week’s EM = $95 … which still seems rather low in my mind because of the bond market.

TIPS:

Tip #1: An ASPI trade:

ASPI is trading for $7.27, and the April $9 Calls are paying $2.65.
If you bought 1,000 shares of ASPI and sold the Covered Calls, you'd take in an immediate $2.65/share, which lowers your actual cost of to $4.62/share (a 36% return if it closes flat).
If ASPI gets over $10 by April, you'd get another $2,730 in appreciation and get called away.
That would give you a total return of 50% over the next 5 months. The only way this is a losing trade is if ASPI is under $4.62/share in April.

Tips #2 - #5: In/Out Call-Spread Trades … where you’re buying a $2 wide, out-of-the-money January call spread:

Look at BITO … BITO could go to $32.50 = also watch MARA and RIOT.
Look at ARKK … You can Buy the Jan $60 and Sell the $62 for $0.55 cents.

Tip #6: Dividend / Earnings Trading:

Buy any dividend stock right before the dividend date and prior to earnings.
Use the dividend that you’re paid – to buy a PUT on that stock.
Now (with your downside covered for free) – hope for a good earnings call.

HODL’s: (Hold-On for Dear Life)

13 to 17-Week Treasuries @ 4.65%
ICSH == iShares Ultra Short-Term Bond Active ETF
Physical Commodities = Gold @ $2,567/oz. & Silver @ $30.3/oz.
Bitcoin (BTC = $90,700 / in at $4,310)
Ethereum (ETH = 3,130 / in at $310)
HROW – Harrow Health = $39 / in at $12
IBIT – Blackrock’s Spot Bitcoin ETF ($52.1 / in at $24)
ETHA – Blackrock’s Spot Ethereum ETF ($23.3 / in at $20)
GLD – Gold ETF ($236 / in at $212)
Gold ETF: Jan ‘25: +$260 / -$265 CALL-Sp.

Options for Income: **RIOT – Riot Bitcoin Mining

Bi-Weekly: BUY the Stock
BUY Puts 1 Std. Dev. OTM for protection
SELL Covered Calls ½ Std. Dev. OTM for income

Crypto Plays == BTC, ETH, LINK, UNI, AAVE & DOGE.

Please be safe out there!

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Sunday, November 10, 2024

This Week in Barrons: 11.10.2024

This Week in Barrons: November 10, 2024:

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Question: “Would you, Chair Powell, be willingly leave the FED if the President-elect asked you to step down?”

Answer: “No!”

[FYI – Being able to say ‘NO’ = is a very powerful position.]

R.I.P. Quincy Jones … Legendary music producer Quincy Jones, an influential figure in music for over seven decades – passed at the age of 91. He was born on Chicago’s South Side, and collaborated with a Who’s Who of iconic artists from Frank Sinatra to Michael Jackson. Quincy won 28 Grammy Awards, an Emmy, an honorary Oscar, and a Tony, placing him in the elite EGOT club. He produced one of the bestselling singles of all time in “We Are the World”, and one of the bestselling albums in Michael Jackson’s "Thriller."

The issue with making a movie version of your life … is not the casting, but rather the timeframe. Per Seth G: If you consume enough media, you may begin to believe that your life is carefully scripted and you simply go from climax to climax. However, our lives are more muddled, less scripted, and without a soundtrack. Our respective journeys change in ways that no one could have predicted. The difficulty in making the movie of your life – is writing the 90-minute screenplay.

If you’re distraught over the election … this Van Morrison tune could offer some solace … “They’ll be Days like this.”

The Market:

Humanoid robot artist Ai-da … just made history at Sotheby’s Auction House, with its portrait of computer science pioneer Alan Turning selling for $1.3m.

The election winner is … the deficit. Neither party has the cajones to shut off the spending. And that’s why gold and Bitcoin will go higher – together.

Satoshi Nakamoto could not have written a better script. The next U.S. President ran on the premise that they would protect bitcoin, create a regulatory environment that would serve as a tailwind, and that the U.S. would create a bitcoin strategic reserve. When the U.S. embraces bitcoin, other countries will be forced to follow. Combine this with energy deregulation producing lower prices and you could see bitcoin miners becoming an even more attractive opportunity. Tip #1: Watch MARA and RIOT.

A Week of Records:

The S&Ps crossed 6,000 and the DOW 44,000 – for the first time.
Bitcoin hit a new all-time high – crossing over $79,000.
The altcoin market cap crossed back above $1T.
Of the Mag-7: Amazon hit all-time highs, Nvidia replaced Apple as the most valuable company, and Tesla soared 29%.
S&P profits rose 8% YoY in Q3 vs. expectations of 3%.

[ Gain access to VaultCraft here… ]

InfoBits:

Novo‘s new obesity drug CagriSema… aims for a record 25% weight loss.

AOL’s “You’ve Got Mail” voice, Elwood Edwards … died at 74.

TGI Fridays files for Chapter 11 Bankruptcy … and now franchisees are worried that customers are going to rush to redeem $50m worth of unused gift cards that never expire. That will exceed TGIF’s available cash, sparking fears of a bank run on potato skins.

Boeing takes off … Boeing’s 33,000 production workers voted to end their seven-week strike yesterday, approving a 38% pay raise over four years and $12,000 in bonuses.

Pokémon has turned its online trading-card game … into a ‘Catch-em-All’ mobile app. In days, “Pokémon TCG Pocket” was downloaded 10m+ times, and it’s taking in $3m/day from add-on purchases == over +$1B this year alone.

The Australian Prime Minister announced a plan … to ban social media to all citizens under the age of 16.

Lyft will partner with 3 self-driving startups … to bring autonomous rides to Atlanta in 2025.

“Just drop the GPT – it’s cleaner” … ChatGPT acquired Chat.com, and immediately redirected their traffic to ChatGPT. FYI: If you’re suing OpenAI for stealing your content … a judge just dismissed a lawsuit by two news sites against OpenAI, ruling that the AI company's use of that sites' content did not result in any harm.

Tesla crossed the $1T market cap threshold … as investors are betting that a Trump presidency will benefit the automaker.

Crypto-Bytes:

Michigan is the first U.S. state to put its pension fund into Ethereum … putting up $11 million in Grayscale’s Ethereum ETFs.

Kraken is cutting 15% of its workforce … in a bid to streamline operations as it reaches for a leaner, faster organization.

With DJT winning the White House … consensus in the crypto-marketplace is: ‘Buy ‘em All’. DeFi is the biggest gainer, so think: AAVE, LINK, and UNI.

Uniswap (UNI) is arguably the most important DEX in crypto. It will climb higher for 2 reasons:
The new administration is pro-crypto and pro-DeFi.
Trump plans to give current SEC Chair Gensler the boot while also dropping the ocean of existing crypto-lawsuits.

Aave (AAVE) is the king of lending protocols … owning ~65% of the entire lending protocol market.
There’s a boatload of FUD falling off of lending, DEXs, and the DeFi space. There should be one heck of a ride coming up.

BlackRock's Bitcoin ETF (IBIT) … just surpassed its own Gold ETF (IAU) in net assets – hitting $33B in less than a year.

Tom Lee is back with his favorite prediction… Bitcoin to $100,000 in 2024 – due to regulatory clouds clearing-out and our FED being dovish.

[ Visit VaultCraft - here… ]

TW3 (That Was - The Week - That Was):

Tuesday: I’m not buying anything today, but I do like what I'm seeing in Cisco (CSCO). It was hot in the 90's, and has been forgotten as a tech leader. Most of the AI sites will be using CSCO routers and porting equipment, and that may be reflected in their 11/13 earnings.

Wednesday: The S&P is rising over 2% to 5,940, and the NAS is up over 1.6% to 20,674 – as Donald Trump is named the 47^th President of the United States. The power shift in Washington doesn’t end there as the GOP has also taken majority control of the Senate. Watch for strength in asset managers such as BX, BLK, KKR and in Small Caps (IWM +6%) as Trump has positioned himself as a pro-business candidate committed to easing regulation and M&A. Crypto is another winner this morning with Bitcoin up ~7% near $74,000. The reaction is a bit overblown with Goldman (GS) being up +$65, but time will tell.

Thursday: Stocks boomed to all-time-highs yesterday with the S&Ps closing up 2.5%. Crypto rallied, with bitcoin soaring past $76k to a fresh record. Today, investors have their eyes on the FED’s rate decision. Markets are giving our FED a 95% chance of a 25bps rate cut, and if that happens – equities will continue pressing higher. Watch Micron (MU) that has resistance at the $114 / $115 area, but if they can get past that – they could really run.

Morgan’s Moments…

AI labs Decart and Etched just launched Oasis … an AI model that generates playable video game environments in real-time – alongside a playable Minecraft-style demo. While text-to-video has grabbed headlines, Oasis represents something deeper – real-time interactive worlds generated entirely by AI. This could revolutionize how we think about game development and virtual environments, even potentially eliminating the need for traditional game engines.

Our FED lowered rates by 0.25%, and J. Powell said … “Conditions have generally eased, and the unemployment rate has moved up but remains low.” Powell acknowledged the weaker employment and stickier inflation of late, he indicated that our FED’s next move will remain data-dependent.

Next Week: Bonds Caught a Bid...

Bkgd: The inflation resurgence risk is credible given monetary easing, commodity upside, elevated inflation expectations, tight labor; all combined with prospective policies. Bond yields (interest rates) look to be ‘higher-for-longer’ as long-term nominal growth and inflation models point to a new higher range of US inflation due to increased deficit spending.

Euphoria hit markets as the election is over … The Dollar (DXY) foreshadowed the winner with its dramatic move higher, but the rest of the market was just as surprised as everyone else. What really carried the S&Ps was Tesla (TSLA). Tesla started the week flat on the year, and ended up almost 30% on a $1T market cap. Tesla shareholders gained ~$300B in market cap last week.

Volatility was ‘temporarily’ crushed … but long live volatility (VIX). The issue with Bonds (/ZB) still remains. Tip #2: If the 10-Year (TNX) can break above 4.5%, then the VIX will be back with a vengeance.

Bonds (/ZB) remain the action to watch … because they caught a bid this past week – and rates declined. My big question is: Will a bid remain under the bonds OR will they continue their selloff – pushing interest rates into ‘danger’ territory? Honestly, when I view bonds on a 3-year chart – they don’t give me a warm-n-fuzzy feeling.

SPX Expected Move (EM):

Last Week: $151.03 and we moved almost $300.
This Week: $81, and ‘I’ll take the over’.

TIPS:

Per Callum T:

1. Stocks went from DE-risking to RE-risking … as Crypto, Tech, & the Transports are showing speculative revival.

a. Tip #3: The QQQ’s may never see sub-$500 again.

b. Transports making an initial breakout out against the backdrop of an uptrend is quite bullish – and adds to the developing risk-on theme.

2. The “Sell in May – Return in November” mantra … means that the Santa Claus Rally starts NOW.

3. US large caps look Tired … while global / small / value stocks look Wired.

a. Tip #4: Rethink Mag-7 vs IWM (small caps) allocation.

4. Crypto didn’t need a correction in price … but rather a correction in time – in order to set the stage for their next leg higher.

a. Tip #5: +BTC, +ETH, +LINK, UNI, AAVE