RF's Financial News: 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

HODL’s: (Hold-On for Dear Life)

13 to 17-Week Treasuries @ 4.85%
ICSH == iShares Ultra Short-Term Bond Active ETF
Physical Commodities = Gold @ $2,690/oz. & Silver @ $31.4/oz.
Bitcoin (BTC = $79,800 / in at $4,310)
Ethereum (ETH = 3,220 / in at $310)
HROW – Harrow Health = $52.5 / in at $12
INDA – India ETF ($54.4 / in at $50)
IBIT – Blackrock’s Spot Bitcoin ETF ($43.7 / in at $24)
ETHA – Blackrock’s Spot Ethereum ETF ($22 / in at $20)
GLD – Gold ETF ($248 / in at $212)
o 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 ALTs == LINK, UNI, & AAVE

Please be safe out there!

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