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Bulls, Bitcoin, & Beyond
Market Moves Yesterday
S&P 500 @ 5,344.16 ( ⬆️ 0.47%)
Nasdaq Composite @ 16,745.30 ( ⬆️ 0.51%)
Bitcoin @ $58,402.50 ( ⬇️ 1.87%)
Hey Scoopers,
Happy Monday! Here’s what we’re covering today:
👉 Akamai crushes estimates
👉 A bear market in 2025?
👉 Bitcoin attracts investors
So, let’s go 🚀
Market Wrap 📉
Stocks moved higher on Friday, building on their incredible comeback from Monday’s violent rout. In fact, the S&P 500 ended the week marginally lower, almost reversing its weekly losses.
Disappointing U.S. payroll data, concerns that the Fed is late in initiating rate cuts, and unwinding of the yen trade drove the sell-off before markets staged a recovery.
Elsewhere, the earnings season is entering its final stages. Around 91% of the S&P 500-listed companies have posted their quarterly results, of which 78% have surpassed Wall Street estimates.
Large-cap giants, including Home Depot, Walmart, and Cisco Systems, are scheduled to report their results this week.
Trending Stocks 🔥
Sweetgreen - Shares of the salad chain popped 33% after it reported revenue of $184.6 million, higher than estimates of $181 million. It provided full-year revenue guidance between $670 million and $680 million, compared to estimates of $674 million.
Doximity - Shares spiked close to 40% after the digital health company reported revenue of $0.28 per share, above estimates of $0.22 per share.
E.l.f. Beauty - Shares sank almost 15% after new guidance pointed to slowing growth for the cosmetics company.
Akamai Technologies Stock Rises 11%
Akamai Technologies posted its best day since 2018 after the cloud company surpassed consensus estimates in its earnings report.
Shares of the company surged 10.9% after it reported adjusted earnings of $1.58 per share and revenue of $980 million, compared to estimates of $1.53 per share and $977 million, respectively.
Valued at $15.6 billion by market cap, Akamai provides cloud computing, security, and content delivery services to enterprises. It has returned 75% to shareholders in the last 10 years, trailing the broader markets by a wide margin.
However, this underperformance makes the tech stock attractive as it trades at 16x forward earnings, which is not too expensive. Analysts remain bullish and expect AKAM stock to surge 14% in the next 12 months.
A Bear Market May Be on the Horizon
Veteran investor David Roche expects a bear market in 2025 due to smaller-than-expected rate cuts, a slowing economy, and the AI bubble.
According to Roche, the Fed will resist reducing rates to the market’s desired level of 3.5%. The Fed’s median rate forecast for 2025 stands at 4.1%, while analysts see rates below 4.1% by the end of September 2025.
Further, Roche explained that slowing profits and lofty valuations tied to AI stocks will lead to a bear market next year.
The Fed’s decision to maintain interest rates at the last meeting was questioned after a weaker-than-expected jobs report stoked recession fears and led to a steep market sell-off.
Roche estimates the Fed will soon proceed with a 25-basis-point interest rate cut. Alternatively, elevated interest rates will lower profit margins over the next four quarters.
Who Bought the Bitcoin Dip?
The sell-off in Bitcoin and Ethereum that began 10 days back wiped out $400 billion in value, spooking investors. However, it seems that newbie crypto traders have bought the dip.
Spot ether exchange-traded funds attracted net inflows of $120 million last week as traders piled into the second-largest cryptocurrency soon after it fell 42% from all-time highs. Data from CoinGlass shows us that spot Bitcoin ETFs added $245 million last Wednesday and Thursday.
Source: CoinGlass
Additionally, Morgan Stanley executives will now be able to pitch investments in spot BTC ETFs for clients with a net worth of over $1.5 million. With $1.5 trillion in assets under management, the investment bank holds around $270 million in Bitcoin ETFs.
Here are some key numbers for cryptocurrency investors right now:
The market cap of all crypto tokens is about $2 trillion right now, compared to $3 trillion at the peak of the 2021 bull run
Spot Bitcoin ETFs have amassed $54.30 billion in assets under management, while Ether funds hold $7.25 billion in total assets
Around $100 million in short bets on Bitcoin was liquidated last week, driving BTC prices higher
Bitcoin has gained 32.4% in 2024 while ETH has spiked “just” 9.3%.
Headlines You Can't Miss!
Stock futures are little changed ahead of key inflation data
‘Deadpool & Wolverine’ tops $1 billion at the box office
U.S. Treasury yields move lower
Hollywood icons may return for AI voice deals
Bitcoin ETF options may launch by the end of 2025
Chart of The Day
Source: Visual Capitalist
The U.S. national debt recently reached the $35 trillion milestone, expanding its debt pile by $1 trillion in 2024 and widening the debt-to-GDP ratio to 98%.
It means the U.S. national debt is equal to the GDP of China, Japan, Germany, India, and the UK, combined. According to an IMF report, given the existing policies, the debt-to-GDP ratio of the world’s largest economy could surpass 140% by 2032.
Since 2020, the U.S. has added $11.8 trillion to its national debt, accounting for over 33% of the current total. The U.S. national debt has risen from $1 trillion in 1981 to $9.2 trillion in 2008. Since 2016, the two administrations have added $15 trillion in total national debt.
Interest costs required to service the debt are forecast to account for 17% of federal spending this year.
Meme of the Day
DISCLAIMER: None of this is financial advice. The newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.