Bulls, Bitcoin, & Beyond

Market Moves Yesterday

S&P 500 @ 4,594.63 ( ⬆️ 0.59%)

Nasdaq Composite @ 14,05.03 ( ⬆️ 0.55%)

Bitcoin @ $41,455 ( ⬆️ 3.67%)

Hey Scoopers,

Monday magic unleashed!

👉 Uber shares are up 5%

👉 Gold touches all-time highs

👉 Bitcoin surges past $40,000

So, let’s go 🚀

Uber Part of the S&P 500 Index 👀

Uber shares are up over 5% in pre-market trading after it was disclosed the ride-hailing company will be added to the S&P 500 index, replacing Sealed Air Corp.

The change will take place before the market opens on Monday, December 18th, according to a press release.

Why is it a big deal?

Generally, a company’s stock gains momentum on news that it will be added to the S&P 500 index as fund managers tracking the benchmark acquire these shares.

Uber went public in 2019 and has since wrestled with negative profit margins and a high cash burn rate.

However, in recent months, the company’s mobility and delivery business have turned consistently profitable after Uber was forced to shore up the bottom line amid a challenging macro environment.

In the last two years, unprofitable growth stocks have been pummeled as investors became more averse to investing in money-losing companies.

Uber eliminated over 3,500 jobs in 2020 as demand nosedived amid the pandemic and has since worked on improving its cost structure.

It reported sales of $9.29 billion and a net income of $221 million in Q3. In the last four quarters, its net income has totaled more than $1 billion.

In order to be listed on the S&P 500, companies need to report positive net earnings in the most recent quarter and over the last four quarters. Moreover, they should have a market cap of at least $14.5 billion.

Uber has a market cap of $118 billion, much higher than the median market cap of $31 billion for S&P 500 companies.

Gold Moves Past $2,100/Ounce 🥇

Gold prices climbed to a new record high on Monday, for the second consecutive day, as spot prices of the precious metal surged past $2,100 per ounce. 

Analysts believe gold prices to remain elevated due to multiple factors, including:

👉 Geopolitical tensions

👉 Aggressive buying from global central banks

👉 Possibility of interest rate cuts

Gold prices have risen for two consecutive months, with the ongoing conflict between Israel and Palstine boosting demand.

Historically, gold has been viewed as a safe haven asset, and it thrives during periods of economic turmoil.

A survey conducted by the World Gold Council stated that 24% of central banks intend to increase gold reserves in the next 12 months, as they expect the U.S. dollar to depreciate.

Further, the Federal Reserve and several other central banks hiked interest rates in the past 20 months to combat inflation.

Higher interest rates lower the demand for gold, an asset that does not offer any yield on its investments.

There is a good chance for interest rates to move lower if inflation continues to ease in the near term, acting as a tailwind for the yellow metal.

Bitcoin is Flying 🚀

Bitcoin crossed the $40,000 mark for the first time in 19 months today in anticipation of the approval of a spot Bitcoin exchange-traded fund (ETF) as well as interest rate cuts.

Bitcoin is the world’s largest cryptocurrency, trading 3.7% higher at over $41,000 at the time of writing, gaining close to 150% in 2023.

Last month, officials of the U.S. SEC (Securities and Exchange Commission) met with representatives from BlackRock, Graysacle, and Nasdaq, sparking hopes of the launch of several Bitcoin-backed ETFs.

The institutional adoption of Bitcoin should act as a massive tailwind for BTC prices as billions of dollars will be allocated towards this disruptive asset class.

Headlines You Can’t Miss!

Court delays the liquidation hearing of Evergrande

Alaska Airlines to acquire Hawaiian Airlines for $1.9 billion

How America racked up a $1 trillion credit card bill?

Will holiday shopping boost retail sales?

Bitcoin might surge past $100,000 in 2024

Chart of the Day

Despite an uncertain macro environment, high interest rates, and inflation, the equity markets gained solid momentum last month.

The S&P 500 index just had one of its best months ever, rising 8.92% in November 2023.

Does this mean investor sentiment has improved as we head into 2024, or will equities pull back once again?

DISCLAIMER: None of this is financial advice. This 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.