Market Analysis by covering: Nasdaq 100, Gold Spot US Dollar, S&P 500, Strategy Inc. Read 's Market Analysis on Investing.com
Bitcoin price today: hovers near 6-mth low around $95k as Fed cut bets fadeWe are surprised that the financial markets were surprised by the hawkish tone of remarks from Fed officials this past week. Collectively, a few participants on the Federal OpenIn prepared comments during his October 29 presser, Fed Chair Jerome Powell stated,"A further reduction in the policy rate at the December meeting is not a foregone conclusion—far from it.
Policy is not on a preset course." He was clearly pushing back against the widespread view that another rate cut would occur before the end of this year. On Friday, the odds of that happening dropped to less than 50% , according to the CME FedWatch Tool.fell sharply on Thursday, led by AI-related and Financials sector stocks, but didn’t breach its 50-day moving average . In addition to second thoughts about Fed easing, investors are having second thoughts about the AI trade, as we’ve noted in recentWe had been expecting a pullback. On November 1, we observed that"hile earnings are bullish, sentiment is bearish in the very short term. There are too many bulls." Now, we expect to see a significant drop in the bull-bear ratios when this past week’s data are released this week . We are sticking with our 7000 target for the S&P 500 by the end of this year because we expect that investors will soon conclude that the many known unknowns about the AI trade will lead to a happy outcome rather than an unhappy one . As we have observed repeatedly over the past four years, the most widely anticipated recession of all time didn’t happen. Now we suspect that the most widely predicted financial market implosion in history might not happen either. In this regard, we are happy to see that the front cover ofSome of the air did come out of financial markets since the S&P 500 rose to a record high on October 29. That actually reduces the likelihood of a bursting stock market bubble. Thefell below its 200-day moving average last week and is now in a 24.7% bear market since this year’s peak on October 6 . On July 18, the GENIUS Act established stablecoin as the cryptocurrency most likely to be used for transactions, thus eliminating this role for bitcoin. The GENIUS Act might have burst the balloon inflated by financial genius Michael Saylor. He was featured on the front cover of the January 30, 2025 issue offrom this year’s high on July 17 . The Magnificent-7’s stock prices have lost some air too, falling 6.0% since October 29 . During the pandemic, these seven stocks were prized for their strong cash flows and asset-light balance sheets. When the Fed tightened monetary policy, they were favored for their low debt burdens. Soon after ChatGPT was introduced in late 2022, they were once again regarded as winners, especially the cloud providers among them. But in recent months, investors have become concerned that the Magnificent-7 companies are spending too much on AI infrastructure. The concern is that they will have excess capacity. Ironically, some AI-related stocks ) have been hit recently because building new data centers is taking longer than expected due to electricity shortages and other challenges. Another concern is that the demand for more AI cloud capacity has been driven by the computing power required to train Large Language Models rather than by final demand from consumers and businesses. Michael Burry has also charged that the hyperscalers should be depreciating their GPU chips over 2- to 3-year periods rather than longer ones. These are all legitimate concerns. However, they don’t add up to an AI bubble that is about to burst, in our opinion.Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes.and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website. It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
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