HI Market View Commentary 12-16-2024
LAST WEBINAR FOR THE 2024 CALENDAR YEAR !!!
MERRY CHRISTMAS AND HAPPY NEW YEAR’S !!!
Next Webinar HI Market View Commentary will be Jan 6, 2025
Here are the expectations for this week and the rest of the year:
FOMC Rate Decision Wednesday Noon MST= Flat day tomorrow and flat market until the announcement
98% Probability of a -0.25 rate cut
What are we looking for?= Next Years plot graph for rate cuts, Resting period or break form cutting rates = Will they cut again in Jan or March?
My Expectation of 1% more rate cuts into next year
I would expect us to run into the beginning of next year = IF people take profits at the beginning of the year
IF you are trading or investing you should have been bullish the last two years=THE TREND IS YOUR FRIEND & DON’T FIGHT THE FED
MSTR investments – MicroStrategies
IF They are so Fundamentally Unsound why would you invest in them when you don’t invest in AMZN, TESLA,
Let me work some numbers for you
ITM covered call
BTO 300 shares @ $424.15
STO Jan 26 $420 Short Call for $174.825 of credit
Net debit in the trade = 424.15 – 174.82 = $249.33 = BREAKEVEN for the investment !!!
Max Reward STC or get called away at $420-249.33 = Profit of $170.67 or /COST Basis 68.45% ROI
You can add puts to INCREASE the return on sitting cash BUT,
Very thinly traded at an ITM Covered Call =
YES we are sitting in positions right now with META
360/400 Expiring in Jan 460/500, 500/550, 590/640, 620/700,
It is really nice to have high probability trades that are already profitable sitting to close out for an even better return.
IF you have a red C next to your META position we are trying to close come trades out for a 150%, 164% ROI
New Thursday suggestion = We are stopping the Trade Findings and Adjustments
Wednesday 10AM MST Open Market Trading Q&A session
Earnings dates:
MU 12/18 AMC
https://www.briefing.com/the-big-picture
The Big Picture
Last Updated: 13-Dec-24 15:50 ET | Archive
Optimism in the 2025 air
With 2024 winding down, it is fair to say that the stock market is looking forward to 2025 for a variety of reasons. One of those reasons is the stock market’s outstanding performance in 2024, which happened in spite of continuing geopolitical conflict, a rancorous election season in the U.S., a faltering Chinese economy, stagnant growth in Europe, and rising — yes, rising — interest rates.
The higher market rates reflected festering angst about sticky inflation and an untenable deficit situation but, to be fair, they also reflected the reality that growth in the United States was stronger than expected despite the Fed’s tightening campaign.
A fear of recession was swept away by the economic data, the earnings results, and the Fed signaling a pivot to removing policy restraint as inflation trended toward its 2.0% target. The fear of recession was ultimately supplanted by optimism that the U.S. economy will enjoy a soft landing or no landing at all.
That optimism took a good showing by the stock market that had been underpinned by the outperformance of the mega-cap stocks and turned it into a great showing that was driven by broad-based participation across the market-cap spectrum and optimism about the year ahead in the wake of an election that saw Donald Trump emerge victorious in the presidential race and Republicans secure a fairly tight majority position in the House and Senate.
Looking at 2025, then, the stock market is banking on a lot of good things coming to pass: reduced regulations, the extension of the 2017 tax cuts, a further reduction in the Fed’s policy rate, double-digit earnings growth, and, if the cohort of market pundits has it right, a roughly 10% gain for the S&P 500.
Criticism and Credit
There is optimism in the air.
Much of it is related to President-elect Trump’s political agenda, yet it is also grounded in the Fed’s seeming success in keeping the economy on a growth setting. Notwithstanding 11 rate hikes by the Fed between March 2022 and July 2023, real GDP growth has averaged 2.9% since the third quarter of 2022.
Since the first rate hike, the PCE inflation rate has fallen from 7.0% to 2.3% and the core-PCE inflation rate has dropped from 5.6% to 2.8%. The unemployment rate, meanwhile, is still a relatively low 4.2% and initial jobless claims — a leading indicator — continue to run well below recession-like levels.
The Fed deservedly received criticism for keeping rates too low for too long, which helped fan the inflation flames, but it now deserves some credit for managing the disinflation. Its job is not complete, however, and it is fair to say that other parts of President-elect Trump’s political agenda, which include tariffs and the deportation of illegal immigrants, could reignite inflation pressures.
That risk is also in the air in the Treasury market, which has traded spastically since the election, faltering at first on deficit concerns, rallying back on the news of Scott Bessent being nominated for Treasury Secretary, and sliding again on November CPI and PPI reports that didn’t show any improvement in inflation on a year-over-year basis.
The 2-yr note yield, at 4.24%, is down one basis point for the year, but the 10-yr note yield, at 4.40%, is up 52 basis points for the year.
A continued rise in interest rates that sends the 10-yr note yield above 4.50% and on a path toward 5.00% would suck some of the optimism out of the air and limit return prospects for a market entering 2025 with a rich valuation.
A High Starting Point
At 22.4 x forward twelve-month earnings, the market cap-weighted S&P 500 is trading at a 24% premium to its 10-year average, according to FactSet data. That objective reality is why many pundits are pointing the equal-weighted S&P 500 as a better investment vehicle when considering the year ahead. It trades at 17.3x forward twelve-month earnings, which is only a slight premium to its 10-year average.
That is a fair judgment. The upside is that you are not giving up exposure to the mega-cap stocks. The downside is that you are risking underperformance if the mega-cap stocks continue their outperformance.
The bigger message is that one starts from a high(er) valuation point with both the market cap-weighted S&P 500 and equal-weighted S&P 500, because a lot of good news has been priced in already.
Objectively, that should curtail return prospects, but it doesn’t preclude another year of robust returns knowing that AI enthusiasm remains in the air, that the incoming administration has an unapologetic pro-growth disposition, and that the cohort of mega-cap stocks has yet to upset investor sentiment with any acute reservations about growth prospects.
Important to Stay on Track
All the good things the market thinks will happen in 2025 must now come to fruition. Why? Because they are baked into stock prices already.
Importantly, there can’t be anything that upsets that fundamental view. Why? Because the stock market hasn’t really allowed itself to think bad things will happen. It is looking at 2025 with a glass-is-half full mentality, and it expects the glass to be full by the end of the year.
Should something happen that derails the earnings growth outlook, there will be a meaningful correction. The stock market can continue to sport higher valuations, however, if things stay on track.
That is why things like interest rates, the inflation path, the Fed’s monetary policy, the deficit, and earnings estimates are going to be watched so closely. There is plenty of room for optimism on all fronts, there just isn’t much room for error.
There is a consensus view that 2025 will be another year of positive returns for the stock market. That stands to reason if interest rates remain well behaved and companies deliver on the earnings front, yet it seems to us, given the valuation starting point, that it will require taking on more risk if one wants excess returns.
In that vein, 2025 will require more of an active management style than a passive one. That approach isn’t suitable for everyone, which is fine — and which is why one has to know their risk tolerance.
A passive approach (think indexing) has worked more than fine over the long term, and it is apt to work fine in 2025 if the good things that are expected to happen do happen. In that instance, though, one may find better value opportunities lower on the market-cap spectrum.
The small-cap and mid-cap indices have less demanding valuations relative to their historical averages than their large-cap counterparts do. They will have performance problems, though, if interest rates heat up and/or consumer spending falters.
What It All Means
There was a positive buzz on Wall Street leading up to the election and an unmistakable buzz following the election. The stock market, in a sense, will be playing politics in 2025.
It’s more fun and games now with visions of less regulation and friendly tax policy dancing in its head, but the specter of tariff reprisals, geopolitical conflict, deficit angst, and inflation heating up are elements investors should hope to remain under wraps. Playing politics will be less fun for the stock market if they don’t.
This market may have gotten ahead of itself pricing in good things, but it won’t allow itself to get consumed with the thought of bad things happening. Not now anyway when the political signaling is a tailwind and earnings estimates remain in an uptrend.
The stock market will deal with bad news if it happens, and course correct in a proportional manner. For now, 2025 looks like a year the stock market is ready to embrace with high hopes and higher prices.
—Patrick J. O’Hare, Briefing.com
Where will our markets end this week?
Higher
DJIA – Bearish
SPX – Bullish
COMP – Bullish
Where Will the SPX end December 2024?
12-16-2024 +2.4%
12-09-2024 +2.0%
12-02-2024 +2.0%
Earnings:
Mon:
Tues:
Wed: GIS, JBL, LEN, MU,
Thur: KMX, FDX, NKE,
Fri: WGO
Econ Reports:
Mon: NY fed Empire Mane
Tue Retail Sales, Retail ex-auto, NAHB Housing Market Index, Capacity Utilization, Industrial Production, Business Inventories,
Wed: MBA, FOMC Rate Decision, Building Permits, Housing Starts,
Thur: Initial Claims, Continuing Claims, GDP. GDP Deflator Existing Home Sales, Leading Indicators,
Fri: PCE Prices, PCE Core Price, Michigan Sentiment, Personal Income, Personal Spending
How am I looking to trade?
RIGHT NOW is the time to get ready to back the truck up and load up stocks if the market has a “interest rate or inflation fear” !!!
www.myhurleyinvestment.com = Blogsite
info@hurleyinvestments.com = Email
Questions???
Costco beats on earnings as e-commerce sales jump
Published Thu, Dec 12 20244:23 PM ESTUpdated Thu, Dec 12 20247:18 PM EST
Melissa Repko@in/melissa-repko@melissa_repko
Key Points
- Costco topped Wall Street’s earnings and revenue estimates.
- The warehouse club drew more store traffic, as shoppers bought jewelry, luggage and more.
- E-commerce sales rose 13% in the quarter compared with the year-ago period.
In this article
Costco on Thursday beat Wall Street’s quarterly earnings and sales estimates, as e-commerce sales jumped and shoppers bought jewelry, luggage and furniture.
On the membership-based warehouse club’s earnings call, Chief Financial Officer Gary Millerchip said customers have remained selective with purchases. But, he added, they have shown they’re willing to spend, especially as inflation comes down, if they see a “combination of newness of items, quality and value.”
He said Costco’s strong sales of meat and produce indicate that shoppers are dining out less and cooking at home more.
And, he added, the retailer has seen a “bifurcation with the member,” with some who are still spending on “high-quality premium cuts” and others with “a gravitation towards those lower price per pound items across categories like poultry and cuts of beef and pork as well.”
Here is how the warehouse club did for the fiscal first quarter compared to what Wall Street expected, according to a survey of analysts by LSEG:
- Earnings per share: $4.04 vs. $3.79 expected
- Revenue: $62.15 billion vs. $62.08 billion expected
In the three-month period that ended Nov. 24, Costco’s net income rose to $1.80 billion, or $4.04 per share, from $1.59 billion, or $3.58 per share in the year-ago period. Revenue increased from $57.80 billion in the year-ago period.
Costco has benefited from its reputation for selling bulk items at better value, as U.S. households feel the cumulative effect of higher food and housing prices. The membership-based club also hiked its annual membership fee for the first time in about seven years. The quarterly results are the first Costco has reported since that fee increase took effect in September.
Costco’s membership fee revenue came in at $1.17 billion, compared to the $1.16 billion Wall Street had expected. It jumped by almost 8% year over year, excluding the impact of foreign exchange rates.
But on the company’s earnings call, Millerchip said the membership fee hike didn’t have much of an effect yet because of deferred accounting. It represented less than 1% of fee growth in the quarter, he said.
Comparable sales for the company increased 5.2% year over year. In the U.S., comparable sales rose 5.2% as well.
Customers visited Costco’s stores and website more during the quarter. Traffic rose 5.1% globally and 4.9% in the U.S. The company’s average ticket was up 0.1% worldwide and 0.3% in the U.S., including the negative impact of gas deflation and foreign exchange rates. If adjusted to exclude those, average ticket would have risen 2% worldwide and 2.3% in the U.S.
Gold and jewelry, gift cards, home furnishings, sporting goods, health and beauty aids, luggage kiosk and hardware were all up double digits year over year, Millerchip said.
In Costco’s fresh category, which includes items like produce, sales grew by high single-digits in the quarter, Millerchip said. Sales of meat were up by double-digits, as some members continued to purchase pricier premium cuts and other bought low-cost options, he said.
Costco’s private label brand, Kirkland Signature, is growing faster than the total business, Millerchip said. And, he added, Costco has been able to cut prices on some items, such as Kirkland’s organic peanut butter, its chicken stock and its Sauvignon Blanc.
He said the club’s food courts, optical departments and travel services, such as rental car and cruise bookings, also did well in the quarter, but gas sales declined by low double digits as prices per gallon fell.
E-commerce sales rose 13% in the quarter compared with the year-ago period. The company is gaining market share by shipping big and bulky items, CEO Ron Vachris said on the company’s earnings call, and it hit nearly 1 million deliveries in the quarter, which was a new record.
Online traffic, conversions and average order value all increased year over year, Millerchip said.
Membership renewal rates were 90.4% worldwide, down one tenth of a percent, Millerchip said on the company’s call. He said renewal rates are down slightly as it attracts more new members through digital channels. He said those signups tend to renew at a slightly lower rate.
It ended the quarter with 77.4 million paid household members, an approximately 8% year over year increase, or 138.8 million cardholders.
Costco also hit new records in its U.S. bakery division by selling 4.2 million pies in the three days prior to Thanksgiving and selling 274,000 whole pizzas in its food courts across the country on Halloween, Vachris said on the call.
Costco opened seven new clubs in the quarter and plans to open 29 during the fiscal year, including three relocations, Vachris said. Ten of those clubs will be outside of the U.S. The company has a total of nearly 900 clubs, with 617 in the U.S. and Puerto Rico.
As of Thursday’s close, shares of Costco are up nearly 50% so far this year, surpassing the 27% gains of the S&P 500 during the same period. Shares closed at $988.39 on Thursday.
Alphabet shares jump 6% after Google touts ‘breakthrough’ quantum chip
Published Tue, Dec 10 20242:22 PM ESTUpdated Tue, Dec 10 20244:58 PM EST
Key Points
- Alphabet shares rose Tuesday after the company’s unveiling of “Willow,” its latest quantum computing chip.
- When quantum computing matures, it is expected to be useful for large-scale simulations and code breaking, but that may not be possible for years or decades.
- Google’s announcement was praised on social media by several technology business figures, including Tesla CEO Elon Musk and OpenAI CEO Sam Altman.
In this article
Alphabet shares rose 6% on Tuesday, the day after the company hailed its latest quantum computing chip as a “breakthrough.”
The Google parent company on Monday revealed “Willow,” a quantum computing chip that the company said performed significantly better on a quantum computing benchmark than its predecessor did in 2019. Willow, like similar quantum chips, uses uncertain “qubits” to represent numbers instead of transistors, which are used on traditional semiconductors. Google said its technology can reduce expected errors faster than they appear as quantum chips get bigger, which has been a bottleneck in the development of better quantum computers.
Willow is the second milestone in a six-step strategy to develop quantum computers that can perform useful applications, Google said. The chip has about 100 qubits, but Google is planning to eventually build a system with 1 million qubits.
“Willow brings us closer to running practical, commercially-relevant algorithms that can’t be replicated on conventional computers,” Google wrote in a blog post, adding that the experiment is evidence that suggests that reality is comprised of parallel universes.
“We see Willow as an important step in our journey to build a useful quantum computer with practical applications in areas like drug discovery, fusion energy, battery design + more,” Google CEO Sundar Pichai said on X.
When quantum computing matures, it is expected to be useful for large-scale simulations and code breaking, but that may not be possible for years or decades. Google isn’t the only tech giant working on quantum computing. Nvidia, Microsoft and IBM are also working on the technology, in addition to researchers at startups and universities.
Google’s announcement was praised on social media by several technology business figures, including Tesla CEO Elon Musk and OpenAI CEO Sam Altman.
“We should do a quantum cluster in space with Starship one day,” Pichai replied to Musk.
China’s CSI300 rises amid broader gains in Asia markets as Beijing’s stimulus pledge boosts sentiment
This is CNBC’s live blog covering Asia-Pacific markets.
China stocks were mixed Tuesday amid broader gains in Asia-Pacific markets, following losses on Wall Street that saw the S&P 500 and Nasdaq Composite pull back from record highs ahead of key inflation data.
Sentiment was boosted by Beijing’s announcement of “more proactive” fiscal measures and “moderately” looser monetary policy next year as part of efforts to boost domestic consumption.
Mainland China’s CSI 300 index rose 0.74%, paring earlier gains and closing at 3,995.64, while Hong Kong’s Hang Seng index was down 0.2% as of its final hour.
News of the measures, which came from an official readout late Monday after mainland China market had closed, had sent the Hang Seng index nearly 3% higher that evening.
China’s 10-year bond yield hit a record low Tuesday, and was last at 1.893%.
South Korea’s benchmark Kospi gained 2.43% and led gains in the region, closing at 2,417.84 and marking its best day in almost three months.
Meanwhile, the small-cap Kosdaq surged 5.52% to 661.59 as investors continued to monitor the country’s political situation.
South Korean news agency Yonhap reported that the leader of the main opposition party, Lee Jae Myung, said his party would pass a downsized budget bill for next year through a plenary session later in the day.
Australia’s S&P/ASX 200 closed 0.36% lower to finish at 8,393, after the Reserve Bank of Australia held its benchmark rate at 4.35% for the 10th consecutive time.
Get more from CNBC. Breaking news and updates on WhatsApp.
Japan’s Nikkei 225 climbed 0.53% and closed at 39,367.58, while the Topix gained 0.25% to 2,741.41
| TICKER | COMPANY | NAME | PRICE | CHANGE | %CHANGE |
| .N225 | Nikkei 225 Index | *NIKKEI | 39470.44 | -378.7 | -0.95 |
| .HSI | Hang Seng Index | *HSI | 19971.24 | -425.81 | -2.09 |
| .AXJO | S&P/ASX 200 | *ASX 200 | 8296 | -34.3 | -0.41 |
| .SSEC | Shanghai | *SHANGHAI | 3391.88 | -69.62 | -2.01 |
| .KS11 | KOSPI Index | *KOSPI | 2494.46 | 12.34 | 0.5 |
| .FTFCNBCA | CNBC 100 ASIA IDX | *CNBC 100 | 10117.7 | -122.43 | -1.2 |
In the U.S. on Monday, tech shares struggled and investors prepared for key inflation data that will be released this week.
The broad market S&P 500 fell 0.61% to close at 6,052.85, and the tech-heavy Nasdaq slid 0.62% to end at 19,736.69. The Dow Jones Industrial Average shed 240.59 points, or 0.54%, settling at 44,401.93.
AI bellwether Nvidia saw its shares dropped about 2.6% after a Chinese regulator announced that it was investigating the artificial intelligence chip behemoth for potentially violating the country’s antitrust law.
Advanced Micro Devices, another chipmaker, closed 5.6% lower, while tech giants Meta Platforms and Netflix also struggled.
Bitcoin prices also retreated after topping $100,000 for the first time ever last week, a sign that investors might be souring on risk assets.
— CNBC’s Sean Conlon and Sarah Min contributed to this report.
Elon Musk reveals SEC sent him ‘settlement demand’ after Twitter buyout probe
Published Fri, Dec 13 20243:55 AM ESTUpdated 2 Hours Ago
Key Points
- The U.S. Securities and Exchange Commission has issued a “settlement demand” to Elon Musk, according to a Thursday social media post by the tech billionaire.
- The federal financial regulator is asking Musk to agree to terms including a fine, or “face charges on numerous counts” regarding “Certain Purchases, Sales and Disclosures of Twitter Shares.”
- The SEC has been investigating whether Musk committed securities fraud in 2022 as he sold shares in Tesla and shored up a stake in social network Twitter ahead of his leveraged buyout.
The U.S. Securities and Exchange Commission has issued a “settlement demand” to Elon Musk, the tech billionaire disclosed in a social media post on Thursday.
The post included a copy of a letter sent by Musk’s attorney, Quinn Emanuel Partner Alex Spiro, to SEC Chair Gary Gensler.
The letter said the federal agency had pressured Musk to agree to a settlement including a fine within 48 hours, or “face charges on numerous counts” regarding “Certain Purchases, Sales and Disclosures of Twitter Shares.”
The SEC has been investigating whether Musk, or anyone else working with him, committed securities fraud in 2022 as the Tesla CEO sold shares in his car company Tesla and shored up a stake in Twitter ahead of his leveraged buyout of the social network that is now known as X.
“Oh Gary, how could you do this to me?” Musk said in the post he shared on X late Thursday, along with an emoji showing a face holding back tears and a copy of Spiro’s letter.
In another post on Thursday, Musk wrote that he, “Asked @Grok to draw a picture of @GaryGensler. Very flattering, I think!” That post contained an AI-generated image portraying the SEC chair as a snail-like creature wearing a suit.
A person directly familiar with the probe, who asked to remain unnamed due to the sensitive nature of the matter, told CNBC that the SEC did send a settlement offer to Musk in recent days, but he was given more than 48 hours to respond.
If the SEC cannot reach a settlement agreement with Musk, this person said, charges would not necessarily follow as a next step. When the agency cannot arrive at a settlement agreement with defendants, it will sometimes issue what is called a Wells notice before enforcement staff make recommendations to agency commissioners, who then decide whether or not to file charges.
Gensler, Musk and Spiro did not respond to CNBC’s requests for comment on Thursday.
A spokesperson for the SEC said Friday that the agency doesn’t comment on “the existence or nonexistence of a possible investigation.”
Musk’s lawyer argued in his letter that the SEC has engaged in “more than six years of harassment” of Musk via investigative activity, including by reopening an investigation into the billionaire’s health tech venture Neuralink this week.
Spiro also wrote that he had personally been subpoenaed by SEC staff but refused to comply. He accused the agency of an “improperly motivated campaign against Mr. Musk and the individuals and companies associated with him,” and demanded to know whether the White House or the SEC had directed this action against his client.
In 2018, the SEC charged Musk with civil securities fraud after he tweeted that he was considering taking Tesla private at $420 per share and had “funding secured” to do so. No take-private deal ever materialized.
Musk and Tesla each paid $20 million in fines to the agency, and struck a revised settlement agreement that required Musk to temporarily relinquish his role as chairman of the board at Tesla. Since that time, Musk has repeatedly expressed his disdain for the SEC.
The Tesla, SpaceX and X leader also became a Republican megadonor in recent years, and helped propel President-elect Donald Trump back to the White House.
In July this year, Trump vowed to fire the SEC chairman. After Trump’s election victory, Gensler announced that he would be resigning from his post instead.
In a separate civil lawsuit concerning the Twitter deal, which is a focus of the recent SEC probe, the Oklahoma Firefighters Pension and Retirement System sued Musk, accusing him of deliberately concealing his progressive investments in the social network, and intent to buy out the company.
The pension fund’s attorneys argued that Musk, by failing to clearly disclose his investments in and intentions to buy Twitter, had influenced other shareholders’ decisions and put them at a disadvantage.
Gold hits two-week high in the run-up to U.S. inflation data
Published Mon, Dec 9 202410:54 PM ESTUpdated Tue, Dec 10 20242:14 PM EST
Gold prices hit a two-week high on Tuesday, underpinned by rising geopolitical tensions and expectations of a third U.S. rate cut by the Federal Reserve next week, while the market’s gaze shifted to Wednesday’s U.S. inflation data.
Spot gold was up 1.3% at $2,692.32 per ounce. U.S. gold futures settled 1.2% higher at $2,718.40.
“Concerns of heightened tensions in the Middle East are fostering safe haven bids,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. There is “also a kind of renewed focus on the global easing trend – we’ll see the Bank of Canada cut rates, ECB and SNB later this week, and the Fed most likely next week.”
The spotlight is moving to the U.S. Consumer Price Index (CPI) on Wednesday, which is expected to rise by 0.3% in November, according to a Reuters poll, and the Producer Price Index (PPI) on Thursday, both pivotal in shaping the Fed’s rate-cut decisions.
“The CPI data will have limited impact on gold, especially if we get a print around the expected figure. A hot CPI report will reduce the odds of rate cuts in early 2025 further,” said Fawad Razaqzada, market analyst at Forex.com.
With two U.S. rate cuts so far this year, traders predict an 86% chance of a further 25-basis-point cut at the Fed’s Dec. 17-18 meeting, according to the CME FedWatch tool.
Gold is considered a safe investment during economic and geopolitical turmoil and tends to thrive in a lower interest rate environment.
Elsewhere, China will adopt an “appropriately loose” monetary policy and a more proactive fiscal approach next year, its Politburo was quoted as saying on Monday.
“Any big announcements should give gold a boost since China is the largest consumer nation, and especially ahead of the Lunar New Year celebrations when jewelery demand for gift-giving rises,” Razaqzada added.
Spot silver added 0.7% to $32.04 per ounce, platinum rose 0.5% to $940.90 and palladium was down 0.4% at $969.52.
https://finance.yahoo.com/news/heres-why-microstrategy-mara-holdings-205243605.html
Here’s Why MicroStrategy, Mara Holdings, and Riot Platforms Stock Were All Up Big Today
Jon Quast, The Motley Fool
Mon, December 16, 2024 at 1:52 PM MST 4 min read
In This Article:
Shares of MicroStrategy (NASDAQ: MSTR) jumped on Monday, with the stock up about 5% as of 2 p.m. ET. And it was up for multiple reasons. On Friday (after the market closed), Nasdaq announced that the stock was going to be included in the Nasdaq-100 index — a list of roughly 100 non-financial companies. It’s an unbelievable development for the company considering its market capitalization was less than $1 billion just five years ago, which was far too small for Nasdaq-100 consideration.
The incredible rise of MicroStrategy stock has been due to its aggressive investments in the world’s largest cryptocurrency: Bitcoin. According to a Dec. 16 financial filing, the company just purchased 15,350 Bitcoins during the past week alone, bringing its total holdings to about 439,000 Bitcoins.
That’s a big deal considering the price of Bitcoin is up about 1,500% during the past five years. In fact, it even hit a new all-time high today at over $107,000 per Bitcoin. And as Bitcoin’s price has gone up, MicroStrategy’s holdings have consequently increased in value, making it one of the most valuable companies in the world and earning it a spot in the Nasdaq-100.
MicroStrategy’s success also inspired other companies to use the same playbook. Mara Holdings (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT) are two of the largest Bitcoin mining companies in the world. But both are now aggressively buying Bitcoin as well, following in MicroStrategy’s footsteps. With Bitcoin up today, both Mara and Riot were up about 10% as of 2 p.m. ET.
Right now, everything just keeps going up
As of Dec. 9, Mara held 40,435 Bitcoins. More than 20,000 of these have been mined with the company’s normal business operations. But in recent months, the company has been buying even more Bitcoin on the open market.
The same is true for Riot. In a press release today, management said that it closed on a previously announced debt offering, raising $579 million after expenses. The company intends to use all of this money to buy Bitcoin, which should allow it to buy almost 5,500 Bitcoins at the current price. These will go with the 16,728 Bitcoins it already owned as of Dec. 13.
The relationship between the price of Bitcoin and the stock prices of MicroStrategy, Mara, and Riot is becoming somewhat symbiotic. When Bitcoin goes up, the value of these three stocks also goes up because of how much Bitcoin each company holds. But as these companies become more valuable, they’re able to access more funds to buy more Bitcoin, which further drives up the price.
Why the U.S. government is saying all citizens should use end-to-end encrypted messaging
Published Sun, Dec 15 20249:30 AM EST
Cheryl Winokur Munk@CherylMunk
Key Points
- The federal government recently revealed a massive hacking campaign called Salt Typhoon that compromised the nation’s largest telecommunications companies including AT&T and Verizon, and which agencies including the Federal Bureau of Investigation say was orchestrated by China.
- While the targets of cyberattack were mostly “high value” like government officials, the FBI, CISA, and the National Security Agency published a joint guide to help protect Americans following the hack.
- One suggestion is to use end-to-end encryption, a method that makes communications more secure.
In this article
Think twice before sending your next text message. Or better yet, make sure you are using an end-to-end encryption method.
Consumers regularly use different types of messaging technology from the biggest technology companies including Apple, Alphabet and Meta Platforms, including iMessage, Google Messages, WhatsApp and SMS, but the level of protection varies. Now, the U.S. government is expressing greater concern after a recent massive hack of the nation’s largest telecom companies.
Last month, the Cybersecurity and Infrastructure Security Agency and the Federal Bureau of Investigation revealed a campaign by hackers associated with China, Salt Typhoon, that compromised AT&T and Verizon, and others, and was one of the largest hacks of U.S. infrastructure in history. Following that warning, CISA, the National Security Agency, the FBI and international partners published a joint guide to help protect Americans. One suggestion is to use end-to-end encryption, a method that makes communications more secure.
End-to-end encryption helps ensure that only the intended recipients can read your messages as they travel between your phone and another person’s phone. Secure messaging apps use end-to-end encryption to protect communications from hackers, surveillance and unauthorized access, so even messaging app providers can’t read your messages.
“All things being equal, if you have the opportunity to use a platform that’s end-to-end encrypted, you should,” said Michael Hughes, chief business officer of Duality Technologies, which allows organizations to share and analyze sensitive data using encryption.
Many consumers don’t know their options for communicating securely over messaging apps. Here are the basics.
WhatsApp, Signal among best end-to-end options
Consumers use different messaging apps for various purposes, often without giving a second thought to security. However, there are notable differences among platforms that people need to be aware of.
From a security perspective, free messaging apps like Meta’s WhatsApp and Signal — whose co-founder was one of the creators of WhatsApp — are considered the best because end-to-end encryption is built in. That makes these apps highly preferable to SMS and MMS, two older methods of messaging that don’t offer end-to-end encryption, said Trevor Horwitz, founder of TrustNet, a cybersecurity and compliance services provider.
Even platforms considered the best for end-to-end encryption have downsides. Signal is a favorite among many privacy enthusiasts because its mission emphasizes not collecting or storing sensitive information. This can be especially compelling for people who are wary of WhatsApp’s parent Facebook and its privacy practices. The downside to Signal is it’s not as widely used as WhatsApp and if your contacts aren’t on it, you can’t communicate, said Roger Grimes, an analyst at KnowBe4, a security platform provider.
There are also paid messaging apps that are end-to-end encrypted, such as Threema. It’s privacy by design and no phone number or email address is required, but it costs a few dollars, and getting your friends and family to join when there are free options that are already popular might be a challenge.
Most people will use encryption “if it’s default and they don’t have the slightest inconvenience,” Grimes said.
RCS and iMessage
Many messaging platforms now use RCS, which stands for Rich Communication Services. It’s a successor to SMS and MMS that has enhanced features and also offers the ability for end-to-end encryption, though not by default on all devices. For example, RCS messages using Google Messages are automatically upgraded to end-to-end encryption, but Apple’s implementation of RCS on iPhones is not end-to-end encrypted, Horwitz said.
For any Apple device user, the company’s proprietary iMessage app is end-to-end encrypted, but for users sending RCS messages through other text plans, such as a mobile carrier text option, end-to-end encryption isn’t offered. As Apple explains itself of sending messages through non-iMessage RCS options: “They’re not protected from a third-party reading them while they’re sent between devices.”
Additionally, not all devices are compatible with RCS and it’s not universally supported by carriers. Plus, there are compatibility issues between some iPhone and Android devices that are still being worked out, Horwitz said.
Facebook Messenger gaps in encryption
It’s even more complicated because technology companies have multiple messaging products and not every application from a particular provider supports end-to-end encryption in the same way. For example, Facebook Messenger offers end-to-end encrypted messages, but not in all cases. According to Facebook, some products don’t currently support end-to-end encryption, such as community chats for Facebook groups, chats with businesses or accounts using business messaging tools, Marketplace chats and others.
Consumers should try to dig deeper into the apps they are using to understand how end-to-end encryption works for a particular app, said Deirdre Connolly, cryptography standardization research engineer at SandboxAQ, an AI applications developer. This information is often available in the support or privacy section of a provider’s website. But even then, it can be hard to find and decipher. “You have to go into the fine print,” Connolly said.
Google vs. Apple
Google Messages is the default messaging app on many devices running the Android operating system and many people use it to communicate, but consumers need to understand that not all messages sent or received using the app are end-to-end encrypted. The app supports end-to-end encryption when messaging other users using Google Messages over RCS, according to the company. But messages aren’t end-to-end encrypted when communicating with an iPhone user, for example. Text messages appear dark blue in the RCS state and light blue in the SMS/MMS state. Users will also see a lock symbol when end-to-end encryption is active in a conversation.
In Apple’s case, communications between two iMessage users are end-to-end encrypted, but iMessage is an Apple-specific platform. That means, at present, communications between iMessage users and Android device users aren’t end-to-end encrypted. A green message bubble instead of a blue one indicates the message was sent using MMS/SMS instead of iMessage.
In fact, a Department of Justice antitrust case against Apple harps on the failure to offer end-to-end encryption outside its iOS messaging app as a monopoly concern.
Protocols are being developed to allow end-to-end encryption between different communication platforms using RCS, but that’s still a work in progress. “Work with key industry stakeholders is progressing well and we look forward to updating the market in the coming months,” said a spokesperson for GSMA, an industry organization spearheading this effort.
Phone settings and ongoing risk of hacks
One thing people should do is check the settings on their phones. Many consumers have older phones and those who don’t have auto updates enabled may miss critical security updates, which could include messaging apps that allow for end-for-end encryption, said Chris Henderson, senior director of threat operations at Huntress, a cybersecurity company. Also, with a new phone, settings on transferred apps might not migrate. If you have enabled end-to-end encryption for apps on your prior phone, it’s also a good idea to check that the settings are enabled on the new phone as well, Henderson said.
End-to-end encryption is not foolproof because hackers can intercept users’ communications in other ways, such as if the device itself is compromised, Horwitz said. For security purposes, it’s also important to keep your devices healthy by installing all software updates, avoiding sketchy downloads, and performing periodic reboots.
Even so, using end-to-end encryption is a good practice, when available. “Threat actors go where the masses go,” said Kory Daniels, global CISO for Trustwave, a cybersecurity and managed security services provider. “If the masses are still using unencrypted communication methods, [bad actors] will continue to exploit the opportunity until users begin to evolve their digital behaviors.”
The market’s most important stock is faltering
Published Mon, Dec 16 20249:19 AM ESTUpdated 4 Hours Ago
The stock market is riding high, trading around record levels. Nvidia, arguably the most important stock on Wall Street, isn’t doing nearly as well lately.
Nvidia shares are down nearly 3% in December, while the Nasdaq Composite is up 3.7% during that time, and the S&P 500 is up 0.3% for the month. On top of that, the stock is 9.8% below a record closing high reached Nov. 7, putting it within striking distance of entering correction territory.
Roth MKM’s JC O’Hara also warned that the stock faces a key technical test this week.
“This week we expect another test of a zone of key chart support for NVDA. The $125/$130 area will be paramount for the bulls to defend. If NVDA breaks lower, and breadth continues to weaken, the market will surely stumble,” wrote O’Hara, the firm’s chief market technician, in a Sunday note.
The stock closed at $134.25 per share on Friday. It was up slightly on Monday.
Nvidia’s recent weakness also comes as Wall Street deals with another concerning trend.
Friday marked the 10th session in a row in which S&P 500 decliners outnumbered advancers. That, according to Deutsche Bank’s Jim Reid, is the longest such streak going back to 1996.
“We have seen this show before. Money continues to enter the market, but the cash has refocused its sights on the largest names,” O’Hara wrote.
We wrote about this trend last week, noting that the S&P 500 typically does well a year after such a long streak of negative market breadth. That said, if the few stocks that are actually advancing begin to falter, it could spell trouble for the broader market.
Elsewhere Monday morning on Wall Street, Jefferies downgraded Ford Motor to underperform from hold.
“De-stocking has become an overhang with US inventory drifting up to 96 days (+1 in November, 26/18 days above GM/STLA) in spite of solid US sales +15% (+4% ytd),” the analyst wrote to clients on Monday. “Sustained production supports the reduced 2024 guidance but suggests a more difficult start to 2025.”
Correction: A previous version misstated how much the S&P 500 was up for the month.
HI Financial Services Mid-Week 06-24-2014