Observe. Think. Chat. Do. Trade. Repeat…
Bitcoin also broke through the 51000 level, marking the first time it has hit this value since December 2021.
The price rise continues a rally that began in January 2023. Bitcoin is up more than 21% in 2024 so far.
The Amazon executive chairman notified the U.S. SEC – Securities and Exchange Commission of the sale of 11,997,698 shares of common stock on the 7th and 8th February 2024.
The collective value of the shares of Amazon, which is based in Seattle where he founded the company in a garage around thirty years ago, was about $2.04 billion.
In a separate SEC filing, Bezos listed the proposed sale of 50 million Amazon shares on or around 7th February 2024 with an estimated market value of $8.4 billion.
Jeff Bezos moved from Seattle to Miami in November 2023, shortly before he announced his plan to sell up to 50 million Amazon shares by January 2025.
Florida does not have a capital gains tax, unlike Washington state, which imposes a 7% tax on any gains of more than $250,000 from the sale of stocks and bonds. Therefore, by moving to Florida, Bezos could save up to $600 million in taxes on his stock sale – more than enough for a luxury yacht and 2 or 3 more luxury properties.
But, of course, we do not know if this was the real reason for his move.
Arm shares soared 29% on Monday, extending last week’s rally as investors continue to applaud the chipmaker’s better-than-expected third-quarter earnings and its position in the artificial intelligence boom.
Arm is now up 93% since it reported quarterly figures on 8th February 2024. There is no obvious reason for the 29% climb on Monday. The fear of missing out (FOMO) could be playing a part in the meteoric share price move.
The stock has almost tripled since Arm’s initial public offering in September 2023, closing at $148.97 and is now worth almost $153 billion, that’s a little more than $30 billion below Intel’s market cap.
Last week, Arm said it could double the price for its latest instruction set, which accounts for 15% of the company’s royalties, suggesting it can expand its margin and make more money off new chips. It also said it was breaking into new markets, such as cloud servers and automotive, due to AI demand.
Its royalty strength combined with Arm’s optimistic growth forecast has made the company the latest AI darling among investors, despite a higher earnings multiple than Nvidia or AMD.
A solid earnings season, easing inflation data and a resilient economy have charged 2024′s market rally. It has helped propel the Nasdaq 100 to close at these new highs!
We are enjoying good news at an economic and earnings level, and the market is reacting positively. The longer the good news story plays out, the more likely it will be that the market will hold from here.
FOMO or the fear of missing out is likely playing its part here too.
Stocks rose on Friday 9th February 2024 after December’s revised inflation reading came in lower than first reported, and the S&P 500 closed above the key 5,000 level as strong earnings and economic news came in.
A solid earnings season, easing inflation data and a resilient economy have charged 2024′s market rally. It propelled the S&P 500 to close above the 5,000 level after first touching the milestone during the trading week. The index first crossed 4,000 in April 2021.
We are enjoying good news at an economic and earnings level, and the market is reacting positively. The longer the good news story plays out, the more likely it will be that the market will hold from here.
But it won’t take much to spoil the party, right now I don’t know what that might be…?
FOMO or the fear of missing out is likely playing its part here too.
After a decade-long bull run throughout the 1980’s, the Nikkei 225 index reached an all-time high of 38,915 on December 29, 1989, the last trading day of the year.
Few could have imagined, on New Year’s Eve of 1989, that the index would be lower 34 years later. As the New Year arrived, the bubble burst.
And now, Japan’s stock markets are on a tear and closing in on that elusive 38195 high of 1989 – but there’s a catch – the Zombies are coming.
Zombie firms are businesses that are unprofitable and struggling to keep afloat. They don’t have excess capital to invest and grow the business, or to pay down the loan capital.
Concerns about zombie firms are coming into focus as the Bank of Japan is tipped to raise interest rates in 2024 for the first time since 2007.
Japan’s stock markets have been on a meteoric run since the start of 2023, repeatedly breaching 33-year highs and outperforming the rest of Asia.
However, there are rising concerns that so called ‘zombie’ firms, which are unprofitable and struggling to keep afloat, could cut short that rally. The Bank of Japan is widely expected to raise interest rates this year, and that could easily tip many of these firms into bankruptcy, which could have a broader impact on the economy and stock market,
Zombie firms are nothing new in Japan. They first emerged after the stock ‘bubble’ and subsequent crash of the 1990s, when banks continued to support companies that would have otherwise gone bankrupt.
The pandemic of 2020 accelerated the problem of zombie businesses, with the number of zombie firms in Japan reportedly jumping by around 33% between 2021 and 2022.
Some experts argue that zombie firms are a drag on Japan’s productivity, innovation, and growth, as they occupy resources and crowd out more efficient firms. The debate on how to deal with zombie firms is ongoing and may have implications for Japan’s economic recovery and future prospects.
Others suggest that zombie firms may have a positive effect, such as preserving employment, social stability, and industrial diversity.
Surely, there is no room for inefficiently run businesses making little or no profit in any economy.
Watch out for the Zombies!
Many major indices have recorded double-digit gains. However, some analysts have warned that the rally may not last, as it has been driven by a few large-cap technology and growth stocks, while many other sectors and regions have lagged behind.
A stock market rally is a broad and rapid rise in share prices, often defined as a 20% increase from a recent low.
This could indicate a lack of breadth and sustainability in the rally, and potentially signal a market pullback, correction or even a crash in the future.
Chartists with their technical analysis might see a pattern that points to a substantial upside, but they should not get too carried away with their own observations, right now would be a sensible time for markets to find level ground, if only temporarily.
The bullish view is that the ‘laggards’ should catch up the ‘mega cap’ stalwarts once again. The bearish view is that the ‘mega cap’ stocks’ will realise they’ve gone too far and need to ride back to the rest of the market. Too few stocks in the same sector hold the balance of power – go check out the Magnificent 7 or even the old FANG stocks.
Either way, there ought to be an opportunity for underrepresented sectors and industries to gain lost ground.
The question is, will there be a pause to allow laggards to catch-up, or will the mega caps simply continue on their march?
The index, which first breached the 4,000 level in April 2021, added around 0.82% to close at 4,995.06. During session highs, the S&P hit 4,999.89. Quarterly results signalled a thriving U.S. economy.
Are investors getting swept away with the latest wave of AI related tech results? Quite possibly, as some of what we’re seeing could be based on FOMO (fear of missing out) as traders/investors don’t want to be left behind like they were last year.
However, one undeniable fact is that the U.S. economy isn’t facing as recession any time soon as predicted by many.
Founded by Mark Zuckerberg and his fellow Harvard students in 2004, Facebook has grown from a college network to a global phenomenon, with over 3 billion monthly users and counting.
Facebook has also changed the way we communicate, share, and connect with each other online, enabling us to keep in touch with friends and family, discover new content and communities, and express ourselves freely.
Controversy
However, Facebook has also faced many controversies and challenges over the years, such as privacy issues, misinformation, child safety, and political scrutiny. Facebook has been accused of violating user data, spreading fake news and hate speech, enabling cyberbullying and online abuse, and influencing elections and public opinion.
Facebook has also faced competition from other platforms, such as TikTok, Snapchat, and X, as well as regulatory pressure from governments and activists.
Evolving
As Facebook turns 20, it is still evolving and expanding under its parent company Meta, which also owns Instagram and WhatsApp. Meta’s vision is to create a metaverse, a virtual reality where people can interact and experience immersive digital worlds. Meta also aims to invest in artificial intelligence, blockchain, and cloud computing, as well as social good initiatives, such as connectivity, education, and health.
Facebook’s future is uncertain, but it is undeniable that it has shaped the history and culture of the internet and the world, for good and bad.
See BIG tech results here as Meta share price gains 20% after positive earnings impress Wall Street.
Mark Zuckerberg is currently the third richest person in the work coming with a wealth of $161 billion. Not a bad income for 20 years’ work.
Whatever happened to myspace?
AI trading bots are becoming more popular among investors who want to take advantage of the speed, accuracy, and efficiency of AI technology. But is this a good thing for the future of investing?
AI ‘trading bots’ could transform the world of investing
AI ‘trading bots’ also pose some challenges and risks
AI ‘trading bots’ are not a mystical ‘get rich quick solution’ that can guarantee success in the world of investing. They are tools that require careful selection, evaluation, and supervision by human input and for the human trader to maintain ultimate control.
We should always be aware of the benefits and limitations of AI technology.
Three of the Magnificent 7 results dominated the headlines: Meta, Amazon and Apple. Nasdaq and S&P 500 gained in ‘after the bell’ trading. This after a punishing day for Alphabet and Microsoft, despite good results.
Nasdaq 100 closed at: 17344 but climbed above 17500 in after-hours trading.
Shares of Meta surged 15% after the social-media giant defied analysts’ estimates. It posted earnings of $5.33 per share on revenue of $40.11 billion. The company also declared its first-ever dividend payment. Share buy-back was also announced.
Investors also enjoyed Amazon’s earnings, which easily topped Wall Street’s predictions. The ecommerce giant also provided a strong positive outlook. The stock jumped 7% in extended trading.
Q4 was a record-breaking Holiday shopping season in the U.S. and closed out a robust 2023 for Amazon. Amazon has much planned for 2024.
But Apple didn’t benefit from the same treatment despite posting strong results.
Apple also exceeded estimates, reporting revenue growth for the first time in a year. But shares slid more than 2% in extending trading after it posted a 13% decline in sales in China.
Apple’s outlook suggesting weak iPhones sales may have also disappointed investors.
As the AI market expands so too will AI powered personal computer (PC). These are personal computers embedded with processors specifically designed to perform AI functions such as real-time language translation. Intel has already announced its AI powered chip for the PC.
Tech research firm Canalys in a December report said the boom in generative AI is expected to boost PC sales as consumers are seeking devices with AI features, predicting that 60% of the PCs shipped in 2027 will be AI-capable.
An explosion of interest in AI was sparked by the launch of ChatGPT in November 2022 as the chatbot went viral for its ability to generate human-like responses to users’ prompts.
Microsoft was quick to adopt the Technolgy and incorporate AI into its Bing search engine. Other companies such as Amazon, Alphabet (Google), Arm, Meta, Tesla and Apple are all heavily involved in AI development too.
Total gold demand stood at 4,899 tons in 2023 compared to 4,741 tons in 2022. Gold purchases from central banks led to last year’s surge, with purchases exceeding 1,000 tons for two consecutive years.
Prices reached an all-time high of around $2,135 an ounce in December 2023 as central banks and retail buyers increased their gold investments.
Buyers have many outlets from which to make their gold purchases. Costco recently reported selling over $100 million worth of gold bars in the final quarter of December 2023. Weird to think that we can now buy carats with carrots.
According to some analysts’ gold purchases this year are unlikely to meet 2023 levels, but a fall in inflation could prevent a drastic drop in demand.
When inflation drops significantly, consumers will start to feel ‘better-off’, and this could mitigate some of the drop in demand.
A Gold carat is a unit used to measure the purity of gold, with a carat representing 1/24th part of the whole.
Pure gold is 24 carats, meaning that it is 100% gold with no other metals added. However, gold used for jewellery and other applications is rarely pure, and its purity is measured in carats to determine its value.
In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped 2% after the tech giants, part of the Magnificent Seven posted quarterly earnings. However, both companies achieved on both top and bottom lines. However, advertising revenue for Alphabet came short of analysts’ expectations.
The tech sector powered the market rally from 2023 into 2024 and is now trading at a relatively high valuation of nearly 29 times its 2024 earnings, according to recent figures. Investors will need to see earnings expansion in order for the tech companies to be able to maintain their elevated levels.
Results were good but not good enough according to Wall Street as stocks were priced for perfection and that wasn’t delivered.
Even though the results were better-than-expected, investors are likely selling because they just want to take some money off the table.
Absolute perfection comes at a price on Wall Street.
Despite high inflation and geopolitical unrest, the equity market in 2023 was strong, compared to a very weak year in 2022. It follows a record loss of 1.64 trillion Norwegian kroner for the whole of 2022, which the fund attributed to ‘very unusual’ market conditions at the time.
Norway’s sovereign wealth fund on Tuesday 30th January 2024 reported a record profit of 2.22 trillion kroner ($213 billion) in 2023, supported by robust returns on its investments in technology stocks.
The ‘Government Pension Fund Global’, one of the world’s largest investors, reportedly said the fund marked its highest return in kroner ever, with the fund’s return on investment last year coming in at 16% for the year.
Norway’s sovereign wealth fund, the world’s largest, was established in the 1990s to invest the surplus revenues of the country’s oil and gas sector. To date, the fund has put money in more than 8,500 companies in 70 countries around the world.
See wealth fund rankings table here
It is the opposite of flashy logos, loud colors, and fast fashion. Quiet luxury is about investing in pieces that are durable, versatile, and refined.
Some examples of quiet luxury brands are Hermes, Prada-owned Miu Miu, Brunello Cucinelli, Compagnie Financière Richemont and Swatch Group, The Row, Totême, Tove and LVMH. Quiet luxury is also influenced by social changes, popular culture, and economic factors. It reflects a desire for simplicity, sophistication, and sustainability in a seemingly never-ending chaotic world.
Quiet luxury was one of last year’s biggest viral fashion trends, but unlike other short-lived fads on TikTok or Instagram, this one has made its way into investor portfolios and shown lucrative returns.
Luxury stocks have long been regarded by some as an effective hedge against inflation.
LVMH shares jumped more than 8% on Friday 26th January 2024, after the world’s largest luxury group posted higher-than-expected sales for 2023 and raised its annual dividend.
The owner of Louis Vuitton, Moët & Chandon and Hennessy, as well as brands including Givenchy, Bulgari and Sephora, on Thursday night 25th January 2024 reported sales amounting to 86.15 billion euros ($93.34 billion) for 2023, forecasts. This equated to a 13% growth from the previous year.
The result was boosted in particular by 14% annual growth in the critical fashion and leather goods sector, along with 11% growth in perfumes and cosmetics. Wines and spirits meanwhile posted a 4% decline.
Bernard Arnault is one of the top 10 wealthiest people in the world.
Is there room in your portfolio for a luxury brand?
The collaboration with Baidu will facilitate Samsung’s latest Galaxy S24 smartphone series with advanced features such as advanced typesetting, real-time call translation and intelligent summarization.
Samsung recently revealed its latest Galaxy S24 lineup with AI-powered features as it attempts to overtake the Apple iPhone.
Last year, Honor, a spin-off from Chinese company Huawei, held the second spot with almost a 17% market share, followed by Vivo, Huawei and then Oppo.
One of the biggest changes in 2023 was Huawei’s return to the top five in China in the Q4. The iphone has been one of the world’s best-selling selling products of all time.
Since the introduction of the Apple iphone in 2007 by Steve Jobs, its inventor and company joint founder, it has gone on to sell 2.3 billion and has over 1.5 billion ‘active’ users. Not bad for a product that investors initially called ‘dead on arrival’ due to lack of interest and sales.
In 2007 the Nokia 3310 was the clear market leader and easily king of the mobile phone market. Nokia sold 7.4 million units in 2007 – Apple sold just 1.4 million. Nokia was the ‘go to product’. But not for long.
Oh my, how things have changed. Apple is the now the world’s best-selling product (not just the world’s best-selling phone) – with Nokia and many others left trailing in the dust.
It was the apps that done it; having a product that could be any number of different ‘products’ in one and held in your hand was a game changer – and that changed the world.
The rest is history.
The achievement comes nearly two weeks after Microsoft eclipsed Apple as the world’s most valuable public company on 12th January 2024. However, Apple has reclaimed top spot – its market cap closed at around $3.01 trillion on Wednesday 24th January 2024.
Microsoft shares are up more than 7% year to date as investors remain bullish about the company’s investments in artificial intelligence.
It is strongly expected that Microsoft will deliver good results in the Q2 earnings report, because of its leadership position gained in generative AI.
Bitcoin climbed to touch $49,000 after the SEC recently gave the go ahead for the Bitcoin ETF. The last time I checked it was at $39,000 (23rd January 2024). Oh, dear me – the dramatic pain of volatility.
Bitcoin volatility has increased after the launch of the first spot Bitcoin ETFs in the United States. The price of Bitcoin (BTC) rocked wildly, reaching a high of $49,000 and a low of $46,000 in just hours of trading.
This caused liquidations of millions in the Bitcoin market. Some analysts predict that the ETFs will bring more institutional investors and liquidity to the Bitcoin market, while others warn of the risks and challenges of the new investment vehicle.
Bitcoin ETFs are funds that track the price of Bitcoin and trade on stock exchanges, allowing investors to gain exposure to Bitcoin without buying or storing it directly.
Leaders at some of the world’s leading artificial intelligence (AI) companies are expecting a form of AI on a par with, or even exceeding human intelligence to arrive sometime in the near future. But what it will eventually look like and how it will be applied are unknown.
Leaders from OpenAI, Microsoft and Google’s DeepMind, and many other major tech companies debated the risks and opportunities presented by AI at the World Economic Forum in Davos, Switzerland in January 2024.
AI has become the talk of ‘town’ around the world through 2023, mainly due to the success of ChatGPT, OpenAI’s popular generative AI chatbot, brought to us by Microsoft. Generative AI tools, like ChatGPT, are powered large language models, algorithms trained on vast quantities of data, but are not AGI.
Executives at some of the world’s leading artificial intelligence companies see ‘artificial general intelligence,’ or AGI, a hypothesized form of AI with intelligence on a par or better than humans. This prospect is both exciting and worrying.
AI and AGI have created concern among governments, corporations and public consultation groups worldwide, owing to the risks around the lack of transparency of AI systems; social manipulation through computer algorithms; job losses due to increased automation; surveillance; and data privacy and worse… the lack of human control!
Many industry leaders in technology have warned that AI could lead to an ‘extinction-level’ event where machines become so powerful they get out of control and wipe out humanity.
Several prominent technology leaders, including Elon Musk and Steve Wozniak for example, have called for a pause in AI development, stating that a moratorium would be beneficial in allowing society to catch up.
AI chatbots like ChatGPT have passed the Turing test, a test called the ‘imitation game,’ which was developed by British computer scientist Alan Turing to determine whether someone is communicating with a machine and a human. The one big area where AI is lacking is common sense.
It has been reported on many occasions, that the tech world is taking steps to ensure that the AI race doesn’t lead to a ‘Hiroshima moment.‘
Will AGI be created in the image of humans?
Let’s hope not.
The index reached 38109.20 points in intraday trading. Recently the S&P500 and the Nasdaq set new highs.
The Dow Jones is a market index that tracks the performance of 30 large US companies. It is also known as the Dow Jones Industrial Average (DJIA) or simply ‘the Dow’.
The DJIA is one of the oldest and most widely followed stock market indicators in the world. It reflects the health and sentiment of the U.S. economy and business sector.
The index was created in 1896 by Charles Dow and Edward Jones, who were journalists at The Wall Street Journal. The first calculation was done on 30th June 1896, with a base value of 40.
Some 128 years later, the index has a value of 38001 – a record high!
This was the first time the index closed above its previous high set January 3rd 2022. The rally was driven by strong earnings from the magnificent 7 tech giants such as Nvidia and Microsoft.
The expectation of a Fed interest rate cut later this year also helped the S&P500 break new ground.
Some analysts think that the long-term prospects for the Japanese markets look good.
The Nikkei 225 index is a benchmark of the Japanese stock market. It is composed of 225 large companies listed on the Tokyo Stock Exchange. The index has been fluctuating between 20000 and 30000 points for most of the past decade. It recovered from the lows of the global financial crisis in 2008 and 2009.
According to some market strategists, the Nikkei 225 index could reach 40000 points in the next 12 months. Fundamentals are ‘pointing in the right direction’ and investor interest in Japan is increasing.
This would breach the Nikkei’s all-time high of 38915 reached in December 1989. However, others suggest the rally will struggle somewhere between 36000 and the all-time high. This suggest that much of the good news is already priced in.
I think I could probably have guessed that too. The Nikkei hasn’t reached the original high of 1989 for 35 years!
It’s due a new record, isn’t it?
The measures are a response to new rules in the UK. The rules require crypto companies to clearly inform users of the risks involved in trading cryptocurrencies. If a customer fails to successfully complete the requests, they will be prevented from trading with their crypto account.
Crypto.com, Coinbase, Gemini and other cryptocurrency exchanges are warning UK users that they’ll need to complete investment questionnaires. Thes are aimed at testing their financial knowledge before being allowed to trade.
The companies have told UK users they are required to complete a declaration about what type of investor they are. Traders are required to respond to a set of questions on financial services to permit use of their platforms.
In the client’s declaration section, users are asked to select their investor profile. A trader is directed to inform the company of their financial status.
Questions such as: are you a high-net-worth customer earning above £100,000 per annum or with a net worth of more than £250,000? Or, are you a ‘restricted investor’ who won’t invest more than 10% of their assets. If clients do not complete the requests, they are prevented from trading crypto related products.
The financial questionnaires, require users to respond to numerous questions about the range of products available. They want the client to fully understand the potential volatility of crypto assets.
Since the UK passed the Financial Services and Markets Act, companies that offer crypto assets and certain types of digital currency, known as stablecoins, are now covered by UK law.
These are the same rules as those that govern traditional financial services and are aimed at protecting the retail trader.
The Bitcoin ETF approval is a massive achievement for the crypto industry as a whole, which first attempted to launch a Bitcoin ETF some 10 years ago.
Grayscale’s big legal win against the SEC in August 2023 over the regulator’s refusal to let it convert its popular Bitcoin Trust (GBTC) into an ETF breathed fresh optimism into the idea.
Following the SEC’s decision, Bitcoin’s value fell then gained some traction, as expected by traders. However, the volume of inflows into the new funds remains to be seen, Bitcoin ETFs are still widely expected to increase demand for the cryptocurrency and drive Bitcoin higher.
It would be unwise to make too much of these Bitcoin price moves in the short-term, but the approval is likely going to lead to some longer-term price increases. Now that the bitcoin ETF speculation has come to fruition it looks like traders may rotate to alternative cryptocurrencies such as Ether to prepare for future market developments.
The SEC is due to give decisions on spot ETH ETF applications beginning in May 2024. BlackRock, Invesco and Ark Invest are among the firms in line for approval, as well as Grayscale.
The opportunity to be in at the beginning will not want to be missed by these companies.
