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“If you don’t fail sometimes, you are not being ambitious enough.” – Sundar Pichai
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
After several days with little in the way of economic or earnings data, this morning we’ll get reports on jobless claims, and we’ve already seen a handful of earnings reports. Of the four companies reporting earnings this morning, two reported better than expected EPS, three missed sales forecasts, and two lowered guidance. Maybe we would have been better off with no data! In response to the reports, we’ve seen some large moves. Helen of Troy (HELE), which reported a reverse triple play, is down over 20% while Conagra (CAG) and Simply Good Foods (SMPL) are both down over 4%. The only one of the four stocks trading higher in reaction to its report is Delta (DAL). That stock is flying over 13% in pre-market trading.
While these individual names have seen large reactions, overall, equity futures are up or down 0.05% or less, and treasury yields have barely budged. Crude oil is down less than 1% while gold, silver, copper, and platinum are all firmly higher.
Asian stocks were mixed, with Japan and India both down nearly 0.5% while China was up by a like amount. A former BoJ official made comments that there will likely be no more rate hikes until early 2026, while the Bank of Korea kept rates unchanged. In Europe, equities are moving higher as mining companies fuel a 0.6% rally in the STOXX 600 and a more than 1% rally in the FTSE 100.
Yesterday, we highlighted some of the massive moves in various metals like gold this year. This morning, we’ll shift our focus to Bitcoin, aka digital gold, which has also been performing very well. While Bitcoin’s performance this year looks like more of a sideways move, it’s still up a respectable 18% YTD and hit a record high yesterday. This morning’s price, right around $111K, leaves Bitcoin right near the resistance it has been dealing with since late last year. A breakout above $112K would complete a cup and handle formation, setting the stage for a new leg higher.
Just as bitcoin prices have been looking to break out from resistance, Bitcoin treasury company MicroStrategy (MSTR) has also been dealing with resistance right around $425 since late last year. Without getting into the valuation of the stock or the premium it trades at relative to its underlying crypto holdings, a move above $425 could set the stage for a new leg higher and a test of its post-Election highs from last year.
If Bitcoin is the ‘gold standard’ of the crypto space, Ethereum would be the silver standard, and price action has been much more subdued. While prices have rallied in recent weeks as digital tokens have gained in popularity, Ethereum remains more than 20% below its post-election highs. Prices are up over 7% in the last two days but remain below short-term resistance at the $2,800 level.
Throughout its history, Ethereum has been no stranger to large drawdowns. As shown in the chart below, since 2018, it has only been within 10% of a high on 6% of all days, and on average, it has traded in a drawdown of 53%! That means that the current 42% drawdown from its last record high in late 2021 is more modest than average! No one ever said the crypto space was an area of stability!
