As we discussed in the Morning Lineup today, equities’ sleepy start to the week serves as a sharp contrast to surging Bitcoin prices.  As of this writing, Bitcoin is up 6% on the day bringing it right above $67,000 for the first time since the record high from 11/8/21.

As Bitcoin nears a new record, we would note that the current streak of 847 calendar days without a record close is the second longest streak next to the recovery from the late 2017 peak.

As shown in the first chart below, the rapid rise in Bitcoin prices this year has resulted in prices flying above the 50-DMA.  Currently, Bitcoin trades 2.6 standard deviations above its 50-DMA.  That is extremely overbought, albeit the spread eclipsed 3 standard deviations as recently as February 28th.  As shown, these have been some of the most overbought readings in the crypto space of the past five years, but historically that isn’t necessarily a bad thing.  Whereas the standard theory is that an asset trading well above its moving average would suggest that it is due for some downside mean reversion, the opposite has historically played out for Bitcoin.  As shown in the table below, the best average forward returns for Bitcoin have typically occurred when it has been the most overbought rather than oversold.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market-related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

While you’re here, join Bespoke Premium with a 30-day trial!

On This Day in History:

A Warren Buffett Protégée Is on the Hunt for Small Companies. She Now Has Millions More to Spend. (WSJ)
Tracy Britt Cool, a former Warren Buffett protégé, co-founded Kanbrick, aiming to invest in midsize businesses with a competitive edge. Focusing on consumer businesses, the company rules out financial services, healthcare, real estate, and other industries in what boils down to a couple of companies a year. It’s a highly selective process trying to find businesses with a “moat,” as Buffett likes to say. While inspired by Berkshire Hathaway’s principles, Kanbrick aims to forge its own path. [Link]

Are We in a Stock Market Bubble? (Ray Dalio)
On LinkedIn, Ray Dalio, founder of Bridgewater, suggests that while some segments like the “Magnificent 7” appear frothy due to high valuations and expectations around generative AI, the broader US stock market does not exhibit classic bubble characteristics. Dalio cited criteria such as price levels relative to traditional measures, sustainability of conditions, the influx of new and naïve buyers, overall market sentiment, the degree of leveraged purchases, and the extent of speculative forward purchases. According to Dalio, while certain areas show elevated metrics, overall, the market does not match the extreme conditions seen in past bubbles. [Link]

Wendy’s Bold Move: Dynamic Pricing Strategy Set to Transform Fast-Food Industry (BNN)
Wendy’s, the fast-food chain, is looking to revolutionize its pricing strategy by introducing dynamic pricing across its outlets. Inspired by practices in the airline and rideshare industries, Wendy’s said it would adjust prices in real-time based on the time of day. The goal was to attract more customers during quieter periods while managing demand during peak times. However, this innovative approach also poses a challenge: 52% of consumers perceive such fluctuations as price gouging. [Link]

Consumers Pushing Back Against Price Increases — And Winning (Voice of America)
Consumer behavior in response to inflation has shifted significantly. Frustrated by persistently high prices, Americans are opting for store-brand items, exploring discount stores, and buying fewer luxury goods. The food sector has seen the most pushback against price increases, prompting large food companies to slow their hikes. Despite overall inflation declining from its 2022 peak, it remains a central concern, with President Joe Biden criticizing excessive corporate price hikes and highlighting “shrinkflation,” where companies reduce product sizes instead of raising prices. [Link]

AI & Technology

There are growing calls for Google CEO Sundar Pichai to step down (Business Insider)
After recent issues with Gemini, analysts and industry insiders are questioning if CEO Sundar Pichai, who has led Google and Alphabet since 2015 and 2019 respectively, is the right person to navigate Google through this critical period of intense competition in AI. Despite Pichai’s success in growing Google’s market cap significantly, there’s concern that the company’s internal bureaucracy, idealogy, and caution are hindering its ability to innovate. [Link]

Apple Cancels Work on Electric Car, Shifts Team to Generative AI (Bloomberg)
Apple has canceled its ambitious decade-long project to build an electric car, according to insiders. The decision surprised the nearly 2,000 employees working on the project. COO Jeff Williams and Kevin Lynch, in charge of the effort, shared the news internally. The car team, known as the Special Projects Group (SPG), will shift to the artificial intelligence division, focusing on generative AI projects. Layoffs are expected, but the exact number remains unclear. [Link]

Klarna says its AI assistant does the work of 700 people after it laid off 700 people (Fast Company)
The AI chatbot now handles two-thirds of all customer service interactions at Klarna, a buy-now, pay-later company. That amounts to 2.3 million conversations, and it has achieved customer satisfaction levels comparable to human agents. Despite layoffs in 2022, Klarna insists the AI’s productivity equivalent to 700 full-time agents is aimed at showcasing the long-term benefits of AI technology rather than replacing human jobs. [Link]

Google Left in ‘Terrible Bind’ by Pulling AI Feature After Right-Wing Backlash (BNN Bloomberg)
Google’s AI chatbot, Gemini, faced controversy for not producing accurate image generations, even in historical contexts where the chatbot seemed to refrain from showing white people in multiple examples where they should be. Google paused Gemini’s image generation feature and is addressing the issue, emphasizing that no AI is perfect. Critics argue that Google’s approach to AI image generation, which aims to counteract bias, lacks clarity and may not fully address underlying data biases. [Link]

Throwback for Philadelphia tech: What were you doing in 2009? (Technical.ly)
In 2009, Chris Wink, Sean Blanda, and Brian James Kirk founded Technical.ly Philly to cover Philadelphia’s rising tech scene. Over 15 years, Technical.ly expanded to Baltimore, DC, Delaware, and Pittsburgh, documenting local tech communities and companies. Reflecting on the changes, industry figures highlight a stronger, more vibrant tech ecosystem in Philadelphia, marked by increased startup activity, collaborative projects, and advancements in digital equity. Looking ahead, there’s optimism for Philadelphia to emerge as a leader in AI ethics. [Link]

Environment

South Fork Wind just became the US’s first complete utility-scale offshore wind farm (Electrek)
New York’s South Fork Wind, developed by Ørsted and Eversource, has completed installation of its final turbine, becoming the first utility-scale offshore wind farm in US federal waters. The 132-MW project will power 70,000 homes in Long Island and reduce carbon emissions significantly, contributing to cleaner energy and environmental benefits. [Link]

Startup is shipping 100,000-year-old Arctic ice from Greenland to chill cocktails in Dubai (New York Post)
Arctic Ice, a Greenland startup, is facing criticism for shipping ancient glacier ice to Dubai for use in high-end cocktails. The company claims it only uses ice from already detached icebergs, aiming to prevent their meltwater from raising sea levels. However, critics argue the operation exploits natural resources and contributes to carbon emissions. [Link]

Geothermal startup Fervo Energy is tapping fresh $221M round, filing reveals (TechCrunch)
Fervo Energy, a geothermal startup from Houston, has raised $221 million to enhance its geothermal power generation methods. Utilizing advanced drilling techniques and technology, the company aims to harness Earth’s deep thermal energy more efficiently. The startup has already achieved a faster and cheaper drilling process, a Department of Energy grant, and the successful launch of a geothermal power plant in Nevada supplying power to Google’s data centers. This new round of funding is expected to further Fervo’s efforts in expanding geothermal energy’s role in providing sustainable power. [Link]

Sports

‘I just saw the best player on the field’: Wyatt Langford is turning heads with every thunderous swing of his bat (ESPN)
At the Texas Rangers spring training, an unexpected star emerged according to pitching coach Mike Maddux: Wyatt Langford, a power-hitting outfielder. Despite the team’s focus on bolstering their pitching, Langford’s prowess at bat has caught the eye of coaches, hinting at an even stronger offensive lineup for the Rangers. Drafted fourth in 2023, Langford quickly ascended through the minor leagues with standout performances, positioning himself as a viable contender for the major league. His rapid progress and remarkable stats suggest Langford could be a significant addition to the Rangers, offering a fresh offensive dynamic to the World Series champions. [Link]

‘Seventy is the new 50’: Why NBA offenses are as prolific as ever (ESPN)
The NBA is witnessing its highest scoring averages since the 1969-70 season, fueled by rule changes in the mid-2000s designed to enhance game pace and scoring. This offensive explosion, highlighted by several players scoring over 60 points in a single game, has led to discussions within the league about the current balance between offense and defense. The league is contemplating if and how to adjust the rules to bring more defense, or less scoring, into the game. With players shooting better than ever from beyond the arch, maybe it’s time to move the three-point line back? [Link]

Health & Wellness

Ultraprocessed foods linked to heart disease, diabetes, mental disorders and early death, study finds (Yahoo Life)
In the age of weight loss drugs and trends towards healthier lifestyles, a comprehensive review of 45 meta-analyses involving nearly 10 million people has found that consuming ultra-processed foods significantly increases the risk of developing or dying from various health conditions. If we’re looking at the numbers, the study suggests a 50% higher risk of cardiovascular disease-related death and common mental disorders. Ultra-processed foods, high in calories, added sugar, sodium, and low in fiber, are linked to obesity, type 2 diabetes, depression, and potentially cancer. [Link]

Obesity now greater risk to global health than hunger (The Telegraph)
Obesity has surpassed hunger as the leading global health threat, with over one billion people worldwide now clinically obese. This marks the first time the number of obese individuals has exceeded those considered underweight. The increase in obesity, particularly among the younger population, raises concerns about the long-term health implications, including type 2 diabetes, cancer, and mental health issues. The study calls for action from both the health sector and broader society to address this growing issue, including changes in food industry practices and government strategies to promote healthier lifestyles. [Link]

Read Bespoke’s most actionable market research by joining Bespoke Premium today!  Get started here.

Have a great weekend!

Please click the image below to view our March 2024 market calendar.  This calendar includes the S&P 500’s historical average percentage change and average intraday chart pattern for each trading day during the upcoming month.  It also includes market holidays and options expiration dates plus the dates of key economic indicator releases.  Click here to view Bespoke’s premium membership options.

The average S&P 500 stock rose 3.87% in February even though the index itself was up more than 5%.  You can check out the performance of various ETFs across asset classes in February in this post, but below we take a look at the best and worst-performing individual S&P 500 names during the month.

While NVIDIA (NVDA) got a lot of attention (as always) after its most recent blowout earnings report, two stocks outdid the “King of AI” in February: Constellation Energy (CEG) and Ralph Lauren (RL).

Additional big winners in February included 20%+ gainers like Quanta Services (PWR), GE HealthCare (GEHC), Axon Enterprise (AXON) — the maker of Tasers and video software for police departments, Tapestry (TPR), and Uber (UBER).  Other notables include Diamondback Energy (FANG), NXP Semi (NXPI), General Electric (GE), Vulcan Materials (VMC), and Eli Lilly (LLY).  And finally, even Disney (DIS) managed to make the list of the 30 biggest winners in February with a gain of 16.17%.

Not everything went up during the month, however.  In fact, of the S&P’s 500 stocks, 350 were up and 150 were down in February.  That’s pretty weak breadth for a 5%+ up month.

Below is a list of the 30 S&P 500 stocks that fell the most in February.  Notably, three of the five biggest losers were from the Communication Services sector: Paramount (PARA), Charter (CHTR), and Warner Bros. (WBD).  Other big blue chips that fell in February include Amgen (AMGN), Adobe (ADBE), Palo Alto Networks (PANW), Comcast (CMCSA), and Deere (DE).