POSSIBLE ROCKY STAGE
Bitcoin prices have been fluctuating between $94,000 and $95,000 as a result of concerns surrounding Google’s new quantum-computing chip Willow, which initially sparked a slide in value but was swiftly dismissed by analysts. This has left directional traders in a state of uncertainty, awaiting market stability before taking definitive actions. The situation has also led to a decrease in overleveraged altcoin trading, with funding rates indicating more balanced conditions. Furthermore, as banks show bullish sentiment towards the dollar, potential impacts on assets denominated in the U.S. currency, such as Bitcoin, have been highlighted. In addition, there are speculations that President-elect Trump may face challenges in fulfilling his promises related to cryptocurrency, adding further layers of complexity to the current market environment.
SLIDING DOWN
As a result of the current volatility in Bitcoin’s value, BlackRock’s bitcoin exchange-traded fund (ETF), IBIT, has faced a significant drop this morning as the cryptocurrency market cooled down and unfounded fears about bitcoin’s security being compromised by quantum computing circulated on social media. The price of IBIT plummeted by 5.3% to $54.73, marking the largest single-day decline since early August. Furthermore, technical charts indicate a bearish trend for IBIT, with potential support levels at $51.54 and a need for a turnaround above $59.16 to alter this downward trajectory.
STRONG MARKET LEAD
Taiwan Semiconductor Manufacturing Co. (TSMC) has revealed a significant 34% increase in sales in November, reaching NT$276.1 billion ($8.5 billion). This surge in revenue is attributed to the continued high demand for artificial intelligence (AI) technology despite concerns over a potential slowdown in data center construction. As a key supplier for prominent tech companies such as Apple and Nvidia, TSMC has experienced a significant uptick in sales, with a combined growth of 31.4% in October and November. These results are seen as a positive indicator for the overall expansion and development of AI data centers, with TSMC expected to maintain its market lead over competitors like Samsung and Intel, and analysts are optimistic about a projected 36.3% sales increase for the current quarter. Moreover, despite challenges such as supply disruptions to Chinese AI-chip designers, TSMC to remain resilient, not only displaying strong sales, but also seeing its shares soaring by 80% this year, which in turn, reflects investor confidence in the company’s performance.
REPOSITIONING
Major global asset manager Pimco is adapting its investment approach in response to concerns surrounding the growing U.S. debt burden and potential inflation risks. The firm, responsible for overseeing a significant asset portfolio, is reducing its allocation to longer-term Treasury bonds as a precautionary measure against potential increases in longer-duration yields. Factors such as inflation, economic growth, and government policies could all contribute to rising yields, prompting Pimco to focus on shorter-term bonds that are perceived as more favorable. By diversifying their interest-rate exposure and favoring higher-quality bonds, Pimco aims to effectively navigate the uncertain economic environment. The company also advises caution regarding U.S. debt levels and recommends investing in European debt while expressing confidence in the growth potential of U.S. equities. This strategic pivot comes as bond yields for 1-month Treasury bills remain stable, while the 10-year Treasury yields exhibit a slight increase, reflecting the evolving dynamics in the financial markets.
MISSED ESTIMATES
Oracle shares have been declining since yesterday as the database software company reported fiscal second-quarter results that fell short of analysts’ estimates and issued a weaker-than-expected forecast. Earnings per share were lower than expected at $1.47 compared to the anticipated $1.48, and revenue also missed expectations at $14.06 billion versus $14.1 billion forecasted. Moreover, the company reported a 9% year-over-year sales growth. Nevertheless, despite this, net income rose by 26% to $3.15 billion. Furthermore, the cloud infrastructure business saw significant growth, with a 52% increase in revenue to $2.4 billion, and oracle also secured a deal with Meta to assist with AI projects using their infrastructure. In addition, for the upcoming quarter, Oracle predicts a revenue growth of 7% to 9%, and for 2026, Oracle has raised its revenue guidance to $66 billion, $1.5 billion above analyst forecasts.
