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MARCH 4, 2024

NEAR ALL-TIME HIGH

Bitcoin has increased past the $65,000 mark, edging closer to its all-time high of $69,000 from November 2021. This bullish momentum is driven by new market entrants and increasing confidence in the digital asset, and it resulted in a 6% gain over the past 24 hours, while the CoinDesk 20 Index (CD20), which tracks the world’s largest and most-liquid cryptocurrencies index, saw a 5.6% increase. This places Bitcoin within 5% of its record value in U.S. dollars, as it continues to exceed previous highs against major and emerging-market currencies. Additionally, market capitalization has also reached a record $2.8 trillion, and over $60 million in short positions against Bitcoin were liquidated in the past day, potentially fueling the price surge. Moreover, Bitcoin has also reached a new high in euro terms, and as the halving event nears, the overall sentiment is positive, with optimistic expectations for the largest cryptocurrency to continue its upward momentum.

SUPER MICRO JOINS THE BIG LEAGUE

Super Micro Computer Inc. saw a 12% increase in its stocks following the news of the company being added to the S&P 500 index. This suggests that the market is increasingly valuing companies involved in artificial intelligence. The company, based in San Jose, has experienced a huge 1,000% rise in its stock value since the end of 2022, reaching a value of $50.6 billion. Additionally, Deckers Outdoor Corp is set to join the S&P 500 on March 18, which will replace Whirlpool Corp and Zion Bancorp, causing noticeable trading activities. Moreover, as Nvidia’s stock continues to rise, making it the third most valuable U.S. company, investors are starting to pay attention to other companies involved in artificial intelligence, and since Super Micro has reported strong quarterly results and a higher revenue forecast for the year, which exceeded Wall Street’s expectations, its position as a key player in the AI sector has strengthened.

REMOVED FROM TOP BUY LIST

Apple Inc. has been removed from the top buys list of Goldman Sachs Group Inc. due to underperformance, with concerns over weak demand for its key products, particularly the iPhone. Although the company had initially made it onto the “Directors’ Cut” version of Goldman’s conviction list last year in June, its share price stagnated, in contrast to the almost 22% jump in the S&P 500 Index. The primary cause for Apple’s underperformance has been concerns over a prolonged sales slump for the iPhone, further compounded by ongoing economic struggles in China. Consequently, following its removal from the list, Apple’s shares dropped by 0.6%. Nevertheless, despite this setback, some analysts still maintain a buy rating for Apple, expressing confidence in the resilience of the Apple ecosystem and its associated revenue sustainability, despite the market’s focus on slower product revenue growth.

UNPREDICTABLE BOND YIELDS

This year, the unexpected increase in bond yields has caught traders off guard. The strong performance of the U.S. economy has led to a reduction in bets on Federal Reserve interest rate cuts, causing losses for those who favored bonds at the beginning of the year. Some investors view the rising yields as a potential buying opportunity, anticipating that they could reach 4.5% in the five- to 10-year sector. However, with upcoming release of key employment and inflation data, the market is treading with caution. Additionally, market participants are closely awaiting the testimony of Fed chair Jerome Powell to Congress, which could provide further insights. Moreover, the differing views on the trajectory of Treasury yields reflect the uncertainty in the market, with some being optimistic about the potential for bond investments, while others remain watchful. As the market anticipates future movements, it remains to be seen whether the rise in yields will continue or if there will be a shift in market sentiment based on upcoming data and policy decisions.

KEY EVENTS HAPPENING THIS WEEK

Monday: Speech from Philadelphia Fed President Tom Harker.

Tuesday: Factory orders and ISM services reports for January, speeche from Fed Vice Chair for Supervision Michael Barr.

Wednesday: U.S. wholesale inventories and job openings reports for January, ADP employment report for February, release of Federal Reserve Beige Book, and speeches from San Francisco Fed President Mary Daly, and Minneapolis Fed President Neel Kashkari.

Thursday: U.S. trade balance and consumer credit reports for January, initial jobless claims for week ending on March 2, U.S. productivity for the fourth quarter of 2023, testimony from Fed Chair Jerome Powell to Congress, and speech from Cleveland Fed President Loretta Mester.

Friday: U.S. nonfarm payrolls and unemployment rate reports for January, and speech from New York Fed President John Williams.

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