HISTORIC PURCHASE

The prominent enterprise software company, MicroStrategy Inc., recently made a significant investment in Bitcoin by purchasing approximately 51,780 bitcoins at a value of $4.6 billion. This acquisition stands as the largest purchase of the digital currency by the company since it began accumulating it over four years ago. The buying spree took place between November 11 and November 17 and was disclosed in a filing with the U.S. Securities and Exchange Commission, and with this new addition, the company now boasts an impressive Bitcoin reserve exceeding $29 billion. This strategic move is led by Michael Saylor, the Co-founder and Chairman of MicroStrategy, who views Bitcoin as a crucial hedge against inflation, and it is worth noting that although cash reserves were initially used for these transactions, the company has now transitioned to using proceeds from stock sales and convertible debt offerings to bolster its cryptocurrency holdings. Moreover, Saylor has stated that he remains steadfast in his commitment to this strategy, as he aims to catapult the company’s Bitcoin assets to a whopping $42 billion in the next three years.

UNCERTAIN FUTURE TRAJECTORY

In the aftermath of the U.S. election, Bitcoin faced a tumultuous weekend as its value plummeted by almost 3%. The cryptocurrency has bounced back close to the $90,000 mark as of 8:00 AM CST, however,  it is worth highlighting that this volatility reflects the uncertainty surrounding President-elect Donald Trump’s proposed policies, particularly those related to crypto. Let’s remember that Trump has made favorable remarks about digital assets, nonetheless, doubts linger over the feasibility and timing of implementing such measures, including the creation of a U.S. Bitcoin stockpile. Moreover, market experts have pointed out that the rapid price surge that Bitcoin experienced since the election has left it “overheated,” with an excess of positive news already priced in. Ultimately, although Bitcoin’s performance has been notably significant, for now its future trajectory remains uncertain.

PAVING THE WAY

It has been announced that President-elect Donald Trump’s transition team is focusing on establishing federal guidelines for self-driving vehicles within the Transportation Department, potentially benefiting Tesla CEO Elon Musk. The current regulatory framework poses challenges for companies aiming to mass-produce self-driving cars. Nonetheless, the Trump team stated that they aim to appoint policy leaders to formulate rules around autonomous vehicles. As a result of this, Tesla’s stock surged 8% in premarket – continuing a 28% increase since the election, while competitors like Uber and Lyft saw a 2% decline in shares. Let’s remark that this push for federal guidelines could open the door for the broader implementation of self-driving technology in the transportation industry, however, it is worth noting that this may require legislative support for widespread adoption. 

ANTICIPATED EXPANSION

In the upcoming earnings report for this week, Nvidia (NVDA) is poised to give investors a detailed look into the strength of the AI market. Let’s recall that the company’s stock performance has been exceptional in 2024, largely driven by the soaring demand for AI technologies in various industries, and analysts are now predicting third quarter earnings per share of $0.74 and revenue reaching $33.2 billion – a substantial 83% increase year-over-year, investors are eagerly awaiting these financial results. In addition, Nvidia’s Data Center segment is anticipated to contribute $29 billion to the quarter’s revenue, marking a significant 100% surge from the previous year. Furthermore, Gaming revenue is expected to grow to $3 billion, reflecting a 7% increase from the previous year. Nevertheless, it is still important to remark that potential challenges lie ahead, as delays in the production of the company’s next-generation Blackwell AI chips have emerged, alongside looming tariff threats from President-elect Donald Trump. 

KEY EVENTS HAPPENING THIS WEEK

Monday: Home builder confidence index report for November, and speech from Chicago Fed President Austan Goolsbee.

Tuesday: Housing starts and building permits reports for October, and speech from Chicago Fed President Austan Goolsbee.

Wednesday: Speeches from Fed Gov. Lisa Cooks and Fed Gov. Michelle Bowman, and earnings report from Nvidia (after market closes).

Thursday: Leading economic index and existing home sales reports for October, initial jobless claims for week ending on November 16, Philadelphia Fed manufacturing survey, and speeches from Cleveland Fed President Beth Hammack and Kansas City Fed President Jeff Schmid.

Friday: S&P flash U.S. services and manufacturing PMI, and final consumer sentiment reports for November, and speech from Fed Gov. Michelle Bowman.