Equity markets maintained their upward trajectory, building on the previous week’s momentum that began in late October 2023, fueled by easing economic worries.
The Federal Reserve’s key inflation gauge, the Personal Consumption Expenditure price index, dropped as anticipated in January, alleviating concerns of a rapid uptick in prices.
The tech-heavy Nasdaq 100, represented by the Invesco QQQ Trust (QQQ), surged past 18,300 points to hit an all-time high. Meanwhile, the S&P 500, tracked by the SPDR S&P 500 ETF Trust (SPY), also reached record levels, surpassing 5,100 points.
In the latest earnings season, the majority of S&P 500 companies outperformed expectations, with 73% beating earnings-per-share estimates and 64% exceeding revenue forecasts.
Bitcoin (BTC/USD) once again stole the spotlight by crossing the $60,000 mark, enjoying its most robust performance since March 2023.
NYCB Stock Plummets
New York Community Bancorp (NYCB) faced fresh turmoil as it revealed a “material weakness” in its internal controls related to loan reviews, coupled with the departure of its CEO. Consequently, the company’s shares plummeted over 20% by the end of the week.
Musk Sues OpenAI
Elon Musk filed a lawsuit against Sam Altman and OpenAI, alleging a shift in focus towards profit-making for Microsoft Corp. (MSFT), deviating from their original mission. The legal action claimed that the collaboration with Microsoft diverted OpenAI from its initial commitment to open-source development in Artificial General Intelligence.
Bitcoin ETFs Surge
Bitcoin ETFs recorded significant inflows of $676.8 million within a single day, with prominent funds like iShares Bitcoin Trust (IBIT) leading the trend. The potential involvement of Morgan Stanley adds to Bitcoin’s increasing acceptance and investor confidence in the cryptocurrency market.
February’s Standout ETFs
February witnessed a notable $40 billion investment across 10 ETFs, spanning equities, Treasury bonds, and Bitcoin.
Bubble Debate Insights
Renowned investor Ray Dalio dismissed notions of a stock market bubble, pointing to the U.S. market’s moderate position based on key metrics. While acknowledging high valuations in select areas, Dalio refrained from labeling it a bubble, cautioning about potential downturns if advancements in artificial intelligence fall short of expectations.
Apple Conviction Dropped
Goldman Sachs removed Apple Inc. (AAPL) from its ‘conviction list’ but retained a ‘Buy’ rating for the stock. Following the releases of iPhone 15 and Vision Pro, coupled with reports of Apple scaling back its electric vehicle project, the firm sees more promising opportunities elsewhere, reflected in a slight decline in Apple’s stock price.
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