As equity markets continued their upward trajectory this week, investors rejoiced in the glow of a sustained rally that commenced in October 2023. The surge was propelled by fading economic worries and a reassuring decline in the Federal Reserve’s key inflation indicator, the Personal Consumption Expenditure price index for January.
In an unprecedented move, the Nasdaq 100, represented by the Invesco QQQ Trust (QQQ), crossed the 18,300 milestone, setting a new zenith. Accompanying this exhilarating performance was the S&P 500, monitored through the SPDR S&P 500 ETF Trust (SPY), which also scaled new heights by breaching the 5,100-point threshold.
Amidst the quarterly earnings spectacle, where the majority of S&P 500 companies showcased strong financial prowess, with 73% outperforming earnings-per-share estimates and 64% exceeding revenue forecasts, Bitcoin (BTC/USD) stole the limelight by surpassing $60,000, marking a remarkable week reminiscent of its heyday in March 2023.
New York Community Bancorp in Crisis
New York Community Bancorp (NYCB) found itself amidst turbulent waters once again, unveiling a disturbing “material weakness” in its internal controls linked to loan review procedures. This tumultuous development was compounded by the exit of the company’s CEO, resulting in a more than 20% plunge in the stock price on Friday.
Legal Wrangle: Musk Sues OpenAI
In a dramatic legal showdown, Elon Musk took legal action against Sam Altman and OpenAI, accusing them of forsaking their core mission in pursuit of profits for Microsoft Corp. (MSFT). Musk alleged that OpenAI’s collaboration with Microsoft steered the organization away from its founding principles of open-source advancement in the realm of Artificial General Intelligence.
Bitcoin ETFs Gain Traction
Bitcoin Exchange-Traded Funds (ETFs) witnessed an unprecedented influx of $676.8 million in a single day, propelled by flagship funds like iShares Bitcoin Trust (IBIT). The possibility of Morgan Stanley joining this burgeoning trend underscored the increasing acceptance and investor confidence within the cryptocurrency market.
Top Performers of February ETFs
February witnessed a massive $40 billion inflow into 10 ETFs, showcasing a significant allocation of capital across equities, Treasury bonds, and the ever-expanding Bitcoin domain.
Bubble Speculation and Market Outlook
Renowned investor Ray Dalio dispelled any notions of a stock market bubble, citing the U.S. market’s moderate standing across pivotal metrics. While acknowledging elevated valuations in the “Magnificent Seven” tech stocks, Dalio refrained from labeling it a bubble outright, cautioning of a probable downturn if advancements in artificial intelligence fail to meet lofty anticipations.
Apple’s Goldman Sachs Odyssey
Amidst whispers and murmurs in the tech sphere, Goldman Sachs opted to drop Apple Inc. (AAPL) from its exclusive ‘conviction list,’ though the firm maintained a ‘Buy’ rating on the stock. Following the unveiling of the iPhone 15 and the Vision Pro series, coupled with rumors of Apple abandoning its electric vehicle project, Goldman Sachs steered its focus elsewhere, leading to a minor dip in Apple’s stock value.
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