The week starts off with record highs in stocks, gold and Bitcoin. The Daily Breakdown digs into what’s moving markets.
Before we dive in, let’s make sure you’re set to receive The Daily Breakdown each morning. To keep getting our daily insights, all you need to do is log in to your eToro account.
Weekly Outlook
Can markets continue their quiet grind higher amid a lack of events? That’s what investors are wondering this morning as M&A deals and big AI news — this one between AMD and OpenAI (more below) — boost the S&P 500 and Nasdaq 100 in pre-market trading.
But other assets are moving too, as gold hits a new record high and inches closer to $4,000 an ounce, while Bitcoin hit its first record high in about six weeks over the weekend.
Economics?
Investors — and the Fed — are hoping that we’ll get the September jobs report this Friday, but if the government shutdown continues, then that’s unlikely to be the case. Same goes for Thursday’s initial jobless claims. Otherwise, it’s set to be a quiet week.
Earnings Are Back
Earnings season officially kicks off next Tuesday with banks like JPMorgan and Wells Fargo. But that doesn’t mean we won’t see any quarterly reports this week. Constellation Brands and Aehr Test Systems will report this evening, while PepsiCo, Delta, and Levi will report on Thursday.
Want to receive these insights straight to your inbox?
The Setup — Bitcoin
Bitcoin is working on its sixth straight daily rally and its eighth gain in the last nine days. The quick ~15% rally has been enough to thrust Bitcoin back to record highs — its first record high since August 14th. When we last looked at BTC, it was to discuss its best and worst months, as well as the key support level it was holding.
Bitcoin held the key $107K to $111K support zone and quickly moved back toward the $120K range, where it has struggled for momentum. It topped $122K in July and August, but couldn’t hold above this zone.
Now above this area, bulls would love to see $120K to $122K hold as support. If it can do that, perhaps BTC can make its way to the $130K to $135K range this quarter. Otherwise, a break back below $120K could mean BTC needs more time to consolidate.
Options and ETFs
For investors who can’t trade or aren’t comfortable trading cryptocurrencies outright, they can consider ETFs for BTC and ETH. On the BTC front, IBIT remains the largest ETF by assets, while also supporting options trading.
Bulls can utilize calls or call spreads to speculate on upside, while bears can use puts or puts spread to speculate on downside. In either case, investors may consider using adequate time until expiration.
For those looking to learn more about options, consider visiting the eToro Academy.
What Wall Street’s Watching
Shares of Advanced Micro Devices are soaring this morning, up more than 30% after inking a deal with OpenAI. The deal includes OpenAI receiving warrants for as many as 160 million AMD shares, which will vest as certain milestones are achieved. For its part, OpenAI will buy GPUs from AMD to help power its AI efforts. Dig into the fundamentals for AMD.
Comerica stock is jumping this morning, up more than 10% on reports that Fifth Third Bank will acquire CMA in a ~$10.9 billion all-stock deal. The deal would create the ninth-largest bank in the country, as the industry looks toward consolidation amid deregulation.
Tesla stock is inching higher this morning as the company teased a new product announcement slated for Tuesday. Investors are excited to see what the company may debut, while also hoping that it ignites a further rally in the stock. While shares fell on Thursday and Friday, Tesla stock is up more than 25% over the past month. Check out the chart for TSLA.
Disclaimer:
Please note that due to market volatility, some of the prices may have already been reached and scenarios played out.