Luke Kawa12/6/24

US stocks close out week at record high

The S&P 500 rose 0.2% and the Nasdaq 100 gained 0.9%, both ending the week at record highs, while the Russell 2000 was up 0.5%.

US stocks caught a bid after the release of a middling nonfarm payrolls report for November, which seemingly cemented hopes for a rate cut at the Federal Reserve’s December meeting. Two-year Treasury yields fell about 5 basis points on the day.

Nonetheless, more S&P 500 constituents fell than rose on Friday, as was the case for every session this week.

Consumer discretionary was far and away the top S&P 500 sector ETF, gaining more than 2% with Tesla’s advance continuing to boost Elon Musk’s fortune.

Lululemon was the best-performing S&P 500 constituent, rising 15.9% after reporting better-than-expected earnings and boosting its full-year guidance. It was a similar story for another consumer-facing firm, Ulta Beauty, where surprisingly strong sales and profit figures fueled a 9% rally.

Utilities and energy each fell by more than 1%.

UnitedHealth was the worst performer in the S&P 500, down 5.1% to end a tragic week for the company.

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Markets droop as AI credit fears grow and jobs report looms

The S&P 500, Nasdaq 100, and Russell 2000 all slumped on Monday.

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Bitcoin-sensitive stocks hammered as crypto declines

Bitcoin-sensitive stocks tumbled Monday, enduring a much steeper drop than the keystone crypto asset itself, which was down nearly 4%, falling below $87,000, as of 12:20 p.m. ET.

Goldman Sachs’ themed basket of bitcoin-sensitive equities was down more than 8%. (It consists of companies tied to bitcoin, either through mining, digital payments, crypto investment, or blockchain technology.) It was one of the worst performers among Goldman’s thematically curated baskets of shares on Monday.

Among the basket’s constituents, miners Cipher Mining, CleanSpark, Hut 8, TeraWulf, and IREN were getting the worst of it.

At midday, the basket was on its way to its worst day since November 24, when bitcoin was also languishing below $90,000 and the broader tech sector was going through a brief downturn related to rising worries about durability of the AI boom.

Among the basket’s constituents, miners Cipher Mining, CleanSpark, Hut 8, TeraWulf, and IREN were getting the worst of it.

At midday, the basket was on its way to its worst day since November 24, when bitcoin was also languishing below $90,000 and the broader tech sector was going through a brief downturn related to rising worries about durability of the AI boom.

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Nvidia’s favorite stocks are getting shellacked as AI credit risk spreads

Nvidia’s “House of GPUs” is looking a little wobbly.

Shares of Applied Digital, CoreWeave, and Nebius — three of the four biggest equity positions held by the chip designer as of September 30 — are getting crushed on Monday.

Nvidia owned about $3.6 billion worth of these data center and neocloud stocks (with the overwhelming majority in CoreWeave) per its most recent 13F filing.

The AI credit risk that’s been most talked about in reference to Oracle’s widening credit default swaps spreads is also present in some of these firms, as well.

An Applied Digital bond due in 2030 is trading below $96 for the first time this month. That issuance was made to support data centers where CoreWeave will be the main tenant.

CoreWeave, which earlier this year received warrants enabling it to purchase a large chunk of Applied Digital shares as part of a data center leasing deal, sank last week after announcing a $2 billion convertible note offering that was later upsized.

Of course, it’s not just Nvidia-owned stocks, but the entire data center ecosystem that’s under pressure on Monday. Cipher Mining and IREN are also getting walloped — with Monday’s crypto tumble also likely weighing on these two bitcoin miners turned data center companies.

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