Happy Monday, all, and welcome back to this week’s market newsletter. Please see this week's BTC Mining Market Data update below. 

Market Overview

• Equities offer mixed returns: The S&P 500 and NASDAQ inched higher last week, with the NASDAQ taking the lead following strong Q3 earnings from the tech sector, while the DOW fell slightly. The S&P 500 closed at 6,090.27 (+1%), the NASDAQ closed at 19,859.77 (+3.3%), and the Dow closed at 44,642.52 (-0.6%), but all three indices hit record highs last week. Small caps did not share in the same fortunes as the S&P 500 and the NASDAQ, with the Russell 2000 falling 1.1% to 2,408.99.
• Oil and natural gas fall in tandem:
  • Brent crude futures fell 1.57% last week to $71.06/barrel. In light of weakened demand, particularly from China, OPEC+ members have opted to delay increases to production until April 2025, an increase originally scheduled for January. 
  • Henry Hub fell 8.3% last week to $3.08/MMBtu, a sharp decline following its even sharper runup in recent weeks. The EIA attributes the declining price to steady supply and mild weather conditions in key markets. 
• Labor market grew in November, boosted by strong consumer sentiment: The University of Michigan’s Consumer Sentiment rose to 74 for its preliminary December reading, marking five straight months of growth. In related news, the labor market added 227,000 jobs in November, although unemployment rose slightly from 4.1% to 4.2% and wage growth remained unchanged from October at 4.2%
• Q3 earnings were strong for S&P 500 companies: Per FactSet, S&P 500 companies grew their earnings by 5.9% year-over-year in Q3, and the research firm forecasts 11.9% year-over-year earnings growth for Q4-2024, which would be the highest since Q4-2021. 
• Federal Reserve now forecasts 3.3% GDP growth for Q4: In light of strong Q3 earnings and rising consumer sentiment, the Federal Reserve's GDPNow model now estimates 3.3% annualized growth in GDP for Q4 2024, the highest print of the model so far this quarter. So far this year, annualized GDP growth rate has averaged 2.5%, according to Edward Jones.

Mortgage rates begin to dip: Mortgage rates are starting to fall after being stubbornly sticky following the Fed's first round of rate cuts in September. According to Freddie Mac’s most recent mortgage survey, 30-year rates fell for the second week in a row to an average of 6.69%, and 15-year rates decreased to 5.96%, the first meaningful decrease since the week of September 12. Even so, rates are still highly elevated compared to prior years in recent memory.

What to look out for this week:

• U.S. Census Bureau report on wholesale inventories (Monday)
• U.S. Bureau of Labor Statistics report on productivity and labor costs (Tuesday)
• National Federation of Independent Business update of Small Business Optimism Index (Tuesday)
• U.S. Bureau of Labor Statistics Consumer Price Index (Wednesday)
• U.S. Treasury Department federal budget report  (Wednesday)
• U.S. Bureau of Labor Statistics Producer Price Index (Thursday)
• U.S. Bureau of Labor Statistics report on export and import prices (Friday)

Notable corporate earnings this week:

• Oracle (Monday)
• Toll Brothers (Monday)
• AutoZone (Tuesday)
• Gamestop (Tuesday)
• Ferguson (Tuesday) 
• Nordson (Wednesday)
•  Broadcom (Thursday)
• Adobe (Friday)
• Costco (Friday)

Bitcoin Market Update

• Bitcoin finally breached $100,000 last week, topping out at a new all-time high just above $103,500. The spurt above $100,000 was short-lived, though, and bitcoin fell back below the threshold to close the week. Its price is $95,900 at the time of publication.
• In an interview last week with Andrew Sorkin at The DealBook Summit, Federal Reserve Chair Jerome Powell likened bitcoin to gold, claiming that the shiny precious metal – not the dollar – is bitcoin’s true rival. “It’s like gold; it’s just virtual and digital,” he said during the interview, adding that “it’s not a competitor for the dollar. It’s really a competitor for gold.” Many speculated that Powell’s comment sparked bitcoin’s rally to an all-time high above $100,000.

Interesting Reads and Videos

• Crypto is getting the SEC boss it wanted in Paul Atkins
• Coinbase Court Documents Reveal “Proof” of Chokepoint 2.0
• Dallas College Launches Bitcoin Mining Program Featuring Take-Home Mining Machines

 Bitcoin Mining Market News and Trends

• Hut 8 announced a $500 million at-the-market offering last week, with a goal to purchase bitcoin to add to its treasury and expand its hashrate. This makes Hut 8 the second public bitcoin miner, after Marathon, to pull financial levers with the goal of building its bitcoin reserves, a move inspired by Microstrategy’s bond-sales-to-bitcoin strategy.
• Hashprice is having a tough time keeping up with bitcoin’s price, and so are bitcoin mining equities as a result. The team at bitcoin mining software and service provider Luxor illustrated this well in their November lookback, which showed that hashprice and mining stock prices are lagging bitcoin’s impressive gains so far in 2024. Both the 2024 Halving’s reduction to mining rewards and the rapid clip of hashrate deployments are weighing down hashprice. 

Thank you for reading, and please feel free to reach out with any questions.

Christian Lopez