Is the Market Turning Around? Huge Monday Update
In a Nutshell
Markets rose Monday as Trump rejected Israel's Iran strike proposal, cutting oil prices and adding $770B in market value. Microsoft is offering buyouts to 27% of its workforce (60,000 employees) to fund AI, while Anthropic filed for a $1.5T IPO and Meta is raising $95B for AI spend. A heavy earnings week with FOMC, PCE, and GDP data ahead requires risk management, as the Nasdaq holds above 700 support.
These notes were generated by AI and may contain inaccuracies.
Happy Monday. This is Ricky from TechBud Solutions with a market update. The markets are in the green today and look very promising so far. The Nasdaq market is up 1.3%. Two specific reasons account for this performance. The first reason is that $770 billion was added back into the US market with Trump's rejection of Israel's proposal to attack Iran. This topic was discussed in yesterday's late video upload. Trump often postpones this attack until after the midterm elections. The markets loved it. Oil prices have started to fall. The Nasdaq and S&P 500 futures have started to rise.
Microsoft is offering to lay off 60,000 employees as it cuts costs and reshapes its workforce for the age of artificial intelligence. This means that approximately 27% of its total workforce are being offered a package deal to leave the company. When Apple released its new phone, their products were much more expensive this year, and they attributed this higher price to artificial intelligence. Because so much is being invested in artificial intelligence, products and services are likely to cost more, while traditional jobs may slow down. 27% of the workforce, or another 60,000 employees, could be laid off. More jobs may be created in other areas, or this could put people in a position where they can use artificial intelligence and create a business that didn't exist before, but the trade-off is never even. Their focus is on bottom line, making sure to try to keep their revenue and net profit at the highest possible level, and this comes at the expense of some employees.
Anthropic has published its S-1 public offering filing. Operating cash flow was $3.93 billion. They have about $130 billion in cash or its equivalent. The company is aiming for a $1.5 trillion valuation. Despite a net loss of $80.7 billion and half-year revenues of $16.29 billion, its value will reach $1.5 trillion. It is being offered to the public under the trading symbol "ANT" with Goldman Sachs and Morgan Stanley leading the offering process. They expect to raise about another $100 billion when they make this offering. The value was initially expected to be 2 trillion, and now it is 1.5 trillion, so an adjustment was made. If they do raise nearly an additional $100 billion from everyone Anthropic has partnered with, including the Big Seven companies, they will be able to meet any obligations they may have in the near future.
Meta plans to raise $95 billion through a series of equity offerings to fund the development of artificial intelligence. This funding plan comes just days after Meta announced it would spend $145 billion on capital expenditures this year. Meta is rather infamous for the Metaverse. When they switched from Facebook to Meta, they spent about 10 or 15 billion dollars in a very short period of time and it didn't lead to anything. Oculus glasses, at least so far, nothing has come out of them. It seems that it has now become a project that they are no longer pursuing. So Metaverse is just billions of dollars wasted and lost. Artificial intelligence is extremely valuable. It is likely that we have all tried it and used it as a tool. But there is also no doubt that not all of these companies that may be investing heavily and borrowing excessively, and some of the new cloud companies, will be profitable. Choose in a way that allows you to adapt to and withstand fluctuations. If you are taking an aggressive stance towards some new cloud companies or large companies that are starting to show signs of fear or financial anxiety, this is where you should be very careful.
This is just the beginning of a busy week ahead. Tomorrow there is SK Hynix, a huge memory chip company from the South Korean market. Robin Hood Company announces its profits. Then there is Microsoft and Alphabet on Wednesday, and then Intel, Amazon and SanDisk on Thursday. There is also the Federal Open Market Committee's interest rate decision on Wednesday. There is the personal consumption expenditures report on Thursday, and then the GDP report as well this week. So a very big week awaits.
Don't be afraid to seize opportunities that you deem appropriate to your standards, but prepare yourself to withstand fluctuations. Don't overdo the celebration of green (profitable) days if you don't intend to make profits now, because what you celebrate today may fall tomorrow and you will feel disappointed. If you don't celebrate too much, there's no reason to feel overjoyed during periods of upswings, because you won't have to feel too sad during periods of downswings. Markets always tend to be more bullish than bearish. The markets are technically oversold, but we have a busy week ahead, and if more fear starts to seep in, remember that 700 is a crucial support range. It seems we are perhaps preparing to begin recovering. But just when it seems we are about to recover, we can immediately fall back to the support level. If we break the 700 level, we will still have a large gap to fall. If public markets such as the Nasdaq and S&P 500 start to freefall, everything related to technology is likely to fall as well. This does not mean that the companies you invest in are suffering. It simply means that overall market sentiment is changing. Prepare yourself for success during market fluctuations.
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