The markets are reeling as we head into the weekend, with stocks, gold, silver, and cryptocurrencies all sliding. Crude oil is higher, though, as are Treasuries. The dollar is flat.
The late, great “shutdown is over” rally fell on its face yesterday. The stock market had its worst day in a month, with tech names and small caps getting hit particularly hard. Investors are growing concerned the Federal Reserve will NOT cut interest rates at the Dec. 9-10 meeting, while also starting to question the likelihood of a year-end rally.
Plus, chatter about a bubble in the Artificial Intelligence (AI) world keeps getting louder – and AI stocks are selling off in response. The Global X Artificial Intelligence & Technology ETF (AIQ) has shed more than 8% since November began – much more than the S&P 500 Index (^SPX), which is down 1.6% in the same timeframe.
AIQ, SPX (MTD % Change)
Meanwhile, we already have a “bear market” – in Bitcoin. The benchmark cryptocurrency lost more ground this morning, extending the decline from its October peak to more than 20%. A massive liquidation event in the crypto world Oct. 10 has been followed by crypto ETF outflows. In fact, Blomberg reports that $870 million was pulled from Bitcoin ETFs yesterday – the second-highest outflow day since the funds started trading.
In M&A land, Big Pharma name Merck & Co. (MRK) is buying Cidara Therapeutics Inc. (CDTX) for $9.2 billion. The deal adds Cidara’s development-stage flu drug CD388 to Merck’s arsenal. Merck is paying $221.50 per share, more than double the price ($105.99) that CDTX shares closed on Thursday. MRK also spent $10 billion recently to buy Verona Pharma to add that company’s obstructive pulmonary disease treatment.
Lastly, President Trump is backtracking on some tariffs and closing deals with several Latin American countries amid concerns about higher food prices. Trade agreements with countries like Argentina and Ecuador, plus tariff carve outs for certain products like bananas and coffee, are designed to address domestic worries over the cost of living.
The iShares Latin America 40 ETF (ILF) has vastly outperformed the SPDR S&P 500 ETF (SPY), rising 49% year-to-date versus 15.6%. The Global X MSCI Argentina ETF (ARGT) struggled for a while over worries about President Javier Milei’s political future. But the free-markets advocate got a boost from midterm elections last month, pushing ARGT back into the black (+9.1%) on the year.
