Markets A.M.: The Everyday Traders Riding MicroStrategy's Big Rally

Dow Jones11-29

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Hello, I'm Katy Barnato, here to get you ready for a holiday-shortened Black Friday session. Today is the last trading day of the month and benchmarks are on pace for big gains, boosted by Donald Trump's election victory.

Retailers are in the spotlight, hoping that Black Friday sales will reignite tepid demand from budget-minded shoppers. Get the details below, and learn more about the everyday traders riding MicroStrategy's rally.

The U.S. stock market closes at 1 p.m. ET, while bond markets are slated to shut an hour later.

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Stocks to Watch

Hasbro : The toymaker rose more than 4% in premarket trading after Elon Musk ignited takeover speculation by asking how much the company is worth on his X social-media platform.

Applied Materials, Lam Research and Nvidia : Semiconductor stocks were also notable offhours gainers, after Bloomberg News reported that the Biden administration's planned curbs to the industry's sales to China would be less severe than anticipated.

Alphabet : Canada sued Google, alleging anticompetitive practices in online advertising , marking the latest regulatory headache for the tech company.

Meituan : The Chinese food-delivery company said profit more than tripled last quarter , continuing to exceed expectations as it faces fierce competition and a cooling Chinese economy .

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Meet the Everyday Traders Riding MicroStrategy's Furious Rally

By Jasmine Li and Vicky Ge Huang

An unprofitable software company has become one of the market's hottest stocks, with the help of 386,700 bitcoins and a legion of individual investors.

Bitcoin skeptics say MicroStrategy and its investors are playing with fire and point to the token's history of booms followed by busts. Yet for MicroStrategy's fan base, the volatility-and opportunity to amplify their gains over a short period-is key to the stock's appeal. These are some of their stories:

George Bodine, Covington, Ky.: The retired airline captain and die-hard bitcoin fan bought a modest stake in MicroStrategy in January that has grown into a seven-figure position. "I'm getting more bitcoin than I could even in the market just buying spot [bitcoin]," the 69-year-old said.

Peter Duan, Los Angeles: The 35-year-old wealth adviser went all in on MicroStrategy in September after selling his bitcoin and Tesla holdings. He says he wouldn't recommend MicroStrategy stock to his clients. "It is a very sophisticated trade that 99.99% of Wall Street doesn't even understand."

Rajat Soni, Toronto: The 32-year-old invested in bitcoin exchange-traded funds, before going down the MicroStrategy rabbit hole. "Once you see it, you can't unsee it," Soni said of MicroStrategy founder Michael Saylor's vision to turn his company into a bitcoin buying machine.

Keep reading . Charting the Markets

Retailers hope Black Friday will reignite tepid demand from budget-minded shoppers. Recent results from Walmart, Gap and T.J. Maxx suggest shoppers are willing to spend on good deals . And businesses are urging customers to buy now, before new tariffs potentially raise costs- and prices .

The small-cap Russell 2000 and the Dow Jones Industrial Average are up more than 10% and 7.1% respectively in November, on pace for their biggest monthly percentage gains this year. The S&P 500 and the Nasdaq Composite have added more than 5%.

The Russian economy, surprisingly resilient through two-plus years of war and sanctions, has suddenly begun to show serious strains. The ruble fell to a 32-month-low against the dollar this week. The free fall was stopped after Russia's central bank intervened in currency markets Wednesday.

Must Reads

Citigroup is nearing a milestone in its efforts to spin off its Mexican consumer bank. Banamex is the biggest of 14 international consumer-banking businesses that Citi is shedding as part of plans to simplify its structure and focus on multinational companies and wealthy individuals.

Wall Street isn't thrilled about the return of Donald Trump's tariff threats, but investors aren't panicking either. Many are hopeful that increased trade frictions will be offset by other parts of his agenda, including plans to extend tax cuts .

Investors in EV startups, a sector already struggling, may be less sanguine. The president-elect has pledged to get rid of a $7,500 tax credit for electric vehicles, and executives are concerned that funding for EV and battery projects could be in jeopardy.

Hospitals could also become a target for a Republican administration looking to curb spending . Although Big Pharma and insurers often take political heat, hospitals account for about 30% of the $4.5 trillion the U.S. spends annually on healthcare, compared with 9% for drugs.

More:

For Black Friday Shopping Die-Hards, the Mall Magic Remains Home Buyers Enter a Strange New World Warren Buffett Talks to His Kids About His Will. You Should Too. This Day in Markets

On Nov. 30, 1920, Charles Ponzi pleaded guilty to fraud charges and was sentenced to five years in prison. He had promised investors a 50% return in 45 days, but simply used new clients' money to repay earlier ones.

Read more about the original Ponzi scheme and other corporate misdeeds by signing up for the Journal's email series 7 Financial Crimes that Rocked the U.S.

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About Us

We want to be the first place you go to get ready for the opening bell every day. This newsletter was written by Katy Barnato ( @KatyBarnato ) in London.

This article is a text version of a Wall Street Journal newsletter published earlier today.

 

(END) Dow Jones Newswires

November 29, 2024 07:03 ET (12:03 GMT)

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