Quantum's Here to Stay, Start Investing !
Wednesday came and went as quickly as a light breeze, with US market ending marginally higher than it started.
S&P 500 for its part chalked up its 2nd straight all-time high (ATH) closing as investors:
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Scrutinized the minutes from the Fed's January policy meeting.
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Digested US President Trump's tariff plans.
By the time market closed at 4pm: (see above)
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DJIA: +0.16% (+71.25 to 44,627.59).
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S&P 500: +0.24% (+14.57 to 6,144.50).
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Nasdaq: +0.07% (+14.99 to 30,056.26).
FOMC - January 2025 MoM
US’s Fed’s January 2025 minutes of meeting was finally released with little to no fanfare.
Factors that were speculated upon previously were confirmed.
These included :
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Policymakers concern about stubborn US inflation.
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Potential effect of Trump's policy proposals, particularly tariffs.
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Fed’s efforts to bring price growth down to their target.
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Some Fed officials suggested a pause or slow down on the central banks’ Quantitative Tightening (QT) activity, until Congress passes an increase in the federal debt ceiling,
In short, the Fed is unwilling to do anything until they get a little bit more clarity as to what the tariffs look like.
From that perspective (it's) a wait and see.
On the “new” 25% tariffs endorsed by Trump on automobiles, drugs and semiconductors - (as mentioned in my Wednesday’s post), traders have been inclined to view them as more of a negotiating tactic.
On the 10% tariffs already imposed on China, poker player Trump is finally showing his hand. (see below)
According to New York Times (NYT) report :
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Trump would like to strike a wide-ranging deal with China’s Xi, beyond just trade.
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It would have to go beyond commitment to purchase US goods
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Very likely to include nuclear weapons security.
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Accordingly, the Trump administration has not nail down what it wants from China
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His advisors - Lutnick, Bessent and Musk (with huge EV plant in China) are egging him to make a deal.
While we are at it, might as well throw Tiktok into the mix to make things more interesting, right !
Home Builder Confidence Index.
This was the economic report that showed that Trump did not have the wining card.
On Tue, 18 Feb 2025, US homebuilder sentiment tumbled to a 5-month low as (1) worries that Trump’s tariffs on imports, (2) combine with higher mortgage rates would drive up housing costs further.
The National Association of Home Builders (NAHB) /Wells Fargo Housing Market Index plunged -5 points to “42” in February 2025. (see above)
It is the lowest reading since September 2024, erasing all gains that were notched in the aftermath of the early November 2024 US president election.
The euphoric sentiments that rose in anticipation of a less-stringent regulatory environment has all but evaporated into thin air.
New home construction is heavily reliant on imported materials, with 32% of household appliances and 30% softwood lumber coming from international trade.
Uncertainty over the scale & scope of tariffs has builders further concerned about production costs.
Decline in homebuilder sentiment mirrored a decrease in consumer sentiment.
US is facing a crippling housing shortage, that has boosted rents and contributed to elevated inflation.
The hooliganic & antagonistic antics by the returned President instead of helping to foster closer working relationship internationally, has been sowing discords instead.
You’ve made your bed, now lie in it - right !
Microsoft Quantum Chip.
The quantum computing (QC) sector experienced significant volatility and growth from late 2024 to early 2025.
On 10 Dec 2024, $Alphabet(GOOG)$ unveiled its “Willow” quantum chip, showing it could perform calculations in under 5 minutes that would take conventional supercomputers 10^25 years.
The announcement sparked “spiked interest” in QC stocks.
In December 2024 alone, several quantum computing stocks saw remarkable gains:
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IonQ (IONQ)$ rose +14.4%,
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$Rigetti Computing(RGTI)$ increased by +400%.
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$D-Wave Quantum Inc.(QBTS)$ surged +178%.
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Quantum Computing (QTUM)$ increased by +134%.
QC sector continued to attract investor attention into early January 2025.
On 08 Jan 2025, things took an unexpected turn (for the worse) for QC stocks.
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When asked during the CES event at Las Vegas, Nvidia’s veteran CEO Jensen Huang insinuated that effective quantum computers might be 15 to 30 years away from practical implementation.
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The irresponsible statement caused a panic selloff, wiping out approximately $8 billion in market value from QC companies.
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Overnight, IONQ fell over -40%, RGTI dropped more than -45%, and QBTS declined -36%.
Despite the setback, interest in quantum computing persisted.
On Wed, 19 Feb 2025, $Microsoft(MSFT)$ announced a breakthrough with its Majorana 1 quantum chip. (see above)
MSFT claimed that it could enable the construction of commercially viable quantum computers within 5 years.
The announcement reinvigorated the QC sector, potentially setting the stage for further developments and market fluctuations in the QC industry.
For Thu, 20 Feb 2025, think the good news surrounding QC stocks have begun to set in. (see below)
On Wed, 19 Feb 2025, the Top 3 most “popular” QC stocks closed with generous gains : (see above)
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IONQ : +0.59% (+$0.20 to $34.14).
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QBTS : +8.28% (+$0.50 to $6.54).
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RTGI : +4.85% (+$0.51 to $11.03).
For Thu, 20 Feb 2025, pre-market indicators are set to soar : (see above)
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IONQ : +4.80% (+$1.64 to 35.78).
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QBTS : +11.16% (+$0.73 to $7.27).
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RTGI : +11.06% (+$1.22 to $12.25).
Hopefully with MSFT’s breakthrough achievements, it will (again) reinvigorate quantum computing stocks and bestow upon them the well-deserved attention for the years of perseverance in a path less trodden. Salut !
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Do you think quantum computing stocks will take the well-deserved centrestage again ?
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Do you think quantum stock RGTI, will be the defacto leader for this industry ? If not, which ?
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