The markets continued their bearish turn on Monday, December 15, following the weekend, with major declines in AI and cryptocurrency stocks, once again igniting the AI bubble debate, as well as deeper dives into the Federal Reserve’s rate cut division.
Coming tomorrow is the November jobs report, which could give more profound insight into the current US economic condition.
- The S&P 500 was slightly down, 0.2% with Broadcom declining 5.6%.
- The tech-heavy Nasdaq Composite slipped 0.6% buoyed by declines in Strategy, Arm Holdings, and Workday.
- The Dow Jones Industrial Average was down 0.1%, while the small-cap Russell 2000 closed 0.8% lower.
Gold and Silver continued to be the better performers, up 0.14% and 3.24% respectively. Silver continues its rally, up 119% year-to-date, proving to be a more accessible alternative to the mighty gold.
Two developments are emerging amid market volatility: investors are increasingly diversifying their portfolios due to the tech sell-offs, and while cryptocurrency exchanges and stocks declined today, there is a growing shift towards the tokenized money market.
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The expanding predictions market and cryptocurrency inclusion
Let’s not forget the expanding prediction market. A latest entrant is Gemini Space Station’s affiliate Gemini Titan, which received Commodity Futures Trading Commission (CFTC) approval to offer regulated prediction markets to US customers. The approval, which came after a five-year wait, now puts Gemini in direct competition with Kalshi and Polymarket.
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Regarding Kalshi, last week it announced the formation of the Coalition for Prediction Markets (CPM) alongside industry giants including Coinbase, Robinhood, and Underdog. Given the growing prediction markets space and “democratization of market participation,” these betting platforms have identified a need to preserve “safe, transparent, and federally supervised access to prediction markets.”
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In the world of cryptocurrencies, JPMorgan debuted a $100 million ‘MONY’ fund on the Ethereum blockchain. My OnChain Net Yield Fund, or MONY, is the bank’s first tokenized money fund and will be initiated with a $100 million seed investment from the bank itself, before it opens for public investment on Tuesday, as first reported by The Wall Street Journal.
Additionally, last week, Klarna, the buy-now pay-later provider, partnered with Privy, a wallet infrastructure platform, to make crypto solutions available for its users. This partnership follows Klarna’s launch of its own stablecoin, KlarnaUSD, as it now invests in research and potential solutions “to power a new generation of crypto products for Klarna users.”
The company’s stock was down 2.7% on Monday.
All this comes amid a Bank of America report, which views the recent moves by US regulators as a critical moment for integrating digital assets into the federal banking system.
The Office of the Comptroller of the Currency (OCC) recently approved National trust bank charters, although conditionally, for five major firms: Circle, Paxos, Fidelity, BitGo and Ripple, to normalize crypto custody and issuance of stablecoins under fiduciary restrictions. The report comes as Bank of America, earlier this month, allowed its advisors to recommend digital assets for clients.
The report highlights a significant shift in crypto integration, albeit with a focus on standardization. However, today there was a decisive decline in related stocks; Bitcoin was down 2.4% at the time of the report, while Coinbase, the crypto exchange, declined more than 6% intraday.
Strategy, a bitcoin treasury, declined by more than 8% on Monday, as it disclosed in a regulatory filing that it had purchased 10,645 new Bitcoins last week for approximately $980.3 million.
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AI and the White House
There are some major developments in the world of tech and AI, despite the talk of bubbles and tech sell-offs.
On Monday, the US administration announced its US Tech Force to build “the next generation of government technology.”
In collaboration with a group of private companies, including Amazon Web Services, AMD, Apple, Databricks, Dell, Microsoft, Nvidia, OpenAI, Palantir, and more, the Trump administration will be hiring 1000 engineers to be a part of an elite corps, dedicated to ushering in the next generation of government technology.
The program will last for two years, during which engineers will work with technology companies, receive training and guidance from experts in the field, and remain open to the possibility of full-time employment by these companies upon program completion.
This marks a significant step in increasing the government’s role in accelerating AI advancement, improving critical government infrastructure with the latest technologies, and providing new job opportunities to its citizens.
Stock movers
Rocket Lab Corporation, a US-based space company, successfully launched its first dedicated mission for the Japan Aerospace Exploration Agency on Sunday, December 14. However, the company’s stock paradoxically suffered from the success, and was down 9.9% on Monday, continuing to decline after hours.
From one success to another, biotech company Immunome reported positive topline results from its Phase 3 RINGSIDE trial of varegascestat in patients with progressing desmoid tumors. Desmoid tumors are non-cancerous growths that can cause swelling, pain, and loss of function depending on the location in the body.
The successful trial of the medicine underlines its potential to become a once-daily, oral medicine helping “patients reclaim their lives,” said Clay Siegall, CEO of Immunome. Following the news, the stock of this biotech company surged 15%, reaching a new 52-week high and marking a 113% year-to-date gain.
Given the success, Leerink raised its price target for the company to $40 from $30, keeping an Outperform rating, citing that this success has moved Immunome’s investment thesis RINGSIDE to commercial launch and execution. It already has a strong and successful track record; this news achievement opens the door for the unveiling of a new pipeline and could unlock a roughly $780 million peak revenue opportunity, according to the analyst, as noted by TheFly.
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