Bitcoin Breaks $76K, Bank of America Warns on 5% U.S. Yield; Retail Earnings Strong, Nvidia Outlook Mixed

Bitcoin rose 5.81% to $76,830. Crypto-related companies such as Robinhood and Coinbase also gained more than 4%. Expectations of U.S. government easing of crypto regulation are weighing on the market.

Microstrategy's shares rose about 10% in pre-market trading. This is estimated to reflect roughly $1.4 billion in unrealized gains on the company's Bitcoin holdings.

The U.S. 30-year Treasury yield is currently 5.258%, the 10-year 4.712%, and the 2-year 4.204%. Bank of America strategist Michael Hartnett warned that even with U.S. government intervention in the Treasury market, if the 30-year yield fails to fall below 5%, the dollar could fall significantly further.

BJ's Wholesale's second-quarter revenue came in at about $6.1 billion, above the $6.0 billion market consensus compiled by FactSet. Ross Stores also posted strong second-quarter results and raised its third-quarter earnings outlook.

Jefferies expects second-quarter revenue of $95 billion, above the $92.1 billion consensus, and offered a third-quarter revenue forecast of $108 billion. These projections reflect expectations for revenue from its next-generation AI system, 'Vera Rubin.'

Nvidia has delivered an earnings 'triple play' in 14 of the past 20 quarterly reports over five years. A triple play means earnings per share, revenue, and guidance all beat market expectations. It has achieved three consecutive triple plays recently, yet the stock fell after each of those three.

Gilluria noted that Nvidia's earnings may double, yet the stock is valued as if its growth has already ended.

There is controversy over Nvidia's circular financing structure, in which it lends money to customers so they can buy its GPUs. However, some argue it is not inherently bad. Davis pointed to cases such as Amazon and Google investing heavily in Anthropic, which in turn uses their cloud services at scale, and analyzed that this portion is small relative to Nvidia's total revenue and could be positive if the value of its investments rises.

The pool is structured as a mix of $60 to $70 billion in senior secured loans and subordinated debt from multiple financial institutions. It will operate by purchasing equipment through special purpose vehicles and leasing it to AI companies.

Neocloud GPU rental providers such as CoreWeave, Nebius, and IREN are growing rapidly thanks to large AI investments by hyperscalers. However, Noah Weisberger, chief strategist at BCA Research, said these providers are deploying too much capital to generate revenue. He flagged their heavy debt-funded investment, which leaves return on invested capital (ROIC) negative, as a concern.

He worried these companies could ultimately devolve into cyclical rental businesses.

Some on Wall Street, however, see neocloud stocks as strong in the short term.

He explained that the formula for valuing memory has changed entirely. Shipments of DRAM and NAND bits for data centers are expected to more than double compared with two years ago, and as AI demand evolves from training to inference, agents, and robotics, sustained demand creation is expected.

Micron announced a $250 billion investment plan in the United States and is building a large-scale semiconductor fabrication facility in Idaho. The first fab at this site is scheduled to begin wafer production from the middle of next year. Meanwhile, restrictions on Micron's share buybacks tied to receiving government subsidies will be lifted on December 8, allowing it to resume buybacks from December 9.

California diesel prices have surpassed $7 per gallon, and the U.S. average diesel price has surged to $5.50. The price increase is attributed mainly to a shortage of refining capacity and rising overseas export demand rather than a crude oil shortage. Because diesel is a core fuel for trucks and freight rather than just automobiles, and the U.S. logistics system relies heavily on trucking, concerns are growing that higher diesel prices could spread across the economy and intensify inflationary pressure.