Finance

Finance Docket: Bitcoin's Surge, Plentiful Deals, The Bear Case For Cats

Deals abound in the U.S. energy industry.

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Wall Street Faces $1 Billion in Fines

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Ed. note: This article first appeared in the Finance Docket newsletter. Subscribe below to view the full newsletter along with prior editions. 

Break out the champagne: The S&P 500 closed above 5,000 for the first time ever. With stocks on a tear, expect more record highs ahead.

Falling inflation certainly has something to do with soaring stock prices. The annual inflation rate came in at just over three percent, a deceleration since December but still above economists’ forecasts of 2.9 percent. Inflation has not been below three percent since March of 2021.

Steady progress notwithstanding, the Fed’s inflation fight is far from over. Fed Chair Jerome Powell said there will “probably not” be an interest rate cut in March, and markets are pricing in a 94 percent chance that rates will remain unchanged next month.

Deals abound in the U.S. energy industry. Companies are consolidating in the Permian Basin in West Texas and New Mexico. The latest example: Endeavor Energy Partners is being acquired by oil producer Diamondback Energy in a $26 billion cash-and-stock deal. The combined oil and gas company will be the third largest in America’s most productive shale oilfield, behind only Exxon Mobil and Chevron.

JetBlue Airways might have had its proposed merger with Spirit Airlines smacked down, but don’t count the scrappy airline out yet: Its shares spiked by more than 15 percent when activist investor Carl Icahn revealed his 9.91 percent stake. Calling the stock “undervalued,” Icahn plans to continue discussions with the company about the possibility of board representation.

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Few would accuse chip maker Nvidia of being undervalued, with the company’s share price more than quadrupling over the course of the last 15 months as AI fever grips the investing public. Nvidia’s semiconductor technology powers the most prominent examples of generative AI, and on February 12, the company’s market capitalization rose to $1.83 trillion, making it more valuable than Amazon and Google parent Alphabet. Among publicly traded companies, Nvidia just became the fourth most valuable, behind only Microsoft, Apple, and Saudi Aramco.

I suppose how broadly one defines artificial intelligence is to an extent a matter of opinion, but the market doesn’t seem to gauge a vacuum cleaner that can drive itself around your house as worthy of AI-craze level valuations. 2024 continues to be a rough year for iRobot, maker of the Roomba. Its stock remains in a prolonged slump after Amazon’s $1.4 billion deal to acquire iRobot fell through because of resistance from European antitrust regulators. If your vacuum cleaner does become self-aware and decides to take its revenge, do drop me a line – I have some experience in this area.

Finally, in lighter news, there is a confirmed case of human bubonic plague in Oregon. Officials assure us that the illness was caught early and there is “little risk to the community,” but if you needed another reason to become a dog lover, it appears that the unfortunate victim was infected by a feline companion.

Jonathan Wolf is a civil litigator and author of Your Debt-Free JD (affiliate link). He has taught legal writing, written for a wide variety of publications, and made it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

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