Eksentricity

Tech

Cryptocurrency Regulation

• US Court Proposes Regulation for Crypto: A US District Court ruled that the money laundering case against Roman Storm, co-founder of Tornado Cash, will proceed. The court rejected Storm’s claims that prosecutors failed to prove Tornado Cash was a money-transmitting business and he willfully conspired to evade sanctions.
• Dutch Developer Found Guilty of Money Laundering: A Dutch court convicted Tornado Cash developer Alexey Perstev of money laundering, sentencing him to 64 months in prison. The court ruled that Perstev laundered $1.2 billion in illicit assets using the platform.
• Code and the First Amendment: The judge in the Storm case ruled that while some computer code may be considered protected speech, the “functional capacity” of code is not protected under the First Amendment. This means that using code for illegal activities like money laundering is not protected by free speech rights.

Open Source AI Advancements

• Meta’s Multimodal Llama 3.2: Meta released an upgraded version of its large language model, Llama 3.2, which includes both text and image processing capabilities. The model comes in four sizes, ranging from 1B to 90B parameters, enabling versatile applications.
• AI on Mobile Devices: Meta partnered with Qualcomm, MediaTek, and Arm to ensure Llama 3.2 can run efficiently on mobile devices, enabling private, local AI interactions without relying on third-party servers.
• Multilingual Text Processing: The smaller versions of Llama 3.2 excel at multilingual text tasks, including summarization, instruction following, and rewriting, offering potential for global language applications.
• Vision Capabilities: Llama 3.2’s vision capabilities were achieved by adding adapter weights to the existing language model, allowing it to process images without sacrificing its text processing abilities.

Company Funding and Operations

• Verses AI Secures Funding: Verses AI, a cognitive computing company, raised C$5 million through its private placement. The funds will be used for general working capital and corporate purposes.
• Foresight and BuilderX Partner on Heavy Machinery AI: Foresight Autonomous Holdings, a developer of automotive vision systems, announced a multi-phase collaboration agreement with BuilderX, a Chinese developer of AI tele-operations equipment for heavy machinery. The partnership aims to develop advanced 3D perception solutions for construction machinery and equipment.

Earnings and Stock Performance

• Adobe’s Insider Sale: Adobe’s Chair and CEO, Shantanu Narayen, sold 25,000 shares of the company, totaling $13.04 million. This insider sale may not necessarily indicate a bearish view, but it is important for investors to consider such transactions when evaluating a company’s stock.

Cryptocurrency Exchange Executive Released from Prison

• Binance Executive Released: Binance co-founder Changpeng Zhao (CZ) was released from prison after serving a four-month sentence for failing to maintain an effective anti-money laundering program.
• Restrictions on Binance Involvement: Despite his release, CZ faces strict limitations on his involvement with Binance. He is barred from holding executive or strategic roles and cannot participate in the company’s daily operations.
• Binance’s Continued Operations: Binance continues to operate under its current leadership, with over 230 million users globally.

Finance

Investment Banking Recovery

• IB Revenue Surge: Jefferies (JEF) reported a 47% year-over-year surge in investment banking revenues for the third quarter of fiscal 2024, reaching $949 million. This surge was driven by strong performance in advisory and underwriting businesses.
• Positive Outlook for Major Banks: JPMorgan (JPM), Citigroup (C), Bank of America (BAC) and Goldman Sachs (GS) are expected to report solid investment banking performance for the third quarter. JPMorgan and Citigroup are anticipated to see a 15% and 20% year-over-year jump in investment banking fees, respectively.
• Dealmaking Slowdown Anticipated: Despite a healthy third quarter, dealmakers are bracing for a slowdown in global M&A volume ahead of the U.S. elections. A rebound is expected in early 2025.
• Interest Rate Cuts and Economic Outlook: Interest rate cuts and a higher chance of a soft landing for the U.S. economy are expected to support dealmaking activities and contribute to strong investment banking profits for Wall Street players.

Securities Class Action Lawsuits

• Metagenomi Inc. (MGX) Lawsuit: A securities class action lawsuit was filed against Metagenomi, alleging that the company misled investors about its strategic collaboration agreement with Moderna, which was terminated in May 2024.
• DexCom, Inc. (DXCM) Lawsuit: A securities class action lawsuit was filed against DexCom, alleging that the company made misleading statements about its growth and margins, failing to disclose challenges in retaining existing distribution channels.
• Lifecore Biomedical, Inc. (LFCR) Lawsuit: A securities class action lawsuit was filed against Lifecore Biomedical, alleging that the company made false and misleading statements about its financial reporting and remediation efforts.
• Orthofix Medical Inc. (OFIX) Lawsuit: A securities class action lawsuit was filed against Orthofix Medical, alleging that the company failed to disclose inappropriate and offensive conduct by certain members of its management team.

Insider Trading Activity

• Darden Restaurants (DRI) Insider Activity: The President of Darden Restaurants exercised stock options for 4,939 shares of DRI stock, with a total value of $425,104.
• Oxford Industries (OXM) Insider Activity: SCOTT GRASSMYER, EVP at Oxford Industries, sold 1,495 shares of OXM stock, with a total value of $129,715.
• AMETEK (AME) Insider Activity: Steven Kohlhagen, Director at AMETEK, sold 1,460 shares of AME stock, with a total value of $250,525.

Earnings Announcements

• Horizon Bancorp, Inc. (HBNC) Earnings Call: Horizon Bancorp will host a conference call on October 24, 2024 to review its third quarter 2024 financial results.

Healthcare

US Medical Cannabis Expansion

• Kentucky Awards First Medical Cannabis License: Kentucky’s first medical cannabis license was awarded to KCA Labs, which will conduct rigorous testing for product safety. The state plans to hold a lottery for cultivator and processor licenses on October 28th and dispensary licenses in November. Nearly 5,000 applications have been submitted.
• Kentucky’s Regulated Cannabis Market: After years of delays, Kentucky lawmakers legalized medical cannabis in 2023. The state aims to regulate the market through a lottery system for license allocation, aiming to prevent market flooding. Governor Andy Beshear signed legislation in April 2024 accelerating the licensing timeline by six months, allowing the program to begin awarding licenses in 2024.

US Biologics and Drug Development

• Theriva Biologics Capital Raise: Theriva Biologics, Inc. (NYSE American: TOVX) announced the pricing of a public offering for up to 1,428,600 shares of common stock and warrants to purchase up to 1,428,600 shares of common stock at a combined offering price of $1.75 per share. The company expects to receive aggregate gross proceeds of approximately $2.5 million, before deducting placement agent fees and other offering expenses. The net proceeds will be used primarily for working capital and general corporate purposes, including for research and development and manufacturing scale-up.
• Biomea Fusion’s Diabetes Drug Program Resumes: The FDA lifted the clinical hold on Biomea Fusion’s (BMEA) ongoing studies evaluating its lead candidate, BMF-219, for treating type 2 and type 1 diabetes. The safety review of the phase IIb expansion portion of the COVALENT-111 study showed that the concerning safety signals observed in the phase IIa escalation portion of the study did not carry over. Top-line data readout from the phase IIb portion of the COVALENT-111 study (approximately 200 patients) and the phase IIa portion of the COVALENT-112 study (approximately 20 patients) are expected in the fourth quarter of 2024.
• Biomea Fusion’s Expanded Pipeline: The company plans to announce a third development candidate, a potent, selective, oral small molecule GLP-1 receptor agonist, by the end of this year. Biomea is also developing BMF-219 for several oncology indications. Two separate early-stage studies are currently ongoing evaluating the candidate in patients with liquid tumors and those with KRAS solid tumors. The company also has another investigational candidate in its pipeline, BMF-500, which is currently being developed for the treatment of adult patients with relapsed or refractory acute leukemia.

Economy & Real estate

US Inflation Cooling

• Inflation Rate Decline: The US economy saw a positive sign in August, as the personal consumption expenditures price index (PCE), a key inflation gauge, rose by only 0.1%. This brought the 12-month inflation rate down to 2.2%, marking the lowest rate since February 2021 and putting it closer to the Federal Reserve’s 2% target.
• Core Inflation Moderation: Core PCE, which excludes food and energy, also increased by 0.1% in August, resulting in a 12-month rate of 2.7%. While this is slightly higher than July, it still signals continued progress in taming inflation.
• Fed Rate Cuts Impact: The Federal Reserve has implemented rate cuts, including a 50-basis point reduction in August, to further support economic stability. These cuts are anticipated to continue as inflation moderates, aiming to support a potentially softening labor market while preventing a significant economic downturn.
• Consumer Spending and Income: Despite the positive inflation news, personal spending and income growth remained modest in August, increasing by 0.2% each. This suggests consumers are adapting to a potentially cooling economy.

Real Estate Market Trends

• Realty Income’s Growth: Realty Income (O), a major player in the net lease sector, has seen a significant 18.3% stock increase in the past three months. This surge can be attributed to recent rate cuts and the company’s robust growth strategy.
• Dividend Increases: Realty Income has a strong history of dividend payouts, having increased its dividend 127 times since listing on the NYSE in 1994. Its recent dividend hike further emphasizes its commitment to shareholder returns.
• Portfolio Diversification: Realty Income has diversified its portfolio, expanding into industrial properties, gaming assets, and data centers. The company is also exploring new acquisition opportunities in the European market.
• Valuation: The stock is trading at a forward 12-month price-to-FFO of 14.50X, which is at a discount to the industry average but above its 1-year median. This suggests that the market has already incorporated the company’s growth potential.

Realty Income Outlook

• Rate Cut Benefits: The recent rate cuts are expected to benefit Realty Income, given its reliance on debt financing and its reputation as a bond alternative.
• Future Growth Potential: Realty Income’s aggressive investment strategy and focus on diversification are creating opportunities for future growth.
• Potential Challenges: The company’s size could limit its ability to achieve significant earnings growth in the near term, and any economic downturn could negatively impact its performance.
• Investor Sentiment: Existing shareholders may choose to hold their shares, while potential investors might wait for a more favorable entry point before investing.

Retail

E-commerce Trends

• Holiday Online Sales Growth: Projected to reach $240.8 billion, representing an 8.4% year-over-year increase, driven by continued consumer spending and rising e-commerce adoption.
• Mobile Shopping Growth: Expected to reach $128.1 billion, representing a 12.8% year-over-year increase, highlighting the importance of mobile-first experiences.
• Cyber Monday Sales Record: Projected to reach a record $13.2 billion, a 6.1% increase from the previous year, remaining the year’s biggest shopping day.

Retail Performance & Rate Cuts

• Rate Cut Impact on Retail: The Federal Reserve’s rate cut is anticipated to boost retail sales by encouraging consumer spending and driving overall growth.
• Retail Sales Growth: Retail sales increased by 0.1% in August, following a strong 1.1% increase in July, demonstrating resilience despite inflationary pressures.
• Online Sales Rebound: Online sales increased by 1.4% in August, reversing a decline from the previous month, highlighting the continued importance of digital channels.

Retail Stocks Performance

• Strong Earnings Growth Prospects: Companies like PC Connection, JD.com, Burlington Stores, and Abercrombie & Fitch are projected to experience significant earnings growth.
• PC Connection (CNXN): Expected to have a 9.9% earnings growth rate, driven by positive earnings estimate revisions.
• JD.com (JD): Projected to have a 27.2% earnings growth rate, benefiting from its leading position in China’s online direct sales market.
• Burlington Stores (BURL): Expected to have a 30.5% earnings growth rate, appealing to investors seeking exposure to value-oriented retail.
• Abercrombie & Fitch (ANF): Projected to have a 63.4% earnings growth rate, fueled by strong demand for its premium casual apparel.

Costco Performance and Expansion

• Strong Earnings Results: Costco reported solid earnings per share of $5.29, exceeding analysts’ expectations despite a slight revenue miss.
• Membership Fee Hike Impact: The recent membership fee hike is expected to have a minimal impact on the current fiscal year, with benefits realized in the latter half of fiscal 2025 and into fiscal 2026.
• Value-Focused Strategy: Costco’s focus on offering value at competitive prices continues to resonate with consumers, making it a top destination for affordability.
• Expansion Plans: Costco added 29 net new locations in fiscal 2024, including its first location in Maine, and plans to add another 26 in fiscal 2025.

Commodities

Cryptocurrency Market Performance

• Litecoin Price Surge: Litecoin (LTC) has experienced a 4.5% price increase in the past 24 hours, reaching $70.26. This positive momentum follows a strong week of trading, with a 18.0% increase in trading volume. Litecoin currently holds the #25 spot in market cap ranking at $5.27 billion.
• Optimism Price Gains: Optimism (OP) has seen an 8.98% price surge in the past 24 hours, reaching $1.88. This positive performance is supported by a 13.0% gain over the past week. Optimism’s trading volume has also increased by 9.0% over the past week, with its circulating supply reaching over 1.26 billion, a 5.85% increase. Optimism currently holds the #47 spot in market cap ranking at $2.36 billion.

Stock Picks

Momentum Investing

• High Momentum ETF Performance: The SPDR S&P 1500 Momentum Tilt ETF (MMTM) has gained 46.08% since its 52-week low of $172.61/share, reaching a new 52-week high. The fund’s performance is driven by expectations of future interest rate cuts, a positive factor for momentum investing. It charges 12 bps in annual fees and boasts a positive weighted alpha of 37.15, suggesting continued growth potential.
• High Momentum Stocks: The ‘Fast-Paced Momentum at a Bargain’ screen identifies stocks with rapidly rising prices that remain attractively valued. Clipper Realty Inc. (CLPR) is a prime example, having surged 46% in the past 12 weeks and 8.9% in the last four weeks. CLPR boasts a Momentum Score of A and a Zacks Rank #2 (Buy), indicating strong potential for further price appreciation. Its valuation, at 0.59 times sales, suggests it is reasonably priced.
• Momentum in Flooring: Mohawk Industries (MHK), a prominent flooring manufacturer, has gained 42.5% over the past 12 weeks and 1.8% in the last four weeks, showcasing robust momentum. With a Momentum Score of B, MHK presents a promising entry point for investors seeking to capitalize on this trend. The stock has a Zacks Rank #2 (Buy) and trades at 0.91 times its sales, indicating a reasonable valuation.
• Momentum in Japan: Unicharm (UNICY) has exhibited strong momentum, rising 11.1% over the past 12 weeks and 2.6% in the past four weeks. Currently trading at 82.8% of its 52-week High-Low Range, the stock suggests potential for a breakout. Unicharm holds a Zacks Rank #2 (Buy) and an Average Broker Recommendation of #1 (Strong Buy), confirming its fundamental strength.

Earnings Surprises

• Earnings ESP: The Zacks Expected Surprise Prediction (ESP) identifies stocks poised to exceed their next earnings consensus estimates. The ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate and considers the Zacks Rank.
• US Cruise Line Earnings: Royal Caribbean (RCL) boasts a Zacks Rank #2 (Buy) and an Earnings ESP of +0.44%, suggesting a potential for a positive earnings surprise when it reports on October 24, 2024.
• US Gaming Earnings: PlayAGS (AGS) holds a Zacks Rank #3 (Hold) and an Earnings ESP of +27.5%, indicating a high likelihood of exceeding earnings estimates when it reports on November 5, 2024.

Price Strength

• Recent Price Strength Screen: This screen pinpoints stocks with strong fundamentals and recent price increases. These stocks are trading in the upper portion of their 52-week high-low range, suggesting bullish sentiment.
• US Funeral Services Sector Strength: Carriage Services (CSV), a leading provider of funeral and cemetery services and products, has gained 21.1% over the past 12 weeks and 0.1% in the last four weeks, displaying robust momentum. Currently trading at 87.7% of its 52-week High-Low Range, CSV hints at a potential breakout. It boasts a Zacks Rank #1 (Strong Buy) and an Average Broker Recommendation of #1 (Strong Buy), confirming its strong fundamentals.