AI Breakthroughs from Microsoft and Market Developments

To gain an edge, this is what you need to know today.

Overview of Microsoft Progress

An enlarged chart of Microsoft Corp MSFT illustrates the big picture in the current market. This article highlights major trends rather than focusing on individual stocks.

• The chart indicates that MSFT stock has seen a significant increase so far in December.
• It shows support and resistance zones that are critical for investors to consider.
• The Relative Strength Index (RSI) shows that MSFT is currently overbought, suggesting a potential pullback may be on the horizon.
• Recently, the Arora Report mentioned a significant milestone in AI development, focusing on human-like reasoning capabilities evidenced in the Model GPT-4o by OpenAI.
• Additionally, Microsoft has launched Phi-4, a small language model that has demonstrated superior performance in specific mathematical reasoning tasks when compared to GPT-4o.
• Despite being much smaller in size, Phi-4 outperforms its larger counterpart, indicating a shift in the belief that “bigger is better.”
• This innovation in AI is vital for investors looking to stay ahead in the rapidly changing technological landscape.
• The Arora Report predicts that small language models like Phi-4 hold bright prospects, foreseeing substantial opportunities in AI by the year 2030.
• Excitement has spread in the stock market following the announcement that AI software company Palantir Technologies Inc PLTR and significant bitcoin holder MicroStrategy Inc MSTR will be included in the Nasdaq 100.
• On a broader economic note, Japan's SoftBank Group Corp – ADR SFTBY plan to make a $100 billion investment in the U.S. is viewed positively by investors.
• Market sentiments are further buoyed by expectations that the Federal Reserve might cut interest rates soon.
• While U.S. markets show resilience, they seem less affected by ongoing weaknesses in European and Asian economies, largely due to optimistic media influences over the weekend.

International Market Updates

In recent news, Moody's has downgraded France's credit rating, leading to declines in French stocks and bonds. Meanwhile, China faces challenges with disappointing retail sales data, reporting a growth of only 3.0% year-over-year against a consensus of 4.8%. This raises concerns about the Chinese consumer's spending habits despite government stimulus efforts.

The stark contrast between U.S. and Chinese consumer behavior is noteworthy; U.S. consumers are actively spending, while Chinese consumers are leaning towards savings.

Stock Movement among the Magnificent Seven

In today's early trading, there are positive money flows observed in major companies such as Amazon.com, Inc., Alphabet Inc Class C, Meta Platforms Inc, NVIDIA Corp, and Tesla Inc. Conversely, money flows are neutral for Apple Inc and Microsoft Corp.

Bitcoin Rumor Impact

This weekend also saw Bitcoin BTC/USD spike above $106,000 due to rumors claiming that Trump may announce a bitcoin reserve on his first day.

Investor Strategy and Protection

Investors are advised to look forward rather than backward. The proprietary protection band is a popular tool for investors, integrating various data and indicators into actionable insights.

It’s wise for investors to maintain long-term positions based on individual risk preferences, along with a protection band that may incorporate cash, Treasury bills, and tactical trades. Such strategies help in mitigating risks while still aiming for gains.

In a traditional 60/40 portfolio setup, those focusing on high-quality bonds might consider limiting their bond durations to five years or less.

Final Thoughts

The Arora Report has garnered attention for its accurate forecasts, including its early predictions about the AI rally, market trends, and economic fluctuations.

AI, Microsoft, Bitcoin