🎙️ Apple Stumbles

🤖 As listings of AI-related jobs are rising, tech job listings have fallen year-over-year.

Postings for artificial intelligence-related roles are growing rapidly and touting higher pay, mostly within mathematics, software development, science, and engineering.

About three-quarters of companies say AI skills justify a pay premium, with many salaries well into the six figures.

As one partner at a consulting firm says, AI is “the tech area du jour.”

— Matthew & Shawn

Here’s today’s rundown:

Today, we'll discuss the biggest stories in markets:

• Bitcoin funds keep pulling in money at a record pace

• Apple’s stumbling start to 2024

This, and more, in just 5 minutes to read.

Chart(s) of the Day

In The News

📈 Bitcoin Funds Pull in Money at Record Pace

As bitcoin soars, bitcoin funds are pulling in record inflows. Investors have plowed money into the funds at a historic rate since the Jan. 11 launch: Total assets in the 10 U.S. spot bitcoin funds have grown to nearly $50 billion.

• BlackRock’s bitcoin ETF is the fastest to reach $10 billion in assets. Get this: Only about 4% of the more than 3,000 listed U.S. ETFs have more than $10 billion in assets.
  

• Fidelity’s fund, with about $6 billion in assets, is already the asset manager’s third-largest ETF.
  

• “It’s been a persistent wave of demand. These products came out of the gates strong and they’ve remained strong,” said one financial analyst. 

For everyone: The new bitcoin funds allow virtually anyone to buy the digital assets through their brokerage accounts — no need for a crypto exchange or funds that track bitcoin’s price through futures contracts. 

Although some called for a selloff after the ETFs became widespread, bitcoin has soared as the pace of flows has accelerated. Bitcoin has jumped over 55% over the past four weeks and is now up about fourfold since the recent bottom in late 2022. 

• The digital asset ended 2023 near $40,000 and was hovering around $23,000 a year ago.
  

• What’s interesting about the ETFs is that investors’ embrace of them is driving more bullishness while creating new demand.

“This is one of those rare instances where the price of the underlying asset is tied to the fund,” another analyst said. “It’s hard to quantify, but bitcoin’s performance is tied to the hope that there will be greater availability. There’s a circular benefit here.”

Why it matters:

As we covered in January, the funds opened the floodgates. Now, money managers and financial advisors can more easily enter the asset class. Previously, many didn’t because they didn’t have an SEC-regulated product that reliably tracked bitcoin’s price. But that changed with the ETFs. 

• BlackRock’s bitcoin fund racked up the third most money of any U.S. exchange-traded fund in February, beating out its largest S&P 500 ETF for flows.
  

• February’s most popular funds: Vanguard’s S&P 500 fund and its information-technology fund. Fidelity’s bitcoin fund was No. 8.

Added an investment partner: “The speed at which investors have adopted these has been a surprise. It’s a very unusual situation.”

Read more

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This 77% Return Is An Outlier — But The Rest May Surprise You

The news is true: Masterworks’ 15th sale just weeks ago returned an impressive 77% to investors. While such a high return is an outlier for the blue-chip art investing platform, you might be wondering what their prior sales delivered 🎨

Glad you asked… 

Every one of their sales has returned a profit to investors, with 12 of them delivering double-digit returns, and 1 delivering triple-digit annualized returns. 

In full, Masterworks has over 300 paintings and their 16 exits have delivered: 32%, 39.3%, 36.2%, 27.3%, 9.2%, 33.1%, 21.5%, 17.8%, 13.9%, 35%, 10.4%, 325.5%, 4.1%, 17.6%, 77.3%, and 13.4% net annualized returns. 

Every sale but one outperformed the stock market in the period from when it was offered to when it was sold. 

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🍎 Apple Shares Stumble on Series of Bad News

One of the market’s most important stocks and a pillar of the “Magnificent 7” is off to a bumbling start for 2024. On Tuesday, Apple shares fell almost 3%, marking an over 8% decline for the year.

That comes amid a report that Apple’s iPhone sales plunged 24% in China during the first six weeks of 2024. Its market share in the country fell from 19% to 16% since last year, while China’s homegrown smartphone maker, Huawei, saw its market share rise from 9.4% to over 16%.

• As Bloomberg reports, the dropoff has been fueled by a “wave of patriotic buying,” with Chinese consumers becoming motivated to support local brands over foreign ones.

• In a rare move, Apple has begun cutting prices in China by as much as $180.

Huawei’s Comeback: China represents one of Apple’s key growth areas, with over 1.4 billion people, yet shopping at Apple has become politicized in China as the company sits in the middle of U.S.-China tensions.

• A target of U.S. sanctions in 2020, Huawei has restored its competitiveness in the premium smartphone segment, prompting one analyst to comment, “Huawei is making a comeback trying to win back the defectors to iPhone from a couple of years ago.”

• But weakness in China for Apple may not be a dealbreaker. Last quarter, Apple still grew revenues by 2.1% on stronger iPhone demand elsewhere.

Why it matters:

In a separate blow this week to Apple, European regulators delivered a nearly $2 billion antitrust fine for abusing its power over the Apple app store to the detriment of music streaming rivals like Spotify.

Regulators claim Apple restricted promotions of alternative and cheaper music subscription services outside its Apple Music app.

• It also allegedly banned developers of music streaming apps from giving instructions on how users could subscribe to these cheaper offers.

Big Tech Drama: Unsurprisingly, Apple is unhappy with the fine and regulators’ conclusions. In a fiery counter-response, Apple highlighted that Spotify would benefit the most from the ruling and is the “primary advocate for this decision.”

Apple went further, though, implying that European regulators favored local brands (Spotify is based in Sweden.)

• Adding, “Today, Spotify has a 56% share of Europe’s music streaming market — more than double their closest competitor’s — and pays Apple nothing for the services that have helped make them one of the most recognizable brands in the world.”
  

• That’s in “large part” thanks to Apple’s app store and technology that enables Spotify to “share their app with Apple users around the world.”

More drama: Adding to the tensions is a clever workaround. Whereas Epic Games and other app developers have famously pushed back against Apple’s app store monopoly, which charges developers 30% fees for in-app purchases, Spotify has found a novel solution — it doesn’t sell subscriptions in-app.

• Instead, Spotify directs users to its website to subscribe to music-streaming subscriptions.

Read more

More Headlines

☢️ Russia says it’s considering putting a nuclear power plant on the moon with China

🧾 The states with the highest and lowest tax rates

🇨🇳 Chinese officials set ambitious 5% target for economic growth

💰 Why sovereign borrowing could get more expensive 

🛜 Red Sea cables damaged, disrupting global internet traffic

😰 Facebook and Instagram endure major outage

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Quick Poll

Yesterday, we asked: Do you think passive investing hurts markets and the economy?

— On team “yes,” a reader commented, “It will eventually form a cycle, making it worthwhile for active investors, but we’re not there yet.”

— As for “no,” one reader stated, “Any type of investing that gets people investing at a younger age is a positive in my opinion.”

— Added another: “Wall Street complaining about Main Street investing shows they are having a hard time justifying their premium and are upset people are getting more intelligent by the year.”

See you next time!

That's it for today on We Study Markets!

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