Three Things (11/22)

Goodbye, Gensler

Crypto crossroads … Gary Gensler, chair of the U.S. Securities and Exchange Commission, will step down on January 20, coinciding with the President-elect’s inauguration. The move comes after Trump vowed to remove Gensler on “day one” of his presidency, citing opposition to Gensler’s strict regulatory approach to cryptocurrency. 

Rumors suggest Trump may appoint Teresa Goody Guillen, a blockchain lawyer and former SEC insider, to succeed Gensler. Known for her expertise in cryptocurrency and blockchain protocols, Goody Guillen could usher in a more crypto-friendly regulatory era. This speculation aligns with Trump’s campaign promises and the cryptocurrency community’s substantial financial backing of crypto-friendly candidates (reportedly $130 million).

Under Gensler, the SEC took a cautious stance toward digital assets, likening the crypto market to the “Wild West” and emphasizing investor protection. He spearheaded enforcement actions against crypto giants Coinbase and Binance and expressed concerns about fraud and market manipulation.

Despite criticism from crypto advocates who argued his approach stifled innovation, Gensler also oversaw landmark achievements, including launching spot cryptocurrency ETFs, such as BlackRock’s $42.9 billion iShares Bitcoin Trust.

With Bitcoin nearing $100,000 and speculation of Goody Guillen’s appointment, the SEC’s direction could signal a significant shift in the regulatory landscape for cryptocurrencies.

Snowflake heats up

Data has a day  … Snowflake (SNOW) just pulled off its best day ever. Shares of the data analytics company soared 30% on Thursday after it bumped up its fiscal 2025 revenue forecast to $3.43 billion, an increase from its previous $3.36 billion estimate. Investors didn’t just like the numbers—they loved them. The stock is now up $12 billion in market value, making this its biggest single-day gain since Snowflake’s 2020 IPO.

So, what’s behind the rally? For starters, Snowflake is all about cloud-based data storage and analytics, helping businesses manage, analyze, and visualize their data. It has over 10,600 customers, including big names like Capital One (COF) and Warner Bros. Discovery (WBD), which rely on Snowflake to make sense of their massive datasets.

Snowflake’s net revenue retention rate, which signals customer loyalty, was 128% for the quarter. Even if it didn’t add any new logos, Snowflake still would have grown 28%.

The real headline, though, is its new partnership with Anthropic, a major player in artificial intelligence. Snowflake is integrating Anthropic’s AI tools into its platform, giving its customers some serious new capabilities—like automating data insights and generating sleek visualizations. For Snowflake, this partnership isn’t just about staying competitive; it’s a step toward becoming a key player in the AI space, a top priority for CEO Sridhar Ramaswamy.

Snowflake’s momentum spilled over into the broader tech market, lifting data-focused peers like MongoDB (MDB) and Elastic (ESTC) by 15% and 5%, respectively.

Home sales up, jobless claims down

Macro for a minute … The U.S. economy offered mixed but promising signals this week, with a resurgence in home sales and steady declines in unemployment claims.

Sales of previously owned homes rose 3.4% in October compared to September, reaching an annualized rate of 3.96 million units. This marks the first year-over-year increase in over three years, with sales climbing 2.9% from October 2023. A temporary drop in mortgage rates during August and September likely fueled this surge. However, rates have since rebounded, sitting at 7.05% for a 30-year fixed mortgage.

Despite improved inventory—up 19.1% from a year ago—the market remains tight, keeping prices high. The median sale price climbed 4% year-over-year to $407,200, driven by limited supply and stronger activity in higher-end properties. First-time buyers remain a small share of the market, constrained by rising costs and steep mortgage rates.

Meanwhile, unemployment claims continued their downward trajectory. Weekly applications for benefits dropped by 6,000 to 213,000, nearing seven-month lows. Continuing claims, however, edged up by 36,000 to 1.91 million, their highest level since 2021. This suggests some workers are struggling to find new jobs, even as layoffs remain low.

Both indicators reflect a U.S. economy navigating challenges but maintaining resilience.

Disclosures:

As of writing, AAPL and SQ are holdings in Titan's Flagship strategy, ESTC is a holding in Titan's Opportunities strategy, and IBIT is a holding in Titan's Crypto strategy. As of 10/31/2024, Anthropic is a 4.22% holding in the ARK Venture Fund.

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