Performance Gap Widens Between Bitcoin and EthereumMarket Talk

1345 ET - The movements of bitcoin and ethereum--two of the largest cryptocurrencies by market capitalization--have diverged in recent months. Since the start of the year, bitcoin is virtually flat, while ethereum has tumbled nearly 48%, according to data from CoinMarketCap. This difference in performance has brought the spread between bitcoin and ethereum prices to the largest since before the pandemic, and reveals the change in market perception around the roles of these tokens. That's partially because of ethereum's mechanisms which are eliciting higher regulatory scrutiny and therefore lower fund-investor interest, says Quasar Elizundia of Pepperstone in a note. "Without a comparable institutional catalyst or greater regulatory clarity, Ethereum may continue to lag," he says. Ethereum is down 2% over the past 24 hours, while bitcoin is down 0.4%. ([email protected])1248 ET - Alphabet's core search segment faces an array of pressures likely to drag on growth in the long term, Melius Research analysts say in a note. Beyond slowing paid click growth, ad sales are likely to fall as users focus on Google's AI summaries over clicking links, the analysts say. That's especially true if OpenAI were to launch an ad platform targeted to ChatGPT's massive user base, which is more than double that of Gemini's, according to the analysts. Such developments would weigh on cost-per-click growth, the main driver of overall revenue in search last quarter, the analysts say. Wall Street has yet to price in such risks to search, according to Melius. ([email protected])1203 ET - Ford Motor is incorporating more electric-vehicle technology in lieu of 'flex-fuel' vehicles, which use motor fuel blended with ethanol. Fuel pumps across the Corn Belt have been offering blends of gasoline with ethanol, up to 85% ethanol blended in gas. For corn growers, flex-fuels and usage of ethanol in general have been a sizable consumer of U.S. corn in recent years. "Ford has moved away from a proven technology in favor of electric vehicles-despite the limited practicality and infrastructure available for EVs in rural areas," says the letter, authored by a coalition of corn growers across Corn Belt states in the Midwest. The removal of a flex-fuel options from the company's F-series line is sparking the most ire. Most-active CBOT corn is down 0.3% today. ([email protected])1154 ET - Despite beating Wall Street's expectations on both the top and bottom lines, Alphabet's 1Q filing contained several warning signs that show growing pressure on its core search segment, Melius Research analysts said in a research note. While management said monetization of AI search lined up with that of traditional search, that trend likely won't hold up in the long-term as paid clicks decelerated to just 2% growth last quarter from 5% a year prior, the analysts said. That slowing growth shows a tangible impact from the launch of AI summaries, the analysts said. "With the rise of AI and youth habits changing the game, a 2% click growth rate can go to something like -2% in a heartbeat," pressuring the company's search segment, they said. ([email protected])1144 ET - Business aviation momentum seem to be bucking the downward trend, says CIBC's Kevin Chiang. In a report, the analyst cites Aviation Week data that suggest that the in-service fleet of business jets and turboprops is up 3% year-over-year in March and up 5% versus March of 2023. Looking at business jet utilization rates, Chiang says it was 5% higher year-over-year for medium jets, and up 3% for large jets. For smaller jets, it remained flat. "While the industry is navigating through growing concerns over an economic slowdown and rising trade tensions, business aviation trends in 1Q/25 remained healthy," he says. ([email protected])1123 ET - Mexican low-cost airline Volaris reports a slightly bigger-than-expected $51 million 1Q net loss and suspends its full-year margin guidance citing macroeconomic uncertainty. The results look "marginally negative, but unsurprisingly so," analysts at Citi Research say in a note. North American political and economic uncertainty includes the risk of foreign reluctance to visit the U.S., and the carrier is still dealing with engine-related aircraft groundings, they say, but the drop in the shares in recent weeks "would already seem to reflect much of this risk." Volaris shares are down 9.9% on the Mexican stock exchange. ([email protected])1119 ET - Merck KGaA's acquisition of SpringWorks Therapeutics for $47 per share, or $3.9 billion in total, carried an underwhelming price tag to say the least, Evercore ISI analysts say in a research note. The analysts expected an agreement to price shares in the $60s, which would have still been highly attractive for the buyer, they said. The final deal price net of cash represents just two times the company's consensus peak sales, the analysts said, adding they can't recall such a low multiple for a company not in distress. "Hopefully this transaction is not a broader indictment on the state of biotech M&A amidst a difficult backdrop," the analysts say. ([email protected])1103 ET - The Dallas Fed's monthly survey of Texas manufacturers sustains a recent trend--decent indications for the present-day economy, but dark feelings about what comes next. The production index was close to flat month-over-month at 5.1, indicating a slight expansion. But the new orders index sank into a significant contraction, falling 20 points to -20. The index of general business activity fell by 20 points to -35.8, the lowest reading since May 2020. Indexes for expected production and general activity 6 months from now both fell, although the future-production index stayed positive. "Due to tariffs, we do not know what to expect," a machinery manufacturer reports. "Tariffs may drive us out of business," another manufacturer tells the survey. ([email protected]; @mattgrossman)1015 ET - Peloton has improved its fundamentals to the point it should be able to support a gradual recovery of its equity, Truist analysts say in a research note. The fitness-equipment maker has taken several steps in recent years to limit operating expenses, which should help the company deliver on its profitability targets this year, the analysts say. From there, new CEO Peter Stern can work to return Peloton to top-line growth by increasing focus on new products and services, as well as the reach of the platform. "The August earnings call (for F4Q25) is likely to be the opportunity when mgmt will guide to FY26, which we believe should point to an inflection in revenue growth," they write. Truist upgrades Peloton to buy from hold and maintains its price target of $11. Peloton rises 6% to $6.69. ([email protected])1004 ET - On Holding is among the best positioned brands to navigate the current tariff environment, Citi analysts say. The Swiss shoe brand, which sells On Running sneakers, can benefit from being based outside the U.S., as there could be backlash against American brands due to trade and international tensions, the analysts say. On has a smaller market share at 2% compared to Nike's 34% or Adidas' 13%, giving it more leeway to grow. About 90% of its sourcing comes from Vietnam, where the analysts are estimating for a 10% tariff rate, but competitors have similarly large outsourced supply so headwinds would hit rivals fairly equally, analysts expect. Citi upgrades On Holding to buy from neutral. On Holding rises 3%. ([email protected])0949 ET - With markets caught in an uncertain whirl of policy news, Strategas analysts see five potential developments that would be likely to give U.S. stocks more upward momentum from here. The announcement of a trade deal with a major partner could hearten investors. Fed rate cuts could start in June. Congress could inch closer to preserving Trump's 2017 tax cuts. When the rubber meets the road, companies could prove reluctant to cut workers or delay capital plans. Finally, a much discussed move to ease banks' capital requirements for holding Treasurys could soften yields and boost riskier assets as well. Strategas sees U.S. stocks growing earnings by 4% this year, yet acknowledges nearly coin-toss odds of a recession. ([email protected]; @mattgrossman)0945 ET - Crude futures are little changed at the start of the week with the market focusing on OPEC's production plans and watching U.S.-Iranian nuclear talks that could add supply if agreement is reached and sanctions eased. "On the positive side, China continues to be hungry for global oil as their biggest refineries are processing the most oil in over a year," BOK Financial's Dennis Kissler says in a note. WTI is up 0.1% at $63.07 a barrel, and Brent is up 0.1% at $66.92 a barrel. ([email protected])