- MarketMovers Daily
- June 29, 2023
June 29, 2023
Nvidia Shares Fall Amid Reports of Stricter US Chip Curbs
📰 News Organizations
President Biden Expects to Avoid Impending Recession. Despite economists' predictions of an upcoming recession, President Joe Biden remains hopeful and believes the US will steer clear of an economic downturn. Citing a robust labor market* and progress in managing inflation, the President reassures the country's resilience.
Nvidia Shares Fall Amid Reports of Stricter US Chip Curbs for China. Following reports of potential chip-export restrictions by the US, Nvidia's stock tumbled 4.6% in premarket trading, while AMD also saw a 3.7% decline. Both companies, leaders in AI chip development essential for generative models like ChatGPT, face uncertainty amidst tightening regulations.*
Google Engages in Productive Discussions with EU on A.I. Regulation. Google's head of cloud, Thomas Kurian, reveals that the company is engaged in "productive conversations" with EU regulators to establish artificial intelligence regulations. Google aims to address concerns surrounding AI by developing tools that address key worries raised by the bloc.
Costco Implements Stricter Measures Against Membership Card Sharing. In response to an increase in abuse following the expansion of self-checkout services, Costco is intensifying its crackdown on shoppers using others' membership cards. The wholesale retailer now requires photo ID verification even during self-checkout to strengthen enforcement and deter unauthorized card usage.
BlackRock Sees AI as a Potential 'Mega Force,' Joins the Trend. BlackRock, the world's largest asset manager, joins the AI frenzy by expressing a bullish outlook* on the technology. Citing the remarkable performance of the Nasdaq 100 index driven by AI-powered advancements, the company identifies semiconductor makers and companies with vast data or automation potential as prime beneficiaries.
Samsung Plans to Produce World's Most Advanced Mobile Chips by 2025. Samsung Electronics reveals its roadmap to expand chip manufacturing, including the production of cutting-edge chips. Starting with the 2-nanometer process for mobile applications in 2025, Samsung aims to catch up with leading manufacturer TSMC, eventually venturing into high-performance computing and automotive sectors.
General Mills Reports Disappointing Sales as Retailers Trim Inventories. General Mills, known for popular brands like Cheerios and Bisquick, experiences lackluster sales due to weakening volumes and retailers reducing their inventories.* Higher prices implemented to offset rising costs have not been sufficient to counteract these challenges.
Powell Says More ‘Restriction’ Is Coming. Federal Reserve Chairman Jerome Powell adopts a firm stance on inflation, expressing his expectation of multiple interest rate increases in the future, possibly at an accelerated rate. Powell attributes this need to address inflation to the robust labor market, implying the possibility of two additional quarter-point increases assuming a per-meeting approach.
The US Money Supply increased in May for the first time since last July, ending a record streak of 9 consecutive monthly declines. Still down 4% year-over-year but perhaps this marks a change in trend. Source.
The price inflation was primarily from the sharper-than-normal increase in the broad money supply. Even as energy and supply chains ceased being acute culprits, policymakers now focus on wage increases being the problem (which are just lagging inflation and trying to keep up). Source.
Over $200 billion from the U.S. government's COVID-19 relief programs were likely stolen, a federal watchdog said on Tuesday, adding that the U.S. Small Business Administration (SBA) had weakened its controls in a rush to disburse the funds. Source.
Key to watch shorter-term trend in U.S. home prices ... S&P CoreLogic Case-Shiller Index is still down in year/year terms, but 3-month annualized % change has picked back up and climbed into positive territory. Source.
The next big hurdle for markets: corporate earnings, particularly from big tech. Long-only investors are "starting to have some fatigue in terms of tech buying...you need to deliver results to justify your performance on a year-to-date basis.” Source.
📓 Online Publications
Cisco Unveils New AI Chips to Revolutionize AI Training Needs. Cisco introduces its flagship silicon chips that can connect up to 32,000 GPUs, catering to the demanding requirements of large-scale AI training. Leading cloud giants are currently testing the highly anticipated Cisco Silicon One semiconductors.
New Home Sales Surge to a Record Annual Rate in May. According to the U.S. Census Bureau and the Department of Housing and Urban Development, new single-family home sales in May 2023 reached an impressive seasonally adjusted annual rate of 763,000, marking a 12.2% increase from April and a remarkable 20.0% rise compared to May 2022.
U.S. Home Prices Experience First Annual Decline in Over a Decade. In April, home prices in the United States recorded their first year-over-year decline in 11 years due to higher mortgage rates, resulting in increased costs for buyers. The S&P CoreLogic Case-Shiller National Home Price Index indicated a 0.2% decrease in April compared to the previous month's 0.7% annual growth rate.
Delta Stock Is Up 43% in 3 Months, and the Rally Could Continue. Delta Air Lines shares have risen 43% in the past three months, following two and a half years of stagnation. Strong demand and falling fuel prices are supporting a rapid profit recovery. The Motley Fool thinks Delta stock still looks very cheap at just 6.5 times forward earnings.
US Supreme Court Affirms State Courts' Authority Over Election Rules. The US Supreme Court came out with a huge ruling on the way elections are run. The high court said that state courts should have the authority to review state election laws the way they do now. The lawsuit was brought by Republicans to a predominantly conservative court. Source(1:08)
Japan Steps Into Chip Supply Chain With $6.4bn JSR Deal. Semiconductors have become one of the hottest products on the planet. And the US and China are trying to one-up each other in semiconductor production. Japan finds itself stuck in the middle of this chip war. But it sees an opportunity. A Japanese state-backed fund this week agreed to buy one of Japan’s leading semiconductor equipment makers for $6.4bn. The company is called JSR. Source(5:00)
Global Shift: Supply Chain Redesign and Green Energy Drive. Policymakers worldwide have unanimously prioritized the need to redesign supply chains away from China due to national security concerns, while also emphasizing the importance of investing in the green energy revolution. This shift in priorities has led to a capex-driven cycle, with commodities, including metals, being recognized as the fundamental assets necessary for achieving both objectives. Source(12:33)
Walgreens Boot Alliance’s Disappointing 3rd Quarter. The pandemic tailwinds have worn off for this company. Walgreens' third-quarter report was seen as a miss on several levels. Earnings per share was reported as $0.14, down 59% year over year, with the healthcare company citing lower COVID-19 vaccine and testing volumes as the culprit. Source(0:33)