October 24, 2023

Nvidia to Challenge Intel With Arm-Based Processors

📰 News Organizations

  • Chevron to Buy Hess for $53 Billion. The U.S. energy company said buying Hess would upgrade and diversify its portfolio. It’s the second major oil tie-up this month following Exxon Mobil’s deal to buy Pioneer Natural Resources.

  • Bond Rout Drives 10-Year Treasury Yield to 5%. A deepening selloff in the U.S. bond market drove the yield on the 10-year U.S. Treasury note to 5% for the first time in 16 years, extending a rout that has rattled stocks, and lifted mortgage rates.

  • UAW Expands Strike as 6,800 Workers at Stellantis Walk Out. The UAW confirmed on Oct. 23 that roughly 6,800 union-represented members at the Sterling Heights Assembly Plant joined its Stand Up Strike, effectively halting production making RAM 1500 trucks.

  • Microsoft to Invest $3.2 Billion to Boost AI and Tech in Australia. Microsoft Corp. will invest AUD $5 billion ($3.2 billion) in Australia to expand its cloud computing and AI infrastructure over the next two years.

  • Apple To Spend $1 Billion Per Year To Catch Up. Apple is looking to use AI to improve Siri, Messages and Apple Music. The spending comes as the company plays catch-up to some competitors who have already debuted new AI products and features.

  • SpaceX Signs Deal to Launch Key European Satellites. SpaceX and the European Space Agency recently signed an agreement for two launches next year, each carrying two Galileo satellites as local rivals struggle to get rockets off the ground.

  • Nvidia and AMD Working on Arm-based PC Chips. Chips that use the Arm-based instruction set, like those for smartphones, often use significantly less power, which is critical for battery-powered devices.

🐦 Twitter

  • It feels like a mildly risk-off day. Stock futures are down, copper prices are touching the lowest levels in almost a year. And yet 10-year Treasury yields are about to cross the 5% threshold, a move that once again challenges the idea of the debt as a haven in times of weakness. Source.

  • Regional banks are facing renewed financing pressures as yields have risen in the last couple months. While btfp has been pretty flat, broader borrowings have been rising (likely fhlb). Notably different from small banks which have paid off their post SVB borrowings. Source.

  • S&P 500 Regional Bank Index is down by nearly 44% year/year—a threshold never reached during bull market that started in March 2009. Source.

  • 53k US home purchases were canceled in September, which equates to 16.3% of all homes under contract. That's the highest cancellation percentage since October 2022. Source.

  • Even if bond yields have topped (highly unlikely,) current rates are far too heavy a burden for debtors to bear. Yields must drop sharply to avert a crisis. Source.

  • Boosted by increasing demand for AI services, the GPU-as-a-Service market is forecast to expand at a 20.3% CAGR from $3.3B in 2023 to $12.2B in 2030. Source.

One of the best ways to build trust with a prospective investor: Clearly explain the way the economics of the proposed deal work, making explicit her incentives and your own, where they align, and where they don't.

Moses Kagan

📓 Online Publications

  • Stonepeak to Take Textainer Group Private. Textainer announced late Sunday night that it had entered into a definitive agreement under which investment firm Stonepeak would acquire the company. Textainer will go private at the completion of the acquisition.

  • Rental Rates Fell for 5th Straight Month. Rents for studio, 1-bedroom and 2-bedroom units fell 0.7 percent between August and September, according to Realtor.com. Fresh competition is fueling the rent decreases with completion of new apartment buildings.

  • Credit Card Delinquencies Rising Rapidly. Credit card delinquencies have been an interesting development. The second quarter credit card delinquency rate sat at 2.8%. The concerning aspect is how quickly the rate has almost doubled from 1.6% in 2021 to 2.8% in 2023.

  • Americans Got Wealthier. Real median net worth for U.S. households was up a stunning 37% from 2019-2022. This is just a massive increase in wealth considering the fact that 2022 was one of the worst years ever for a diversified portfolio of stocks and bonds.

🎧 Podcasts

  • Toyota Nears Mass Production of Solid-State Batteries. Industry experts call them a game-changer. And Toyota says it’s close to manufacturing them at the same rate as their existing batteries. Toyota is targeting 2027 or 2028 for mass production. Source(4:56)

  • ‘Start-up Nation’ Goes to War. Israel calls itself the ‘Start-up Nation’. But as it gears up for a possible ground offensive in Gaza, its tech sector faces an unprecedented test. Up to 15 percent of the industry’s workforce has been called up to fight in the war. Source(5:51)

  • Amazon Testing Humanoid Robots. The tech giant is testing Digit, a 2-legged robot carrying items and boxes. This aims to eliminate menial and mundane tasks, cut down costs, and streamline operations. Source(12:23)

  • Earnings for Week Ahead. Busy earnings week with Meta and Amazon in tech spotlight. Meanwhile, GM and Ford results during autoworkers strike may influence union negotiations. Reported profits could impact discussions on concessions for employees. Source(23:45)