Wednesday 22 May 2024

Stocks, Nvidia Bubble Or Bust? EU Passes AI Laws.

Baltic Dry Index. 1829 -18     Brent Crude  82.28

Spot Gold 2414             US 2 Year Yield 4.82 unch.

It is easy to be conspicuously 'compassionate' if others are being forced to pay the cost.

Murray Rothbard.

In the US stock casinos, it’s all about the Nvidia AI bubble. As goes Nvidia so goes America, replacing GM in the old auto adage.

Later today we get Nvidia’s latest results. Boom or bust big time for US stocks.

 

Asia-Pacific markets trade mixed as investors parse slew of Japanese data

UPDATED WED, MAY 22 2024 12:47 AM EDT

Asia-Pacific markets traded mixed Wednesday.

In Australia, the S&P/ASX 200 rose 0.08%. Japan’s Nikkei 225 fell 0.62% lower, while the Kospi inched up 0.23%.

There was a marginal improvement in business sentiment, with the Reuters Tankan non-manufacturing index coming in at +26. Japan is slated to release its April trade data, as well as machinery orders for the month of March.

New Zealand’s S&P/NZ50 inched slightly above the flatline after the Reserve Bank of New Zealand held official cash rate unchanged at 5.5% for the seventh consecutive time.

Hong Kong’s Hang Seng index rose 0.18%. The CSI 300 was up 0.067%.

Overnight in the U.S., all three indexes closed in positive territory, with the S&P 500 and the Nasdaq Composite closing at new records as investors looked toward AI darling Nvidia’s earnings report.

The Nasdaq Composite rose 0.22% to 16,832.62. The S&P 500 added 0.25% to 5,321.41. The Dow Jones Industrial Average closed 0.17% higher at 39,872.99.

Asia-Pacific markets: Japan trade, RBNZ decision (cnbc.com)

 

Stock futures are little changed after S&P 500 closes at a record, Nvidia earnings loom: Live updates

UPDATED WED, MAY 22 2024 12:20 AM EDT

U.S. stock futures were little changed early Wednesday as investors looked ahead to the widely-anticipated release of Nvidia’s latest earnings report.

Dow Jones Industrial Average futures inched higher by 3 points. Futures tied to the S&P 500 and Nasdaq 100 hovered near the flatline.

In extended trading, Urban Outfitters gained 5% after the clothing retailer posted beats on the top and bottom line in its latest quarter. Homebuilder Toll Brothers inched higher by 1% after surpassing analysts’ estimates and raising its full-year delivery guidance.

The moves followed the S&P 500 and Nasdaq Composite’s new record-setting closes on Tuesday afternoon. The broader market index added 0.25%, while the tech-heavy Nasdaq gained 0.22%. The Dow Jones Industrial Average added 0.17%.

Nvidia was at the forefront of investors’ minds, as they looked ahead to the semiconductor giant’s quarterly report on Wednesday afternoon. The stock has rallied nearly 93% so far in 2024 and added 0.6% during Tuesday’s trading session.

The market rally has the potential to broaden beyond tech, but it will be important that the earnings season wrap up on a strong note, according to Charles Schwab’s chief investment strategist Liz Ann Sonders.

More

Stock market today: Live updates (cnbc.com)

 

Nvidia is talk of the town at AI events leading into this week’s earnings

At the start of last week, OpenAI’s technology chief personally thanked Nvidia CEO Jensen Huang for “bringing us the most advanced” chips needed to run the demo for a presentation the company delivered on its latest artificial intelligence models.

A day later, at Google’s annual developer conference, Alphabet CEO Sundar Pichai highlighted his company’s “longstanding partnership with Nvidia,” and noted that Google Cloud will be using the chipmaker’s Blackwell graphics processing units (GPUs) in early 2025.

And this week, Microsoft, which provides servers to OpenAI, will announce new AI advancements and features that were developed on the company’s massive clusters of Nvidia GPUs. The company is hosting its Build conference in Redmond, Washington.

Heading into its quarterly earnings report on Wednesday, Nvidia finds itself at the center of the action in technology, a position that’s become increasingly commonplace for the 31-year-old company, whose market cap has ballooned past $2 trillion this year.

Nvidia is expected to report year-over-year revenue growth in excess of 200% for a third straight quarter, with analysts projecting a fiscal first-quarter bump-up of 243% to $24.6 billion, according to LSEG. More than $21 billion of that is expected to come from Nvidia’s data center business, which includes all the advanced processors the company is selling to Google, Microsoft, MetaAmazon, OpenAI and others.

Nvidia is squeezing so much profit out of its AI suite of products that net income is expected to be up more than fivefold from a year earlier to $13.9 billion.

The stock has soared 91% this year after more than tripling in 2023.

More

Nvidia is talk of town at AI events before fiscal Q1 2025 earnings (cnbc.com)

In other news.

'Big Short' Investor, Who Predicted 2008 Housing Crash, Buys 440K Units of Physical Gold Fund

May 29, 2024

Legendary investor Micheal Burry's bet against the housing market in the 2008 financial crash netted him $700 million—the saga was chronicled in the award-winning film "Big Short."

Since the global financial crisis, Burry's notable investment decisions also showcased strategic foresight. He invested in water assets, predicting future scarcity, and GameStop before it became a meme stock.

He has also wagered against Elon Musk's Tesla, Cathie Wood's Ark Innovation ETF, and Blackrock's iShares Semiconductor ETF, which has Nvidia as one of its top holdings.

In the latest 13-F filing released last week, the metalhead's Scion Asset Management revealed making several adjustments to multiple trade positions, but what stood out was buying over 440,000 units of the Sprott Physical Gold Trust valued at $7.6 million.

Blurry's new position in physical gold via the trust is the firm's top buy in Q1 2024 and currently accounts for 7.4% of his portfolio.

Burry's latest investment in the gold trust returned 16% in value in the first three months of 2024, outperforming the 11% gains showcased by the S&P 500. This trust now holds the fifth-largest allocation in Scion's portfolio.

Simply put, it is a closed-end fund that offers investors exposure to gold without the hassles of handling and storing physical gold.

Burry made several changes to his portfolio last quarter. He increased his holdings in JD.com to $9.9 million and Alibaba to $9 million while offloading stakes in tech firms like Oracle, Google, and Amazon.

However, he increased his stake by $4.4 million in China's tech firm Baidu to 4.1% of the total portfolio while adding $5.1 million to First Solar in Q1. The asset management firm's total investments increased to $103.5 million from $94.6 million over the quarter.

Burry's notable bet on bullion as a buffer against market volatility and inflation aligns with American billionaire hedge fund manager John Paulson, who leads New York-based Paulson & Co. In 2021, he projected sticky inflation and aggressive rate hikes by the US Federal Reserve would compel investors to dump cash for gold and similar assets with limited supply.

Since then, gold prices have jumped to record levels above $2,400 per troy ounce in recent weeks from $1,800. Both investors remain bullish, believing that gold will benefit in the foreseeable future.

More

'Big Short' Investor, Who Predicted 2008 Housing Crash, Buys 440K Units of Physical Gold Fund (msn.com)

Europe sets benchmark for rest of the world with landmark AI laws

By Foo Yun Chee and Tassilo Hummel 

BRUSSELS, May 21 (Reuters) - Europe's landmark rules on artificial intelligence will enter into force next month after EU countries endorsed on Tuesday a political deal reached in December, setting a potential global benchmark for a technology used in business and everyday life.

The European Union's AI Act is more comprehensive than the United States' light-touch voluntary compliance approach while China's approach aims to maintain social stability and state control.

The vote by EU countries came two months after EU lawmakers backed the AI legislation drafted by the European Commission in 2021 after making a number of key changes.

Concerns about AI contributing to misinformation, fake news and copyrighted material have intensified globally in recent months amid the growing popularity of generative AI systems such as Microsoft-backed (MSFT.O)b OpenAI's ChatGPT, and Google's (GOOGL.O) o chatbot Gemini.

"This landmark law, the first of its kind in the world, addresses a global technological challenge that also creates opportunities for our societies and economies," Belgian digitisation minister Mathieu Michel said in a statement.

"With the AI Act, Europe emphasizes the importance of trust, transparency and accountability when dealing with new technologies while at the same time ensuring this fast-changing technology can flourish and boost European innovation," he said.

The AI Act imposes strict transparency obligations on high-risk AI systems while such requirements for general-purpose AI models will be lighter.

It restricts governments' use of real-time biometric surveillance in public spaces to cases of certain crimes, prevention of terrorist attacks and searches for people suspected of the most serious crimes.

The new legislation will have an impact beyond the 27-country bloc, said Patrick van Eecke at law firm Cooley.

"The Act will have global reach. Companies outside the EU who use EU customer data in their AI platforms will need to comply. Other countries and regions are likely to use the AI Act as a blueprint, just as they did with the GDPR," he said, referring to EU privacy rules.

While the new legislation will apply in 2026, bans on the use of artificial intelligence in social scoring, predictive policing and untargeted scraping of facial images from the internet or CCTV footage will kick in in six months once the new regulation enters into force.

Obligations for general purpose AI models will apply after 12 months and rules for AI systems embedded into regulated products in 36 months.

Fines for violations range from 7.5 million euros ($8.2 million) or 1.5% of turnover to 35 million euros or 7% of global turnover depending on the type of violations.

Europe sets benchmark for rest of the world with landmark AI laws | Reuters

Global Inflation/Stagflation/Recession Watch.

Given our Magic Money Tree central banksters and our spendthrift politicians, inflation now needs an entire section of its own.

Grocery price inflation slows to lowest level since October 2021

May 21, 2024

Grocery price inflation has slowed to its lowest level since October 2021 – but consumers are showing no sign of ending their cost-of-living crisis behaviour, figures suggest.

Supermarket prices are 2.4% higher than a year ago, slowing for the 15th month in a row from April’s 3.2%, according to analysts Kantar.

Grocery inflation is now just 0.8 percentage points above the 10-year average of 1.6% between 2012 and 2021, just before prices began to climb.

However, cheaper supermarket own-label lines are proving resilient, and are still growing faster than brands, making up more than half (52%) of total spending, Kantar said.

Sales of premium own label ranges continue to increase too, up by 9.9% compared with a year ago.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “Grocery price inflation is gradually returning to what we would consider more normal levels.

“Typically, an inflation rate of around 3% is when we start to see marked changes in consumers’ behaviour, with shoppers trading down to cheaper items when the rate goes above this line and vice versa when the rate drops.

“However, after nearly two-and-a-half years of rapidly rising prices, it could take a bit longer for shoppers to unwind the habits they have learnt to help them manage the cost of living crisis.”

Figures show shoppers made the most of the early May bank holiday weekend to dust off the barbecue, with burger sales climbing by 13% and beer and wine sales up by 9% and 21% respectively compared with the week before.

Ocado was again the fastest growing grocer over the 12 weeks to May 12, with sales up by 12.4% – well ahead of the total online market’s 5.4% uplift.

Lidl reached a new record-high market share of 8.1%, fuelled in part by its bakery counters, as well as its loyalty scheme.

Britain’s biggest grocer Tesco now takes 27.6% of the market, its 5.6% growth in sales matched by Sainsbury’s, which now claims 15.1%.

Grocery price inflation slows to lowest level since October 2021 (msn.com)

Covid-19 Corner

This section will continue until it becomes unneeded.

A UK NHS blood scandal 1970-2000. No similarity to Covid 19 vaccines 2021-2024 then. Approx. 20 minutes.

Confirmed horrifying scandal

Confirmed horrifying scandal (youtube.com)

Technology Update.

With events happening fast in the development of solar power and graphene, among other things, I’ve added this section. Updates as they get reported.

New method may facilitate the use of graphene nanoribbons in nanoelectronics

May 20, 2024

An international collaborative study that features researchers from Tel Aviv University (TAU), presented a new method for growing ultra-long and ultra-narrow strips of graphene (a derivative of graphite), which exhibit semiconducting properties that can be harnessed by the nanoelectronics industry. The researchers believe that the development may have many potential technological applications, including advanced switching devices, spintronic devices, and in the future, even quantum computing architectures.

The study was conducted under the leadership of an international research team that included Prof. Michael Urbakh and Prof. Oded Hod from TAU's School of Chemistry, as well as scientists from China, South Korea, and Japan. The study was published in the journal Nature.

Prof. Urbakh and Prof. Hod explain that graphene is actually a single layer of graphite made of carbon atoms and built similar to the shape of a beehive. Graphene is very suitable for technological uses.

Apart from its extraordinary mechanical strength, additional properties have been discovered in recent years regarding certain structures made of a small number of twisted (laterally rotated with respect to each other) graphene layers. These properties include superconductivity, spontaneous electric polarization, controlled heat conduction, and structural superlubricity—a state in which materials demonstrate negligible friction and wear.

One of the limitations for the use of graphene in the electronics industry is that it is a semi-metal, namely that charge carriers can move freely in it, but their density is very low. Hence, graphene cannot be used either as a conducting metal or as a semiconductor used by the electronic chip industry.

However, if long and thin strips of graphene (termed graphene nanoribbons) are cut out of a wide graphene sheet, the quantum charge carriers become confined within the narrow dimension, which makes them semi-conducting and enables their use in quantum switching devices. As of today, there are a number of barriers to using graphene nanoribbons in devices, among them is the challenge of reproducibly growing narrow and long sheets that are isolated from the environment.

In this new study, the researchers were able to develop a method to catalytically grow narrow, long, and reproducible graphene nanoribbons directly within insulating hexagonal boron-nitride stacks, as well as demonstrate peak performance in quantum switching devices based on the newly-grown ribbons. The unique growth mechanism was revealed using advanced molecular dynamics simulation tools that were developed and implemented by the Israeli teams.

---- The researchers see the development as a scientific and technological breakthrough in the field of nanomaterials, one which is expected to open the door to a wide range of studies that will lead to their utilization in the nanoelectronics industry.

Prof. Urbakh and Prof. Hod summarize, "The importance of this new development is that for the first time, it is now possible to fabricate carbon-based nanoelectronic switching devices directly within an isolating matrix. These devices will likely have many technological applications, including electronic and spintronic systems, and even quantum computing devices."

New method may facilitate the use of graphene nanoribbons in nanoelectronics (msn.com)

Next, our latest new section, the world global debt clock. Nations debts to GDP compared.    

World Debt Clocks (usdebtclock.org)

In short, the early receivers of the new money in this market chain of events gain at the expense of those who receive the money toward the end of the chain, and still worse losers are the people (e.g., those on fixed incomes such as annuities, interest, or pensions) who never receive the new money.

Murray Rothbard.

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