DHUnplugged #720: GoldyLox
59:45 Share

Finally Fed makes a move (they will not be done jabbering though)

Storms heading to Florida and Gulf Coast – Natural gas prices jump

COVID Shot Stocks – “fun” while it lasted

Confidence is waning…..

CHINA!

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Warm-Up

• Finally Fed makes a move (they will not be done jabbering though)
• Storms heading to Florida and Gulf Coast - Natural gas prices jump
• COVID Stocks - "fun" while it lasted
• Confidence is waning.....
• CHINA! Bazooka Time!

Markets

• All-Time Highs - Same saying Goldilocks conditions
• Seasonality favors the bulls starting next quarter
• Uranium starting to move as people warming up to nuclear energy again
• Trump Stock on the move

Need to Pick a new CTP

Exile

• A leading economist in China has vanished following critical comments about President Xi Jinping‘s economic policies.
• What Happened: Zhu Hengpeng, deputy director at the Chinese Academy of Social Sciences (CASS), was detained after allegedly criticizing Xi in a private WeChat group. Zhu’s remarks reportedly included veiled criticisms of Xi’s leadership and comments on China’s struggling economy, reported The Wall Street Journal on Tuesday.
• The investigation into Zhu coincides with the Chinese Communist Party’s intensified efforts to suppress negative commentary about the country’s economic health. Under Xi, dissent has been increasingly punished, with critics facing imprisonment or exile.
• AH would be have cement shoes if this happened in the USA

**On The Other Hand - CHINA PROP IT UP **- China said it will allow institutional investors to tap central bank financing for stock purchases and is weighing plans for a market stabilization fund, sparking the biggest rally since 2020 for the nation’s beaten-down equities.

• The People’s Bank of China will set up a swap facility allowing securities firms, funds and insurance companies to tap liquidity from the central bank to purchase equities
• The CSI 300 Index, a benchmark of onshore Chinese stocks, surged 4.3% to cap its best day since July 2020. In Hong Kong, a gauge of Chinese shares was up more than 5% intraday.
• MCHI up 8%, FXI up 8.5%, YINN (3X) up 25%

M&A FOLLOW UP

• Buyout firms Vista Equity Partners and Blackstone are in advanced talks to acquire Smartsheet, in a deal that could value the collaboration-software maker at close to $8 billion, people familiar with the matter said on Monday.
• NEWS: Collaboration software maker Smartsheet on Tuesday announced it would be acquired by Blackstone and Vista Equity Partners in an all-cash deal which valued the company at $8.4 billion.

THE FED

• Cuts rates by 0.50% -- Seems to have been looking to appease markets
• Initial reaction was blah... Unwinding of positions put on right before the decision
• Next day stocks soared
• “The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the Federal Reserve statement said.
• Last time Fed cut rates was COVID days , time before that was Financial Crisis of 2008
• The federal funds rate is now a range between 4.75%-5%

Meanwhile

• Consumer confidence in September suffers largest decline since August 2021
• The key takeaway from the report is that consumers' views of the current labor market situation continued to soften and became more pessimistic about future labor market conditions -- a sentiment that could weigh on consumer spending activity. ---- The Present Situation Index dropped to 124.3 from an upwardly revised 134.6 (from 134.4) in August. ------ The Expectations Index declined to 81.7 from an upwardly revised 86.3 (from 82.5) in August. -------Average 12-month inflation expectations increased to 5.2% from an upwardly revised 5.0% (from 4.9%) in August.

Confidence)

Boeing Playing Hardball

• Boeing’s CFO Brian West earlier this week said the company would freeze hiring and raises to cut costs, and would let “non-essential contractors” go temporarily.
• The cost-cutting measures come after more than 30,000 Boeing machinists turned down a contract and voted to strike.
• Boeing provided a BEST AND FINAL Offer on Monday
• Boeing had offered a 25% raise and the union endorsed the tentative contract - but they wanted more like 40%

Another Casualty

• Tupperware Brands filed for bankruptcy protection in Delaware late on Tuesday, succumbing to mounting losses due to poor demand for its once popular colorful food storage containers.
• No more Tupperware parties? (Popularized in the 1950s)
• The company has $812 million in debt, much of which was purchased by distressed debt investors at a deep discount in July, according to court filings. Those new lenders had sought to use their debt position to seize Tupperware assets including its intellectual property such as its brand, pushing to the company to seek bankruptcy protection, Tupperware said.
• Is there really any intellectual property that is worth anything there with all of the other brands these days?

Big $$$ Coming In

• BlackRock and Microsoft plan to launch a more than $30 billion fund to invest in artificial intelligence infrastructure to build data centers and energy projects, the companies said on Tuesday.
• The investment vehicle, known as Global AI Infrastructure Investment Partnership, aims to help enhance AI supply chains and energy sourcing, BlackRock and Microsoft said.
• The partnership will mobilize up to $100 billion in total investment potential when including debt financing, the companies said.

More Power

• They're planning to restart the Three Mile Island nuclear power plant to power Microsoft's cloud and AI data centers
• Nuclear (something we talked about months ago that would be needed for Datacenters/AI)
• Constellation Energy (CEG) up 125% YTD gets nice boost on this news
• • Restating - Utilities are not only going up as rate have been going down...... -- -HOWEVER - After refurbishing it and obtaining the necessary federal and state approvals, Constellation hopes to have TMI-Unit 1 operating by 2028
• • • Planning on adding approximately 835 megawatts of carbon-free energy to the grid

Fedex Earning

• Abysmal - comes in way low and guidance is not good at all
• Stock drops 14%
• Trading close to no change for 2024

M&A

• Weird - all of a sudden lot happening at Intel
• Qualcomm approached Intel about a takeover in recent days, according to a person familiar with the matter. --- Qualcomm for Intel - does that make sense? -- The deal would likely face intense regulatory scrutiny, particularly from antitrust regulators, given the size and market influence of both companies.
• Intel down 50% YTD
• Company getting all sorts of deals from CHIPS Act and now --- Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel Corp., people familiar with the matter said, providing the chipmaker with a vote of confidence in its turnaround strategy and an alternative to a potential takeover by larger rival Qualcomm Inc.

Drug Companies in the Crosshairs

• The Federal Trade Commission on Friday sued three large U.S. health companies that negotiate insulin prices, arguing the drug middlemen boost their profits while “artificially” inflating costs for patients.
• The suit targets the three biggest so-called pharmacy benefit managers, UnitedHealth Group’s Optum Rx, CVS Health’s Caremark and Cigna’s Express Scripts, and their affiliated group purchasing organizations.
• The FTC may also recommend suing insulin manufacturers Eli Lilly, Sanofi and Novo Nordisk in the future.
• The PBM are going to be in trouble as these are seen as the reason for many of the massive drug price issues. (Middleman created to help with prices ended uop just making out like bandits for themselves - that will be the rationale and political take)

DJT Stock on the Move

• The wrong way
• New Post IPO/SPAC LOW as selling window opens (Selling restrictions lifted)
• Trump, whose stake in Trump Media is now worth roughly $1.4 billion, said on Sept. 13 he did not plan to sell his shares, turning the focus to other major stakeholders who could cash out.

New Highs for META

• Stock seen as a major winner from AI -
• Not because of what it can do for you - what is can do for the advertisers of META
• Up nearly 4 fold from the low in 2022

Moderna

• Stock in downtrend since August 2021
• Stock at sameprice as it was back in October 2020 after peaking close to $48- per share (now $64)
• What happened to the breakthroughs?
• Good lesson here...

MPOX Update

• Nearly 30,000 suspected mpox cases have been reported in Africa so far this year, most of them in Democratic Republic of Congo where tests have run out, the World Health Organization said on Monday.
• Stocks related GOVX, SIGA, EBS (Stocks still stuck in nowhereville)

Home Prices

• Hit an ATH - Case Shiller
• Pace of growth slowing

A Few Thousand Days

• Open AI CEO Sam Altman says the world could be just "a few thousand days" from creating an artificial "superintelligence."
• "This may turn out to be the most consequential fact about all of history so far. It is possible that we will have superintelligence in a few thousand days (!); it may take longer, but I’m confident we’ll get there," Altman wrote.

DOJ on Visa

• The U.S. Justice Department on Tuesday sued Visa , the world’s biggest payments network, saying it propped up an illegal monopoly over debit payments by imposing “exclusionary” agreements on partners and smothering upstart firms.
• More than 60% of debit transactions in the U.S. run over Visa rails, helping it charge more than $7 billion annually in processing fees, according to the DOJ complaint.

In Closing - NICE!

• CEO Jensen Huang just wrapped up the sale of six million shares of the chip maker, completing a trading plan he adopted earlier in the year—and grossing more than $700 million.

 

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