Morning Reads
- For Argentina, Dollarization May Work Better on YouTube Than in Reality
- South African Inflation Breakevens Tumble as Rates Seen on Hold
- Russian Agricultural Bank Files Lawsuit Against JP Morgan
- Bond Managers of $2.5 Trillion Make Case for Leaving Cash Behind
- Is the US Headed for a Recession? Look at What Richer Americans Do on Black Friday
- New ETF Tracks Developers of Obesity Drugs Amid Ozempic Hype
- The Great Disconnect: Why Voters Feel One Way About the Economy but Act Differently
- Higher Interest Rates Are Shattering Housing Dreams Around the World
- October Home Sales Likely Fell to New 13-Year Low
- Houses Too Expensive to Buy Underpin Lofty Rents
- China Property Stocks Surge After Beijing Picks 50 Firms to Fund
- US Is Seeking More than $4 Billion From Binance to End Case
- A New Front Is Opening Up in the US-China Conflict Over Chips
- How Microsoft’s Satya Nadella Kept the ‘Best Bromance in Tech’ Alive
- OpenAI in ‘Intense Discussions’ to Quell Potential Staff Mutiny
- The Long Shadow of Steve Jobs Looms Over the Turmoil at OpenAI
- India Closer to Agreement With Tesla to Import EVs, Set Up Plant
- GM’s Driverless Taxis Need to Slow Down
- Wyndham Rebuffs Latest Takeover Attempt From Choice Hotels
- How a Billionaire Banker Is Helping Elite US Colleges Recruit New Talent
- A Descendant of Freed Slaves, Financier Pursues Family’s $900 Million Oil Claim
- Soon You May Know Exactly Where Your Diamond Was Mined
Open Interest Changes
PREMIUM
Prepper
Speaking of the AI revolution in the wake of Sam Altman going to Microsoft, artificial intelligence giant Nvidia (NVDA) will gobble up attention today with its Q3 earnings report after the closing bell. The company is once again expected to smash third-quarter revenue expectations as it continues to benefit from broadening AI adoption across industries, though investors will focus on the sustainability of this growth due to expanding curbs on the sale of high-end chips to China and rising competition from rivals like AMD (AMD). Last week, Nvidia also announced its new H200 GPU, which allows for work on generative AI and large language models to be done even faster.
Quote: "When a stock is as much of a favorite of the crowd as Nvidia, many of the tools stock analysts use to ascertain value lose utility," SA analyst Christopher Robb writes in an earnings preview. "In the case of Nvidia, the huge premium is justified by the breakneck pace of the company's revenue and earnings growth. Similar to big wave surfing, the rules of investing in stocks with excessive valuation are different than normal investing."
Hitting a fresh all-time high yesterday at $504 per share, Nvidia (NVDA) has surged over 252% YTD, helping it become the first trillion-dollar chip firm and the most important stock of 2023. In past quarters, guidance from the AI leader has often exceeded even the grandest of estimates, so keep an eye on today's numbers, as well as the conference call featuring CEO Jensen Huang. To note, Nvidia's guidance has generally only looked to the coming quarter instead of an annual outlook.
AI revolution: Traders have been quick to flag other AI favorites, like Microsoft (MSFT), which just recorded a fresh all-time high following the hiring of OpenAI's top brass. In fact, Microsoft's market cap of $2.8T is now worth over $1T more than that of Google (GOOG, GOOGL), though both of them and the entire "Magnificent Seven" group have propped up the market this year. These seven stocks have soared an average of 70% YTD, compared to the average 6% advance for the other 493 stocks in the S&P 500. (28 comments)
Off course
Daniel Kan, co-founder and product chief at General Motors' (GM) self-driving unit Cruise, has resigned just a day after its CEO Kyle Vogt stepped down. The exits come less than a month after Cruise halted operations, issued recalls and halted production of its autonomous vehicles amid safety concerns. Cruise is under federal investigation because of a hit-and-run incident in San Francisco, after which California promptly suspended its licenses. GM CEO Mary Barra appeared to shrug off these setbacks, leaving many questions unanswered as to Cruise's future. GM already lost $732M on Cruise in Q3 and around $1.9B in the nine months ended Sept. 30. (3 comments)
Made in India
Looking to boost domestic manufacturing, India will provide subsidies to 27 tech firms, including Dell (DELL), HP (HPQ) and Lenovo (OTCPK:LNVGY), under a production-linked incentive scheme for IT hardware. These companies are expected to invest around $360M, with the value of IT hardware production estimated at $42B. The move is part of Prime Minister Narendra Modi's push to make India a global hi-tech manufacturing hub. Gartner has forecast that India's IT spending will grow 2.6% in 2023, despite global inflation and the weakening rupee. Earlier this month, India also authorized 110 companies, including Apple (AAPL) and HP, to import laptops, tablets and PCs.
Unregistered
The crackdown on the U.S. cryptocurrency market is nowhere near its end, with crypto exchange Kraken becoming the latest target. The SEC has charged the platform for allegedly commingling customer money with its own and operating as an unregistered securities exchange and broker, leading it to make hundreds of millions of dollars unlawfully since at least Sept. 2018. The charges are similar to the ones the SEC brought against Binance and Coinbase (COIN). Binance is also facing investigation by the CFTC and DOJ, with the latter wanting the exchange to fork over $4B in penalties to resolve its probe. Bitcoin (BTC-USD) still traded in the green on Monday, crossing the $37K mark. (17 comments)
Today's Markets
In Asia, Japan -0.1%. Hong Kong -0.3%. China flat. India +0.4%.
In Europe, at midday, London -0.5%. Paris -0.2%. Frankfurt +0.2%.
Futures at 7:00, Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -0.6% to $77.40. Gold +0.5% to $1,989.80. Bitcoin +0.1% to $37,188.
Ten-year Treasury Yield unchanged at 4.42%.
Today's Economic Calendar
8:30 Chicago Fed National Activity Index
10:00 Existing Home Sales
11:30 Results of $26B, 2-Year FRN Auction
2:00 PM FOMC Minutes
Companies reporting earnings today »
What else is happening...
China is still buying chips from U.S. and might be improving them.
Citigroup (C) eliminates more than 300 senior manager roles.
Senate panel subpoenas Live Nation (LYV) over ticket pricing.
UAW members ratify new contracts at GM, Ford (F), and Stellantis.
Texas sues Pfizer for alleged Medicaid fraud over ADHD meds.
U.S.-listed Argentinian stocks soar after Milei's presidential win.
White House and Biden join Threads (META) after Musk backlash.
McDonald's (MCD) buys Carlyle's minority stake in China business.
Zoom in charts: Enterprise revenue continues to grow, albeit slowly.
Top 10 value plays, according to Seeking Alpha's Quant Ratings.