Retail sales in the US fell in Jan. Consumers took a breather after the strong holiday spend season. The drop was the largest in about 1 yr. The weather was cold. They realized how much debt they had. So, bond yields fell—with investors betting on a more dovish Fed.
Shares of TSMC reached an all-time high last night after MS raised its price target on Nvidia given AI demand. TSMC is the world’s largest producer of advanced processors, manufacturing chips for co’s like Nvidia. Large language models like ChatGPT require a lot of GPUs to train, and chips have to be very powerful.. giving Nvidia and its key suppliers an advantage. It’s now the 12th largest company in the world.
OpenAI is developing a web search product…like Google, per The Information. Some folks wonder about cashflow as a business model for OpenAI, per the FT. Apple is adding AI to its new phone. Cisco is laying off people. We learned Nvidia invested in Arm, SoundHound and Recursion Pharma—a biotech co.
OK, on the one hand it is good to see folks like The Elders, Richard Branson, and Oppenheimer’s grandson urge action against the escalating dangers of the climate crisis, pandemics, nuclear weapons and ungoverned AI. At the same time, it’s a tad hard to take folks like Branson seriously because, well, Virgin Airlines, Virgin Galactic, Necker Island which is not easy to get to (via a gas guzzling boat or helicopter, after a flight or two), and the list goes on. Today, $4.1 trillion of client wealth State Street just pulled out of the world’s biggest investor group focused on tackling climate change. JPM also noted that it was leaving the group.
Regulators told about 2 dozen banks in the US that they’re over their skis, with some banks taking on commercial real estate loans worth >3x their total capital. In particular, they’re looking for ones that grew super fast over the past few years, including Valley Natl Bancorp, WaFd and Axos Finl. This is not going to end well.
The head of MicroStrategy famously bought a bunch of bitcoin that tanked. It was a tech company that became a bitcoin company by investing cash in the digital currency. Now, he’s looking at naysayers from the winners seat, with a position worth an estimated $10bn. He forecasted that inflation would surge, and his stash would be worth a lot.
Traders are making longshot bets on China, per Bloomberg. They’re buying call options on US listed ETFs that track Chinese equities.
Japan is in one (FT) after an annualized 0.4% fourth-quarter contraction. So is the UK (FT). Now folks are hoping for the curve to turn.
Bloomberg makes the case that Japanese demand for foreign equities is hurting its own currency, the yen.