DHUnplugged #703: Euphoric

DHUnplugged Podcast

Big Week – Big Earnings on Wednesday

Oil Unusually stable

Helicopter Accident – Another “fog” incident?

Meme stocks come back to earth

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Warm Up
- Big Week - Big Earnings on Wednesday
- Oil Unusually stable
- Helicopter Accident - Another "fog" incident?
- Meme stocks come back to earth
- We have an Osbourne Effect

Market Update
- 40,000 ! Get the party hats!
- ATH, ATH, ATH
- Commods - Copper and Gold (AND silver)
- VIX - lowest since 2019
- Someone better against Tesla (Big name)

Banks
- The Federal Reserve and two other U.S. regulators are moving toward a new plan that would significantly reduce a nearly 20% mandated increase in capital for the country's biggest banks following lobbying efforts by industry CEOs like JPMorgan Chase's Jamie Dimon, the Wall Street Journal reported over the weekend.
- Required increases in capital for banks like JPMorgan and Goldman Sachs meant to ensure they have sufficient buffers to absorb potential losses — would on average be about as much as originally floated, the Journal added.
- Top officials from all three agencies involved in the pending capital rules — the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency — are still discussing substantive and technical revisions and there is no guarantee that an agreement will be reached, the WSJ reported.

Goodbye?
- In a response to a question Monday about the bank's succession planning, Dimon indicated that his expected tenure is less than five more years
- That's a key change from Dimon's previous responses to succession questions, in which his standard answer had been that retirement was perpetually five years away.
- Stock dropped 4% on that conversation

No Direction - Grasping ....
- Snap Inc. Chief Executive Officer Evan Spiegel said he’s investing more aggressively in bringing artificial intelligence and machine learning to Snapchat to make it more interesting for its users, the next major shift after years spent overhauling its advertising business.
- “There was a recognition that we’d fallen behind the curve on the machine learning side, which, to some degree, was reflected in the business performance,” Spiegel said in an interview. “We needed to improve there and bring together some of our most senior machine learning folks to just talk about what it would look like for us to get to state of the art and really invest.”

Meanwhile
- VIX is sagging
- The CBOE Volatility Index, which measures the 30-day implied volatility of the S&P 500, closed Friday at the lowest level since November 2019 as the benchmark stock index traded in a tight range just below the all-time high.
- Aside from an April pop, the VIX has been muted for much of 2024 as shares climbed.

VIX Chart

Interesting
- Online home goods retailer Wayfair is opening its first namesake store, near Chicago, following a string of other digitally native companies that have turned to brick-and-mortar for growth.
- So they think the low cost failed execution is going to do better in the higher cost brick and mortar arena?
- The company says people need to still sit in and try furniture.... (WHAT?)

AI - Here we go
- OpenAI has disbanded its team focused on the long-term risks of artificial intelligence just one year after the company announced the group, a source familiar with the situation confirmed to CNBC on Friday.
- News of Sutskever's and Leike's departures, and the dissolution of the superalignment team, come days after OpenAI launched a new AI model and desktop version of ChatGPT, along with an updated user interface, the company's latest effort to expand the use of its popular chatbot.

NVDA Earnings Tomorrow
- Tech analysts are all excited that this is going to be another amazing quarter
- Stock pushing up from April lows on belief that the AI trade is still happening and gaining strength

More NVDA (BIG!)
- Amazon halted orders of key Nvidia (NVDA) chip because they want to wait for updated version, according to FT
--- Osbourne Effect?
---- The Osborne effect is a social phenomenon of customers canceling or deferring orders for the current, soon-to-be-obsolete product as an unexpected drawback of a company's announcing a future product prematurely. It is an example of cannibalization.
--- The site reports Nvidia will begin production of Blackwell in the second half of 2024 and enter the market in earnest in 2025 with the goal of shipping 40,000 units by next year
- This new report adds several details regarding Nvidia's launch plans, including that the flagship configuration will be a 72-chip cabinet that will reportedly sell for a whopping $3 million.
- Nvidia is expected to earn $30 billion from this one product alone through 2025.

MJ
- he U.S. Justice Department on Thursday unveiled a historic proposal to ease restrictions on marijuana, a rule that if enacted would also enable more research on its medicinal benefits.
- The proposal, first announced in April, would reclassify cannabis from a so-called schedule one drug to a schedule three. Schedule one drugs, such as heroin, are considered highly addictive with no medical benefits, while schedule three drugs are considered to have a moderate to low potential for physical and psychological dependence.
- "Additionally, no safety concerns were identified in the FDA’s review that would indicate that medical use of marijuana poses unacceptably high safety risks," the proposal says.
- Still not 100% done it appears

MEME
- Gamestop - back to ground level but...
- The initial move caused losses of $1 billion for short sellers - hopefully they reloaded
- AMC - back to reality as we know company has ongoing plan to sell into price spikes in open market

Crypto
- Something going on with ETH -
--- Approval or some other move by SEC was expected this week -
---- Delay or Approval of ETF would be good (ETH spiking 10% late afternoon Monday)
- SEC seems to be looking for a revised plan by ETF creators on ETH - (not bad news at all)

Big Short
- Big Short’ trader Danny Moses is still betting against Tesla, says core business is ‘falling apart’
- Big sale in China - heavy discounts now

US Steel BOD - Pressing Nippon Steel Offer
- Correcting the record...
- Letter from BOD: For all the reasons noted above, this is not only the best deal for U. S. Steel and its stockholders, but also for our employees, the communities in which we operate, our customers, U.S. national security and the American economy overall. We look forward to closing in the second half of this year and moving forward together with NSC as the “Best Steelmaker with World-Leading Capabilities.”
- Will this happen?

TRUMP Stock
- Trump Media & Technology Group, the parent company of Donald Trump's Truth Social platform, disclosed a net loss of $327.6 million in the first quarter of the year, with total revenue at $770,500, according to its earnings report, filed Monday with the Securities and Exchange Commission.
- TMTG CEO Devin Nunes said that the company is exploring "a wide array of initiatives and innovations to build out the Truth Social platform including potential mergers and acquisitions activities" in a statement on Monday. (Horseshit)

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