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QQQ Churns in Late Hours on Apple, Amazon Earnings

This article from Bloomberg may be of interest to subscribers. Here is a section:

In late trading, a $207 billion exchange-traded fund tracking the Nasdaq 100 (QQQ) whipsawed after Amazon.com Inc.’s bullish revenue forecast and Apple Inc.’s disappointing iPhone sales. Longer-dated Treasuries are now set for their worst week of 2023 amid signs of unexpected economic strength and concern over a widening budget deficit.

A report Thursday underscored resilient demand for workers, while separate numbers showed labor productivity climbed, helping to offset rising labor costs. Those figures preceded the government’s employment data — forecast to show the US added 200,000 jobs in July. While that would be the weakest print since the end of 2020, it’s still a strong advance historically.



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Air Pockets, Free Falls, and More Cowbell

Thanks to a subscriber for this report from John Hussman may be of interest. Here is a section:

There are very few conditions in which we have any specific expectations for near-term market action. The exceptions are when the market is strenuously overextended in a “trap door” situation combining rich valuations with unfavorable internals, or when the market is strenuously compressed following a material improvement in valuations.

Over the past four decades, I’ve developed scores of interesting “syndromes” and relationships, many that I’ve discussed in these market comments. A subset of these capture features of “overextension” and “compression” that occur at major market extremes.

The chart below shows one such syndrome that emerged in mid-April as the S&P 500 advanced above 4400, and again last week, which I consider part of the same overextended advance. The criteria are intended to capture a certain “relentlessness” of speculation that often precedes abrupt market losses. This particular syndrome is among several that I monitor to identify speculative “blowoffs.”

In this case, “relentlessness” is defined by periods when the S&P 500 is at least 4.5% above its 50-day average, with a relative strength index (RSI) above 70 – indicating a preponderance of advancing days relative to declining days in recent weeks, a 14-day rate of change (ROC) greater than 4% in the S&P 500, and at least a mildly bullish tilt in advisory sentiment, based on Investors Intelligence data. Periods like this look briefly parabolic, as investors increasingly buy every dip, in fear of missing out.



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Is ChatGPT Getting 'Dumber'? Usage Drops As Users Complain

This article from Search Engine Journal may be of interest. Here is a section:

ChatGPT, the viral conversational AI chatbot created by OpenAI, appears to be losing some of its initial luster and appeal.

After rocketing to immense popularity following its launch late last year, recent data indicates usage and interest in ChatGPT may be declining.

Some longtime users have complained on social media and developer forums that the AI seems to be producing lower-quality responses than just a few weeks ago.

They describe the bot as “lazier,” “dumber,” and prone to more mistakes or nonsensical answers. However, OpenAI denies intentionally downgrading ChatGPT, tweeting that “we make each new version smarter.”

The company speculates users encountering more flaws reflects increased usage uncovering limitations.



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Coinbase Jumps to Highest Since August on Bitcoin ETF Momentum

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Coinbase Global Inc. gains as much as 13% on Tuesday, trading at its highest intraday level since August and extending a rally driven by optimism over the potential US approval of a Bitcoin ETF. 

Shares of the biggest US crypto exchange traded at $88.27 a share as of 2:12 p.m. in New York. The stock has more than doubled so far this year amid a broad bounce for cryptocurrency linked stocks despite regulatory challenges from a lawsuit by the US Securities and Exchange Commission. 

On Tuesday, CBOE filed for amendments for five Bitcoin ETF applications, confirming that it reached an agreement with Coinbase on surveillance sharing agreements, a move to address concerns by the SEC over market manipulation. The filings previously had said that the exchange was “expecting” to enter into the agreement with Coinbase. 



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Generative AI: Hype, Or Truly Transformative?

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Sarah Guo: Misjudging the timetable of large technology shifts is a common pitfall in investing. I am all-in on a fundamental bet that this shift will drive substantial value creation, but this is a decade+ transition. In the meantime, areas of mispricing have certainly surfaced. In the private markets, a large cohort of investors is trying to figure out how to gain exposure to this technology, or at least how to think about the risk profile around it. And while they're developing a deeper understanding of the space, the tendency has been to anchor to investments with more obvious heuristics. For example, many investors seem to be assessing startups based on whether the people leading them are former researchers at OpenAI or DeepMind, because that’s a much easier question to answer than whether a particular product or research thesis will be successful. Similarly, because databases are a known and well-understood category of software, vector databases are receiving substantial investor attention.

That said, I am already seeing some investors becoming more skeptical because most enterprises haven’t yet adopted generative AI, but this seems short-sighted. Remember that ChatGPT only launched in November; the average enterprise planning and execution cycle tends to be longer than six months. So, investors will need to be patient. As with the internet, mobile, and cloud, some winners emerged immediately, but others only emerged a decade later; discovering the use cases and building great software takes time and entrepreneurial ingenuity. You wouldn’t have wanted to stop your internet investing with Napster.



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Why Meta Is Launching Twitter Rival Threads

 This article from Bloomberg may be of interest. Here is a section:

2. Why is Meta launching a Twitter alternative?

Meta is clear about wanting to poach Twitter’s users. Meta Chief Product Officer Chris Cox described Threads as “our response to Twitter” at a companywide meeting in June reported by The Verge. “We’ve been hearing from creators and public figures who are interested in having a platform that is sanely run,” he said. That’s a pointed reference to how Musk has been running the company since he purchased it for $44 billion in October 2022. 



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Bitcoin Bulls Are Testing The Year's High With Liquidity Light

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“Historically liquidity is definitely lower around holidays and combined with a relatively large increase in leverage recently, prices will be more susceptible to sharp movements,” said Kyle Doane, a trader at Arca. “The market is still leaning bullish and overall sentiment continues to improve.”

BlackRock refiled paperwork with the US Securities and Exchange Commission on Monday through Nasdaq to add new details to its proposal for an ETF. 

A spot Bitcoin ETF has long been seen as the holy grail for the crypto industry, as a way to reach a broader swath of consumers, but the SEC has repeatedly rejected prior filings. Bitcoin reached almost $69,000 in late 2021.



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Apple Attains Historic $3 Trillion Milestone as Tech Stocks Boom

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Apple Inc. made Wall Street history as the first company with a market value over $3 trillion, the latest sign of big tech’s seemingly unstoppable dominance in equity markets.

The iPhone maker gained 2.3% on Friday, adding to a rally that’s added more than $983 billion to its size this year and leaving it roughly a half-trillion dollars above the next-largest company. Apple’s ascent to the milestone helped the Nasdaq 100 Index to its best-ever first half ever, driving a broader stock rally that underscored the dominance of tech megacaps



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The Giant Grid Bottleneck Threatening Climate Goals

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2. What will that entail?
It means building grids dense enough to absorb these renewable sources while still achieving the stable frequency that’s vital for the smooth functioning of electrical equipment and electronics. It will also require more high-voltage lines to carry surpluses from regions where the sun is shining and the wind blowing to meet demand elsewhere. Right now, the lack of long-distance transmission means a lot of recently installed renewable capacity is going to waste. BNEF estimates it will cost around $21.4 trillion to adapt grids to a net zero world and require 152 million kilometers of new cables — enough to stretch from Earth to the Sun if laid end to end. That implies a surge in consumption of copper — more than the mining industry can currently supply. But the biggest obstacle to grid development right now isn’t sourcing the materials or finding the money to pay for it all. 

3. What’s the hold-up?  
Local communities often oppose new wind farms, solar arrays and power lines and projects can face years of consultations involving multiple stakeholders. State regulators impose detailed technical studies and other bureaucratic hurdles. There are almost 1,000 gigawatts of solar projects stuck in the interconnection queue across the US and Europe, close to four times the amount of new solar capacity installed around the world in 2022. If all the wind and solar projects stuck in limbo were completed and connected to the grid, they’d add up to more than the present electricity generation capacity of the US. 



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Nvidia Leads Chip Selloff After Report on US Tightening AI Curbs

This article from Bloomberg may be of interest to subscribers. Here is a section: 

Nvidia this year designed less-capable chips that fall under thresholds that require a license from the Commerce Department before export to China or other countries of concern.

Washington is now weighing action as soon as next month to expand the curbs to include those lower-powered semiconductors, the Wall Street Journal reported, citing anonymous sources.

Such a move underscores the Biden administration’s determination to contain China’s technological rise and could stoke tensions between the two countries. The US is increasingly concerned about Beijing’s technological ambitions, including around the use of AI in military and scientific advances that could tilt the geopolitical balance. 

While that’s likely to hurt Nvidia’s and AMD’s business with the world’s No. 2 economy, the two chipmakers remain at the forefront of a surge in AI development that’s driving investment from the US to Europe and China. From Microsoft Corp. to Baidu Inc. and ChatGPT developer OpenAI, companies around the world are buying their products to train the next generation of artificial intelligence services.



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