August 28, 2023

📰 News Organizations

• Rite Aid Prepares Bankruptcy That Would Halt Opioid Lawsuits. The chapter 11 filing would cover Rite Aid’s more than $3.3 billion debt load and pending legal allegations that it oversupplied prescription painkillers.
  

• Databricks Is in Talks to Raise Funds at a $43 Billion Valuation. The talks are preliminary with T. Rowe Price and could fall apart. If the round is successful, Databricks’ valuation would be considerably higher than the $38 billion it reached two years ago in funding.

• Nvidia Supply Concerns Ease, but Long-Term Challenges Remain. Analysts have raised questions about the supply chain and the long-term strength of the current boom, while tech executives have said they might cut back on the purchases of AI chips if they aren’t translating into new business.

• BRICS Dropping US Dollar, Working on New Reserve Currency. The BRICS economic alliance plans to abandon the U.S. dollar in trade settlements and develop a new reserve currency while promoting the use of local currencies.

• Cyber Startup Wiz Is Weighing Potential Bid for SentinelOne. The firm was studying the potential acquisition of SentinelOne, which had a market valuation of nearly $4.9 billion. Wiz noted that it could complement Wiz’s offering and help expand its platform.

• Goldman Sachs Sees Long-Term AI Trade Reaching Far Beyond Nvidia. Using 2024 consensus earnings estimates as a baseline, the team found that the median stock in their index (ticker GSTHLTAI) could see its earnings per share some 72% higher via AI-related productivity increases.

🐦 Twitter

• Median cost to buy a house hits a new record of $2,748/mo, up a MASSIVE 90% since 2020. In other words, buying a house today costs nearly $33,000 per year. This is 46% of the median PRE-TAX household income in the US. Source.
  

• Gold prices in yen terms just closed at record prices today. In a world burdened by historical levels of debt, it's important to remember that over time, all paper currencies should lose value against hard assets. JPY is just an early mover. Source.
  

• Mortgage applications just plummeted to the lowest level since 1995. Down 50% from pandemic highs. Not good. Sellers will need to reduce the price to bring buyers back in. Source.
  

• The average homeowners insurance premium in Florida has more than tripled since 2019, moving from $1,988 to $6,000. Homebuilders are saying these increases are starting to impact sales. Source.
  

• Eye on bonds: For the long end, the term premium has rallied from -91 bps to -37 bps in just a few weeks. If the premium reverts to its historical tendency to be positive, it could mean a 5-handle for long bonds. Source.

📓 Online Publications

• AMD Battles NVIDIA With Two New Graphics Cards. AMD announced two new graphics cards on Friday, both of which are aimed squarely at gaming at 1440p resolutions. The RX 7700 XT and RX 7800 XT will battle NVIDIA's RX 40 series graphics cards.

• Amazon Is Spending $100 Million to Launch $1 Million Worth of Satellites. Amazon's Project Kuiper could change the trajectory of the space industry, simply by virtue of the fact that Amazon is buying up a large percentage of the total rocket-launching capacity of the whole world.

• Shortage Dynamics Fuels Luxury Housing Market. In the luxury market, buyers aren’t impacted as much by higher mortgage rates because they either pay cash or make a larger down payment, keeping luxury inventory lower, with homes going under contract within a few days.

• Consumer Unease Over Inflation Rekindled In August Following Rally. Consumer sentiment dipped to 69.5 in August following months of recovery, a downward shift that underscores the complex web of rapidly changing expectations, according to data released Friday.

• DigitalOcean Seeks New CEO as Growth Cools. CEO Yancey Spruill will step down once a successor has been found. There was no specific reason given for the change beyond the fact that now is the right time for the next phase of leadership.

🎧 Podcasts

• BRICS Expansion Is a Big Win For China Amid Sanctions. Brics is trying to create a bigger rival to the G7. And South Africa’s president said this is just the first phase of their expansion plans. Brics is also looking into how to reduce the reliance on the US dollar. Source(4:44)
  

• Moderna Stock Rose 6% Over Renewed Covid Concerns. As Covid cases increase and hospitalizations rise, investors are expecting higher demand for booster shots in the fall, leading to a surge in Moderna's shares and those of similar vaccine makers. Source(19:01)
  

• Nvidia's AI Trajectory Poised for Microsoft-like Evolution. Just as Microsoft took 16 years to gradually build its success in the cloud computing space and shape it, analysts suggest that Nvidia's long-term commitment to AI could yield comparable success in reshaping the AI landscape. Source(1:10:31)