Yiwen Lu8/23/24

Stocks soar after the Fed green-lights an easing cycle

Major indexes rose on Friday after Federal Reserve Chair Jay Powell said that it was time for a rate cut. Both S&P 500 and Nasdaq 100 gained 1.2%. Small caps took the lead in the market boom, with the Russell 2000 up 3.2%.

The US Dollar index was down 0.8% to 100.7, hitting the lowest point since July 2023.

The 10-year Treasury yield fell 6.5 basis points to 3.8%, slightly up from earlier in the day at 3.79%, which was close to the bond yield's 2024 low. The policy-sensitive two-year Treasury yield was down 10 basis points to 3.91%.

All S&P 500 sector ETFs rallied. Real estate was the best-performing sector, up 2%, followed by consumer discretionary, buoyed by Carnival’s 7.5% advance and Norwegian Cruise Line 7.8% gain.

Big tech stocks also climbed after Thursday's sell-off. In particular, Tesla jumped 4.6% and Nvidia surged 4.5%.

Intuit was the worst S&P 500 performer. Shares closed with a 6.8% loss, as the owner of Turbo Tax reported earnings that beat estimates but issued poor guidance.

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Tasha Matsumoto

Stocks bounce back after volatile trading session

The S&P 500 and Nasdaq-100 recovered from an afternoon dip, and the Russell 2000 notched another all time high.

Michael Jordan #23 dribbles towards the net circa the 1990's during a game.

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Matt Phillips10h

Diverse partnership’s $40 billion data center may the future of funding for AI

Another day, another multibillion-dollar data center deal.

The announced $40 billion buyout — including debt — of Texas-based Aligned Data Centers on Wednesday was the first for a consortium established last year by a diverse base of investors including giant money management firm BlackRock, Abu Dhabi-based technology investment fund MGX, and Microsoft.

Some analysts suggest the variety of investors in such a deal — including tech giants, sovereign investment funds and the private pools of capital controlled by entities like BlackRock — will be an increasingly common site, as the enormously expensive buildout of AI infrastructure continues over the coming years.

Analysts at Morgan Stanley recently estimated that there will be some $2.9 trillion of spending on data centers globally by 2028. Some $1.4 trillion of that will be covered by the cash flows produced by giant hyper scalers like Microsoft, leaving a need for some $1.5 trillion from other sources. The analysts wrote that their “broad takeaway was bullishness on the availability of those sources of capital.”

Nvidia, Microsoft, xAI and BlackRock part of $40 billion deal for Aligned Data Centers

Nvidia, Microsoft, xAI and BlackRock part of $40 billion deal for Aligned Data Centers

Some analysts suggest the variety of investors in such a deal — including tech giants, sovereign investment funds and the private pools of capital controlled by entities like BlackRock — will be an increasingly common site, as the enormously expensive buildout of AI infrastructure continues over the coming years.

Analysts at Morgan Stanley recently estimated that there will be some $2.9 trillion of spending on data centers globally by 2028. Some $1.4 trillion of that will be covered by the cash flows produced by giant hyper scalers like Microsoft, leaving a need for some $1.5 trillion from other sources. The analysts wrote that their “broad takeaway was bullishness on the availability of those sources of capital.”

markets

Rigetti Computing tanks amid souring retail sentiment, bearish options bets

Rigetti Computing is getting taken to the woodshed on Wednesday amid souring retail trader sentiment and options bets on near-term downside.

In particular, one post on Reddit’s wallstreetbets forum from user bespoketrancheop, which shows the Google Street view (circa March 2025) of Rigetti’s listed headquarters, is generating a lot of attention. It’s the most popular Rigetti-centric post on the subreddit in the past seven months.

Rigetti HQ — r/wallstreetbets via bespoketrancheop

Per our executive editor, it’s giving this:

Clinton meme — Source: imgflip

But as one commenter notes, this isn’t exactly new news: “People been posting this since it was $11,” with another pointing out that “making an assessment on a google street view is lazy dd [editor’s note: due diligence].”

For what it’s worth, Rigetti’s Quantum Fab manufacturing facility in Fremont looks a lot more like a place where next-gen technology is being developed and a lot less like the middle school one of my colleagues went to.

Of course, it’s impossible to single this out as <the> specific catalyst for the price action in Rigetti today. But since there’ve been dozens of days in the past couple months where quantum computing stocks went up on no news whatsoever, it stands to reason there are also going to be days when they go down for no (good) reason whatsoever.

More important, perhaps, is the flurry of major options bets positioning for downside in the quantum computing company this week. Put options with a strike price of $50 that expire this Friday are in demand. That contract had open interest of under 7,000 heading into today but has already seen volumes of more than 30,000, suggesting fresh wagers made on a pullback in the formerly high-flying stock.

markets

AMD soars as HSBC hikes price target to a Street high of $310

Shares of Advanced Micro Devices are soaring after HSBC analyst Frank Lee strapped his price target for the chip designer to a rocket ship, hiking it to $310 from $185. The new price target ties that of Arete Research’s Brett Simpson for the highest on Wall Street, per data from Bloomberg.

The recently announced deal with OpenAI, which was followed by news that AMD will deploy 50,000 AI chips in Oracle’s data centers, catalyzed a massive wave of Wall Street love for AMD.

But that’s just nowhere near enough compared to what the stock deserves, per Lee, who sees AMD’s MI450 series of AI chips as being sufficiently competitive to Nvidia’s offerings. Through 2030, he sees the revenue opportunity of the OpenAI deal to be $80 billion.

“We believe the Street has underestimated the AI GPU revenue with our estimates 50% and 45% above consensus for 2026e and 2027e, respectively,” he wrote. “We believe there could be further upside driven by pricing premium as well as additional AI GPU volume.”

HSBC on AMD revisions — Source; HSBC

Morgan Stanley accounting analyst on what needs to be disclosed on AI circularity

Analyst: A lot more disclosure needed on these “circular” AI deals

The “circularity” issue keeps swirling.

Matt Phillips12h

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