NVDA's Pain is Mining's Gain

Morning Rundown

VBL

Jul 12, 2024

∙ Paid

Housekeeping: Good Morning.

Gold Revaluation is a process not an event.

Today:

Premium: AI
Commentary: CPI Recap

Equity Recap:

US equities retreated on Thursday, weighed down by tech shares after a weaker than expected inflation report raised the prospect of Fed rate cuts this year.

Premium / Markets: AI/ CPI Post Mortem

Tech giants and beyond are set to spend over $1tn on AI capex in coming years, with so far little to show for it. So, will this large spend ever pay off? MIT’s Daron Acemoglu and GS’ Jim Covello are skeptical, with Acemoglu seeing only limited US economic upside from AI over the next decade and Covello arguing that the technology isn’t designed to solve the complex problems that would justify the costs, which may not decline as many expect

Market Recap: NVDA's Pain is Mining's Gain

Gold and Silver rallied before CPI and after CPI
CPI came in soft, especially in the OER segment, which was largely predicted by real time data
The markets immediately assumed the Fed would be able to ease in September, and perhaps some feel it for July as well
The dollar softened, helped in no small part by Japan

Continues in Premium

Market News:

"The CPI, a broad measure of costs for goods and services, declined 0.1% from May, putting the 12-month rate at 3%, around its lowest level in more than three years. Excluding volatile food and energy costs, the so-called core CPI increased 0.1% monthly and 3.3% from a year ago. The annual increase for the core rate was the smallest since April 2021. A 3.8% slide in gasoline prices held back inflation for the month, offsetting 0.2% increases in both food prices and shelter." Source: CNBC

"Tesla is postponing its planned robotaxi unveiling to October to allow teams working on the project more time to build additional prototypes... Chief Executive Officer Elon Musk set the initial Aug. 8 date for the event months ago, and optimism about the spectacle has contributed to an 11-day streak of gains that added more than $257 billion to Tesla’s market capitalization. The stock closed 8.4% lower on Thursday, its largest drop since January." Source: Bloomberg

"Inflation-weary shoppers are finally cutting back on potato chips. For the past few years as prices soared, many consumers kept buying affordable treats like Doritos and Lay’s in lieu of bigger-ticket splurges such as restaurants, concerts or travel. But now, they are limiting their spending in all areas, said Jamie Caulfield, PepsiCo’s chief financial officer." Source: WSJ

"Generative AI has already shown a lot of promise in robots. Applications include natural language interactions, robot learning, no-code programming and even design. Google’s DeepMind Robotics team this week is showcasing another potential sweet spot between the two disciplines: navigation. In a paper titled “Mobility VLA: Multimodal Instruction Navigation with Long-Context VLMs and Topological Graphs,” the team demonstrates how it has implemented Google Gemini 1.5 Pro to teach a robot to respond to commands and navigate around an office." Source: TechCrunch

Geopolitics:

"Israeli warplanes breach the sound barrier over areas north of Beirut (capital of Lebanon)", according to Sky News Arabia
US President Biden said NATO confirms support for Ukraine and will not allow Russia to achieve victory.
NATO Secretary General Stoltenberg said Ukraine can count on NATO now and for the long haul, while he added that Chinese exercises with Belarusian forces are part of a pattern and confirms authoritarian regimes are aligning more.
German Chancellor Scholz said more needs to be done to ramp up air defences for Ukraine, while he added their defence industry needs to be capable of expanding production capacities swiftly.

Some headlines via NewSquawk or DataTrek