Anti-Clickbait News Summaries for October 19, 2024
US stocks hit record highs as strong earnings drive six-week winning streak
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Analysts anticipate strong corporate earnings reports next week
Analysts are optimistic about upcoming corporate earnings reports, with many companies expected to exceed expectations. So far, 79% of S&P 500 companies reporting have surprised positively on earnings, and 64% on revenue.
Seagate Technology has seen a significant increase in earnings estimates, rising about 54% in the past six months. The company is set to report earnings on Tuesday, with analysts predicting a potential 19% upside for its stock.
Health care companies HCA Healthcare and Universal Health Services have also experienced positive sentiment. HCA's earnings estimates have risen by 11%, while Universal Health's have increased by 20%. Both companies are expected to report earnings soon, with strong stock performance this year.
SMIC advances chip production amid U.S.-China tech rivalry
Semiconductor Manufacturing International Corp. (SMIC) is advancing its chip production in Shanghai, creating chips with features thinner than a sheet of paper. This development places SMIC at the center of the U.S.-China tech rivalry, as the U.S. seeks to limit China's access to advanced chip technology.
Despite U.S. restrictions, SMIC is working on a new AI chip for Huawei, the Ascend 910C, expected to launch this year. While it cannot match the sophistication of U.S. chips from companies like Nvidia, it represents a step forward for China's AI capabilities.
China has invested heavily in its chip industry, with SMIC operating numerous factories and planning more expansions. However, experts suggest that SMIC still lags behind global leaders and faces challenges due to ongoing U.S. export controls.
Ares Capital remains undervalued as Federal Reserve shifts interest rate strategy
Ares Capital, a leading business development company, has benefited from recent Federal Reserve interest rate hikes due to its floating-rate portfolio. The company remains well-positioned as the Fed shifts towards a more dovish stance.
Despite the changing interest rate environment, Ares Capital is considered undervalued. This contrasts with previous expectations, as the company had thrived during the Fed's rate increases.
Investors are closely watching Ares Capital's performance amid these developments, as it continues to navigate the evolving economic landscape.
Experts warn Trump's mass deportation plans could cost billions and impact economy
Former President Donald Trump has renewed his commitment to mass deportation of undocumented immigrants if reelected. His advisers propose a large-scale operation involving military support, but experts warn that such plans would be complex and costly, potentially exceeding $960 billion over a decade.
During his presidency, Trump deported 1.5 million people, far fewer than his initial promises. Experts highlight logistical challenges, including lengthy immigration court processes and the need for significant increases in detention facilities and personnel, which would require substantial funding from Congress.
The economic impact of mass deportation could be severe, affecting millions of U.S. citizens with undocumented parents and the broader workforce. Undocumented immigrants contribute approximately $96.7 billion in taxes annually, and their removal could lead to job losses for U.S.-born workers and hinder economic growth.
Source: https://edition.cnn.com/2024/10/19/politics/trump-mass-deportation-cost-cec/index.html
Pro-Trump PAC funded by Musk faces outreach challenges in key states
A political action committee funded by Elon Musk to support Donald Trump's campaign is facing challenges in swing states like Wisconsin and Nevada. The group, America PAC, is struggling to meet its goal of contacting 450,000 voters before the November 5 election.
Canvassers have reported missing daily targets, and some have allegedly inflated their contact numbers. Musk's aide, Chris Young, is auditing the situation in Nevada, where issues with canvasser reliability have been noted.
Despite Musk's $75 million funding, America PAC's outreach efforts have been disorganized. The group is now offering higher pay to attract more canvassers, as many workers have found the compensation inadequate for the demands of the job.
Source: https://www.cnbc.com/2024/10/19/pro-trump-group-funded-by-musk-struggles-with-outreach-targets.html
Judy Faulkner plans to donate $7.7 billion through family foundation Roots & Wings
Judy Faulkner, founder of Epic Systems, plans to give away her $7.7 billion fortune through her family foundation, Roots & Wings. Led by her daughter, the foundation aims to grant around $100 million annually to nonprofits focused on children's health and education.
Roots & Wings has already distributed $200 million to 320 organizations since its establishment in 2019. The foundation emphasizes trust-based philanthropy, allowing nonprofits to use funds flexibly without strict restrictions, contrasting with traditional grant-making practices.
Faulkner's approach to philanthropy is methodical, similar to her business style. The foundation plans to increase its annual giving steadily, with a goal of reaching $100 million per year within five years.
Meta Platforms to report third-quarter earnings with focus on AI investments
Meta Platforms will report its third-quarter earnings on October 30, focusing on its artificial intelligence (AI) developments. Investors are particularly interested in the company's capital expenditures, which have increased significantly, reflecting its investment in AI infrastructure.
Meta's spending forecast for 2024 has risen from $30-35 billion to $37-40 billion. This spending is crucial as it impacts the company's earnings per share, which have driven a 534% stock surge since October 2022.
The company is developing its Llama AI models, with plans for Llama 4 requiring ten times the computing capacity of its predecessor. While this investment aims to enhance user engagement and ad revenue, it may take time to yield financial returns.
BlackRock CEO shifts stance on Bitcoin, sees potential for significant growth
Larry Fink, CEO of BlackRock, has shifted from being a Bitcoin skeptic to a strong advocate. BlackRock recently launched its iShares Bitcoin Trust, which has quickly become the largest Bitcoin exchange-traded fund, managing over $24 billion.
In a recent earnings call, Fink compared Bitcoin's potential growth to that of mortgage-backed securities in the 1980s. He believes Bitcoin could reach a market cap of nearly $550,000 per coin, representing a 720% increase from its current price.
BlackRock's new report highlights Bitcoin's unique qualities, suggesting it could serve as a valuable asset in uncertain economic times. This marks a significant change in perception, positioning Bitcoin as a mainstream investment opportunity.
Canadian Natural Resources acquires Chevron assets to expand operations
Canadian Natural Resources (CNQ), a major Canadian oil and gas company, has announced the acquisition of assets from Chevron in Canada. This move is part of CNQ's strategy to expand its operations.
With a market capitalization exceeding $75 billion, CNQ continues to strengthen its position in the energy sector. The acquisition marks a significant development in the company's growth plans.
This acquisition differs from CNQ's previous focus, as it now aims to enhance its asset base through strategic purchases.
SEC approves options listing for spot bitcoin ETFs on NYSE
The U.S. Securities and Exchange Commission (SEC) has approved 11 exchange-traded funds (ETFs) to list options tied to spot bitcoin prices on the New York Stock Exchange. This follows the SEC's earlier approval of bitcoin ETFs in January.
Among the approved funds are the Fidelity Wise Origin Bitcoin Fund, ARK21Shares Bitcoin ETF, and Invesco Galaxy Bitcoin ETF. The new options will provide institutional investors with a way to hedge their bitcoin exposure.
Last month, the SEC also approved options for BlackRock's bitcoin ETF on the Nasdaq. This marks a significant expansion in the trading options available for bitcoin-related investments.
Federal Reserve cuts interest rates while maintaining quantitative tightening policy
The Federal Reserve cut its policy interest rate by 50 basis points in mid-September 2024. This marks a shift from previous rates, aimed at supporting economic activity.
Despite the rate cut, the Fed will continue its policy of quantitative tightening, though at a slower pace. This approach contrasts with earlier, more aggressive tightening measures.
The Fed's decision reflects ongoing adjustments to economic conditions, balancing interest rates and liquidity in the market.
Ken Griffin reduces Nvidia stake and boosts investment in Super Micro Computer
Billionaire Ken Griffin has significantly reduced Citadel's investment in Nvidia, selling 9.2 million shares, a 79% decrease. He has shifted focus to Super Micro Computer, increasing his stake by 96% with the purchase of 98,752 shares.
Nvidia remains a leader in AI chips, holding a 90% market share. Despite Griffin's sale, Nvidia's stock has become slightly cheaper, with earnings expected to grow at 37% annually over the next three years.
Super Micro Computer, which specializes in AI servers, reported a 143% revenue increase but faced a decline in gross margin. The company is under investigation for accounting issues, which may have influenced Griffin's investment decisions.
Billionaires invest in BlackRock's Bitcoin ETF as experts predict massive growth potential
Billionaires are investing in BlackRock's iShares Bitcoin Trust, an exchange-traded fund that tracks Bitcoin's spot price. Notable investors include Ken Griffin, David Shaw, and Israel Englander, who have made small but significant purchases in 2024.
Experts predict Bitcoin's price could rise dramatically, with estimates suggesting increases of up to 73,000% by 2045. This potential growth is linked to the increasing adoption of spot Bitcoin ETFs, which may attract institutional investors.
The approval of spot Bitcoin ETFs in January 2024 has sparked interest among institutions, with about 600 investors holding stakes in the iShares Bitcoin Trust. However, Bitcoin remains a highly volatile asset, and forecasts are uncertain.
Apple Vision Pro receives mixed reviews as users praise features but note weight concerns
Apple Vision Pro launched in January 2024, generating significant interest in consumer technology. The device is now available in several countries, including the U.K., with a price of ยฃ3,499. Initial impressions highlight its advanced features but suggest it is more of a future concept than a current necessity.
Users praised the device's attention to detail, intuitive interface, and immersive content experience. The seamless animations and eye-tracking controls were particularly noted for enhancing usability. The Digital Crown feature also received positive feedback for ease of navigation.
However, the device's weight was a common concern. Weighing around 1.3 to 1.4 pounds, it felt heavy after extended use, comparable to wearing a large tablet on the face. Despite this, the technology inside is impressive, indicating potential for future improvements.
Lucid reports record deliveries while Rivian faces production challenges
Lucid Group reported a record 2,781 vehicle deliveries in the third quarter of 2024, a 91% increase from the previous year. The company produced 1,805 vehicles, aided by significant factory incentives averaging over $19,000 per vehicle.
In contrast, Rivian Automotive's deliveries fell by 36% to 10,018 vehicles. The company reduced its full-year production forecast from 57,000 to between 47,000 and 49,000 due to component shortages affecting production.
Despite the challenges, Rivian maintained its delivery guidance of 50,500 to 52,000 vehicles for the year. The company aims to deliver over 13,100 vehicles in the fourth quarter to meet its targets.
U.S. government warns Windows users to update by October 29 to fix critical vulnerability
The U.S. government has issued an emergency warning for all Windows users to update their systems by October 29 due to a new vulnerability, CVE-2024-43573. This follows two previous warnings in recent months about similar security issues.
The vulnerability affects many Windows devices, potentially allowing attackers to take control. Federal employees must apply updates or stop using their PCs, but the guidance is also aimed at the broader cybersecurity community.
Around 900 million Windows 10 users are nearing the end of support, which will leave them without critical updates. Additionally, about 50 million users are on older versions of Windows, making them particularly vulnerable to these threats.
Apple Intelligence launches with mixed reviews on new AI features
Apple Intelligence, Apple's new AI suite, is set to launch on iPhones, iPads, and Macs this month. The update includes features like call recording, natural language photo searches, and enhanced writing tools. Some features are well-received, while others need improvement.
Notable features include the ability to record calls and generate summaries, which works well across various iPhone models. The new photo search function allows users to find images using natural language, improving search accuracy. The Mail app will also introduce Priority Mail and email summaries to help users manage their inboxes.
However, some features, like the email summaries in the inbox and the Type to Siri function, have been criticized for their limited effectiveness. The Rewrite tool in Writing Tools has also been deemed unhelpful, often diminishing the original writing style. Overall, while some features show promise, others require further refinement.
US stocks hit record highs as strong earnings drive six-week winning streak
US stocks closed at record highs on Thursday, marking a six-week winning streak. The Dow and S&P 500 reached all-time highs, driven by strong third-quarter earnings from Netflix and Intuitive Surgical, which saw their stocks rise over 10%.
So far, 13% of S&P 500 companies have reported earnings, with 82% exceeding profit estimates. The blended earnings growth rate for the S&P 500 stands at 3.4%, indicating potential for continued growth if this trend persists.
Next week, investors will focus on earnings reports from over 80 S&P 500 companies and key economic data, including the US leading economic indicators index and existing home sales.
Source: https://ca.finance.yahoo.com/news/stock-market-today-us-stocks-040941782.html
NVIDIA launches Llama-3.1-Nemotron-70B-Instruct to challenge leading AI models
NVIDIA has launched a new AI model called Llama-3.1-Nemotron-70B-Instruct, which is designed to compete with OpenAI's GPT-4o and Anthropic's Claude 3.5 Sonnet. Despite having fewer parameters at 70 billion, it demonstrates strong performance and efficiency.
The model achieved high scores in benchmark tests, outperforming some larger models. It focuses on producing human-like responses while using fewer resources, highlighting NVIDIA's shift towards efficiency in AI development.
NVIDIA has made the model open-source, allowing developers to customize it on the Hugging Face platform. This move increases accessibility and supports further research in AI applications.
Meta launches Spirit LM, a new open-source model for text and speech integration
Meta has launched Spirit LM, its first open-source multimodal language model that integrates text and speech inputs and outputs. This model aims to improve AI voice experiences by generating more natural and expressive speech, competing with models like OpenAI's GPT-4o.
Spirit LM comes in two versions: Base, which uses phonetic tokens, and Expressive, which adds pitch and tone tokens to convey emotional states. Currently, it is available only for non-commercial research under Meta's FAIR Noncommercial Research License.
The release supports Meta's commitment to open science, providing researchers with the model's code and documentation. Spirit LM is part of a broader initiative to enhance AI capabilities, focusing on applications like virtual assistants and customer service bots.
Earnings reports from Boeing, Tesla, IBM and T-Mobile highlight busy week ahead for investors
Next week, major companies like Boeing, Tesla, IBM, and T-Mobile will report their earnings, marking a busy period for investors. Jim Cramer highlighted these reports as significant for market movements.
On Monday, SAP and Nucor will release earnings. Cramer expects a positive report from SAP but is uncertain about Nucor due to weak steel prices. Tuesday will see reports from General Motors, Danaher, RTX, and GE Aerospace, with Cramer predicting good results for the aerospace firms.
Wednesday's reports include Boeing and Coca-Cola, with Cramer noting ongoing institutional interest in Boeing. He anticipates strong earnings from IBM and Tesla, while expressing caution about Lam Research. Thursday will feature earnings from several companies, including Southwest Airlines and Honeywell.
Source: https://www.cnbc.com/2024/10/18/cramers-week-ahead-earnings-from-boeing-tesla-ibm-and-t-mobile.html
Tesla reveals new robotaxi while AMD launches AI chip and China banks plan deposit rate cuts
Tesla has unveiled a new two-door robotaxi, called "Cybercab," which will have no steering wheel or pedals. Production is set to begin in 2026, with a target price under $30,000. Investors remain skeptical due to past missed deadlines.
Advanced Micro Devices (AMD) has introduced its new AI chip, the Instinct MI325X, aimed at competing with Nvidia's dominance in the AI chip market. The MI325X will enter production by the end of 2024, with plans for annual chip releases.
Chinese banks are expected to cut deposit rates on approximately RMB 300 trillion in deposits, following government stimulus measures. This marks the second rate reduction this year, as banks struggle with declining profitability and low net interest margins.
Source: https://sg.news.yahoo.com/top-stock-market-highlights-week-230000322.html
SandboxAQ seeks $5 billion valuation as it expands AI and quantum computing projects
SandboxAQ, a spinout from Alphabet, is seeking to raise funds that would value the company at $5 billion. This follows a $500 million funding round in early 2023, which valued it at $4 billion.
Founded in March 2022, SandboxAQ focuses on software that combines quantum computing and AI. It is not developing quantum computers but is creating software to model molecules and predict their behavior.
The company has secured contracts in various fields, including battery technology, navigation systems for the U.S. Air Force, and a new medical imaging device. Investors are showing strong interest, with many setting up special purpose vehicles to invest in SandboxAQ.
GM expects to turn a profit on electric vehicles by end of 2024
General Motors (GM) plans to start making profits from its electric vehicles (EVs) by the end of 2024. CEO Mary Barra confirmed that manufacturing and supply chain issues affecting battery production have been resolved. GM aims to phase out internal combustion engine vehicles by 2035 and achieve carbon neutrality by 2040.
Currently, Tesla leads the US EV market in sales and profits. Ford's EV division has reported losses, while other companies like Rivian and Lucid are struggling financially. Despite rising demand for EVs, high costs remain a barrier, though federal tax incentives of up to $7,500 are available for qualifying vehicles.
GM is investing in new battery plants in Indiana and Michigan and plans to reduce battery costs by using lower-cost lithium iron phosphate (LFP) batteries. The company expects to maintain a driving range of over 350 miles for its larger LFP vehicles. GM's affordable EVs, priced below $30,000 after tax credits, will also gain access to Tesla's charging network.
Source: https://www.theverge.com/2024/10/18/24273630/gm-ev-profitability-viability-2024-barra