DHUnplugged #695: Fresh Frenzy

Fed in Focus – FOMC Rate Decision Wednesday.

Reddit IPO Frenzy!

Inflation – definitely not going away.

Announcing – A New Closest to The Pin

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Warm Up
- A New CTP Announced
- No Show Next week - business meetings out of town
- A not so surprising result in the Russian Elections
- An important change to stock trade settlements is coming

Market Update
- Fed in Focus - FOMC Rate Decision Wednesday
- Reddit IPO Frenzy
- Inflation - definitely not going away
- AI Frenzy - Culd Call This DHAI Unplugged - so much AI news to discuss
- Yield Frenzy

PPI Release
- After  a HOT CPI, PPI Comes in Hotter
- 0.6% on the core - but only 1.6% YoY
- The Producer Price Index for final demand rose 0.6 percent in February.
- Prices for final demand goods advanced 1.2 percent, and the index for final demand services moved up 0.3 percent.
- Prices for final demand advanced 1.6 percent for the 12 months ended in February.
- Markets didn't know what to do with this on Friday.

Company Stats - Recession?
- According to FactSet: During Dec-March earnings calls, 47 cited the term “recession” during their earnings calls for the fourth quarter.
-- This number is below the 5-year average of 85 and below the 10-year average of 61.
- This quarter will mark the lowest number of S&P 500 companies citing “recession” on earnings calls for a quarter since Q4 2021

Companies Citing Recession

% of Companies

- IPO slated to be live sometime this week (March 21)
- 5X Oversubscribed
- Reddit began sending invitations to users to participate in the IPO based on one of two measurements of engagement on the site: either the number of actions they’ve taken as a moderator of a forum on the platform (also known as a “subreddit”) or their “karma” score, a figure that indicates a user’s contributions and reputation among other users on the site.
- Reddit plans to list 22 million shares at a price between $31 and $34, according to the latest version of the IPO prospectus it filed Monday with the Securities and Exchange Commission. The company stands to take in between $473.6 million and $519.4 million from the sale of roughly 15.3 million shares.
- Valuation > $6 billion
- Question???? Is Reddit profitable? NO -  However, the company has been substantially growing revenue in the past few years.
---- Reddit's total revenue in 2023 was $804 million, up 21% from $666 million in 2022.
----- Reddit's net loss for 2023 narrowed to $90.8 million.

Yields - 10 YR
- Highest level of 2024
- technically breaking out - if Fed moves a bot more hawkish - 4.50% is next test


Japan Yields
- The Bank of Japan is set to raise its key interest rate for the first time in 17 years on Tuesday following its two-day monetary policy meeting, Kyodo reported.
- The BOJ will raise the short-term rate to the 0%-0.1% range, the report said. The development reflects growing confidence among policymakers that a virtuous cycle of wage growth and price hikes is in motion following this year’s labor-management pay negotiations

Global Rates - Who Will CUT First?

First Mover?

- Increasing prices on Model Y by $1,000
--- Stock moves up by 6%
- Goldman Downgrades - Perhaps this is why stock moved up - another bug downgrade - stock in the toilet - nowhere else to go
--- SpaceX is building a network of hundreds of spy satellites under a classified contract with a U.S. intelligence agency, five sources familiar with the program said, demonstrating deepening ties between billionaire entrepreneur Elon Musk's space company and national security agencies.

Elon - Ketamine
- A video, which was posted Monday on X, Musk said the drug helps him manage a "negative chemical state" similar to depression. He argued that investors should not worry about his drug use so long as his companies continue to perform.
"From the standpoint of Wall Street, what matters is execution," said Musk, who helms three corporations including the electric vehicle maker, the rocket company SpaceX and the social media company X. Musk stated that Tesla was worth as much as the rest of the car industry combined.
"For investors, if there's something I'm taking, I should keep taking it," he added.

Fake Meat Update
- Beyond Meat files $250 mln mixed shelf securities offering

6% No More
- The National Association of Realtors (NAR) is set to pay up $418 million in damages and eliminate commission rules in a landmark deal experts say will significantly shake up the real estate industry.
- The NAR agreed to settle after a series of lawsuits accused the organization of conspiring to artificially inflate home sale commissions.
- However, recent lawsuits argued the NAR stifled competition among real estate brokers and violated antitrust laws by requiring the seller’s agent to make an offer of payment to the buyer’s agent and implementing rules that led to steep standard commission fees.
- This settlement means the NAR can no longer set any rules that would allow a seller’s agent to set compensation for a buyer’s agent. The association’s Multiple Listing Service (MLS) — which buyers and sellers use to view for-sale properties — will no longer feature any fields offering broker compensation either.
- Zillow and  Compass smoked on the ruling
- How does this work? How do buyers find agents that have no idea what they will be paid?

Insider Selling
- Peter Thiel sold some of his $3.4 billion stake in Palantir Technologies Inc. for the first time in more than two years as shares of the software and analysis company soar on artificial intelligence optimism.
- Thiel sold more than 7 million shares worth roughly $175 million Tuesday, according to a filing. He still owns about 7% of the Denver-based company, the largest asset in his $10.5 billion fortune,

AI Chip Frenzy
- NVIDIA today announced its next-generation AI supercomputer — the NVIDIA DGX SuperPOD™ powered by NVIDIA GB200 Grace Blackwell Superchips — for processing trillion-parameter models with constant uptime for superscale generative AI training and inference workloads.
- 25X less money and less energy cost to operate
- The Blackwell GPU architecture features six transformative technologies for accelerated computing, which will help unlock breakthroughs in data processing, engineering simulation, electronic design automation, computer-aided drug design, quantum computing and generative AI

AI and Energy
- Concern is rising about the energy use of AI chips etc
- More than 7,000 people are headed to Houston this week to attend CERAWeek by S&P Global with a key question in mind: How to meet increasing demand for power amid the transition to clean energy.
---- Some are very concered about the consumption with the high energy
- Yergin, who wrote the Pulitzer Prize-winning book The Prize: The Epic Quest for Oil, Money & Power, will be the voice of the conference and lead more than two dozen panels featuring heavyweights from government, the oil and gas sectors and tech.

Doctors - AI
- Doctors can now spend more time with patients.
- This technology allows doctors to consensually record their visits with patients.
- The conversations are automatically transformed into clinical notes and summaries using artificial intelligence.
- Companies like Microsoft's Nuance Communications, Abridge and Suki have developed solutions with these capabilities, which they argue will help reduce doctors' administrative workloads and prioritize meaningful connections with patients.
- Doctors will get better case notes - well organized that will help them when they review and then provide appropriate treatment etc.
--- Doctors will be able to listen to patients and be present with discussions in exam rooms.

OMG - 32 Hour Workweek? HORRIFYING
- Sen. Bernie Sanders and Senate Democrats cited advances in artificial intelligence and automation Thursday as they argued for a new bill that would mandate a 32-hour federal workweek.
- Employers would have to pay overtime compensation to non-exempt employees of 1.5 times the hourly rate for every hour worked past eight hours in a single day, and two times the hourly rate for every hour worked past 12 hours.
- The bill also would guarantee that total weekly wages would not be cut as a result of the reduction in total hours worked.
- The bills come months after business leaders such as JPMorgan Chase CEO Jamie Dimon and Microsoft co-founder Bill Gates predicted that people could within decades work as little as three days a week due to innovations in AI, and automation.
- Sanders and Democrats at Thursday's hearing said that reducing the workweek would allow people to spend more time with family and on hobbies.

- Southwest Airlines said Tuesday that it will have to trim its capacity plans and reevaluate its financial forecasts for the year because of aircraft delivery delays from Boeing, its sole supplier of airplanes.
- The Dallas-based airline said Boeing informed Southwest's leaders that it should expect 46 Boeing 737 Max 8 planes this year, down from 58. Southwest had expected Boeing to deliver 79 Max planes, including some of the smallest model, the Max 7, which hasn't yet won certification from the Federal Aviation Administration.

Oprah - Weight Loss Special
- Did anyone watch this?
--- Oprah - Weight Watchers step down and divest/donate of all shares (Down ~ 80% since she joined board)

- Starting May 28, 2024, the trade settlement period for U.S. and Canadian securities traded on U.S. exchanges will be shortened to one day after the trade date (T+1). Currently, the settlement period is two days after the trade date (T+2).


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