Monogram | September 3rd, 2024

Today's insights are courtesy of Monogram, an AI robotics company revolutionizing orthopedic surgery.

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GOOD MORNING

Here's everything you need to know this week: Welcome to September, or as we’re calling it: “International Interest Rate Cut Awareness Month.” As the leaves begin to turn, so too will the dials at central banks around the world. The Fed, alongside its global peers like the ECB and Bank of England, are gearing up to slash rates in unison. After Jay Powell’s Jackson Hole signaling, the market’s got its bets placed on three cuts before year’s end. Europe’s central banks are expected to follow suit with their own trims… but using a different metric that they’re pretty certain is superior and less tacky. Cheap(er) money is back, y’all! Time to get weird again!

1. Wonder drugs getting woundrous-er

What can’t these weight-loss drugs pull off? Semaglutide (aka the secret sauce in Ozempic and Wegovy) isn’t just melting pounds and curing diabetes; now it’s slashing Covid-19 death rates by 33%. Yeah, you read that right. According to a new study that tracked over 17,600 overweight or obese folks with heart conditions, it turns out semaglutide isn’t just a one-trick pony. These patients weren’t just dodging heart attacks, they had a 29% lower risk of dying from anything else too. So now we’ve got weight loss, heart health, and pandemic survival all wrapped up in one shot. With semaglutide flexing like this, don’t be surprised when pharma stocks start popping off at this week’s delayed opening bell

2. Unfathomable tragedy not stopping HP from staying litigious

Hewlett Packard is not letting a little thing like Mike Lynch’s recent tragic death get in the way of continuing to sue him for billions of dollars. Still fuming over the $11.1 billion Autonomy deal that turned into an accounting scandal nightmare, allegedly masterminded by Lynch himself, the tech giant announced on Monday that it’s going after up to $4 billion from his estate. With a 2022 civil win already under its belt (though with less-than-hoped-for damages), HP’s appetite for revenge remains unsatisfied, so it’s politely telling his widow that once she’s done mourning the loss of her husband and daughter in a boating accident of Sicily that she barely survived herself, it will see her in court.  

3. Warren Buffet ‘bout to divest from Bank of America in private

Warren Buffett is close to keeping to himself about how much faith he’s lost in Brian Moynihan. After steadily offloading Bank of America stock, Buffett’s Berkshire Hathaway is now down to an 11.4% stake, putting it just a nice little equity garage sale away from the 10% mark. Once he crosses that line, The Oracle won’t have to publicly disclose his moves immediately, allowing him to keep his dwindling confidence in BofA’s CEO under wraps. Since mid-July, Buffett’s been quietly cashing out, with $6.2 billion already pocketed and another $848 million just last week. As if BriMo wasn’t already the saddest big bank CEO.

4. Stranded in Space? Thanks, Boeing

Volkswagen is teetering on the edge of closing factories in Germany for the first time ever, and CEO Oliver Blume (who’s been more consensus-builder than his combative predecessor Herbert Diess) now has to face off against the formidable IG Metall union. With VW shares down 30% over the last five years and Asian competitors breathing down its neck, something had to give, even for the Germans. But telling that to the unions, who’ve already promised “fierce resistance,” is another story. Factor in the nation’s wider economic struggles and the far-right getting an actual foothold with their first regional electoral win over the weekend, and the weltschmerz is hanging heavy over Germany these days.

Political and Market Sentiment

Vice President Kamala Harris put the labor into Labor Day with a full-court press for union votes. Tearing through Michigan, Pennsylvania, and Wisconsin with Minnesota Governor Tim Walz in tow, Harris kicked things off in Detroit, dropping the line: “Unions built this country, and they deserve recognition.” Translation: Democrats need labor in their corner, and they’re not about to let Trump’s MAGA populism ruin an old relationship. 

But the real action was in Pittsburgh, where Harris teamed up with Biden to take a swing at the proposed sale of U.S. Steel to Japan’s Nippon Steel. Nothing says “we care about American jobs” like blocking a foreign takeover right before an election in key swing states. But here’s the rub: union membership is down to 1 in 10 workers, and Harris and Biden know they’re walking a tightrope. They need labor’s loyalty, but Trump’s out there, pitching his populist message like a guy with nothing to lose. If the unions start to wobble, the Democrats could find themselves scrambling to keep the house from collapsing. And they could use a real nice jobs number on Friday.

Global Markets Overview

Europe: Last week, the pan-European STOXX 600 was living its best life, popping 1.34% to a record high as the ECB toyed with the idea of rate cuts amid cooler inflation. Germany’s DAX led the charge, notching a 1.47% gain, while Italy’s FTSE MIB and France’s CAC 40 also flexed. The UK’s FTSE 100? Well, it managed a respectable 0.59% bump. But Monday brought everyone back to reality. Eurozone inflation flirted with the ECB’s 2% target, leaving stocks in a holding pattern. The Stoxx 600 dipped 0.04%, with retailers taking a hit while telecoms had themselves a moment.

Asia: Japan’s markets found their footing after a rocky start to August, with the Nikkei 225 and TOPIX shaking off early losses to close the month up 0.7% and 1.0%, respectively. The initial panic over the BoJ’s July rate hike gave way to cautious optimism as inflation data out of Tokyo hinted that the central bank might not be done tightening just yet. Meanwhile, China’s markets stumbled as disappointing earnings and gloomy PMI data took the wind out of investors’ sails. The Shanghai Composite dipped 0.43%, while the CSI 300 edged down 0.17%. Hong Kong’s Hang Seng, you ask? A surprising 2.14% pop.

The Week Ahead

After the market’s whiplash rollercoaster ride post-NVIDIA’s way-too-important earnings last week, all eyes are locked on the upcoming US employment report because, let’s face it, that’s the next big market mover. Despite the recent drama, US consumer spending is still chugging along, thanks to solid household income and wealth. The virtuous cycle is staying virtuous, but this job report is the last litmus test for everyone looking forward to going ahead and celebrating “International Interest Rate Cut Awareness Month” in style.

Let’s Dive Into More Details Below…

Robotic knee surgeries will be 4X as common by 2027. Monogram (Nasdaq: MGRM) just filed for FDA approval to commercialize their patented tech.

MGRM closed as high as $3.44 in the last 2 weeks, but they’re offering convertible unlisted preferred stock for $2.25/share for a limited time.

BREAKING NEWS
Intel has been taking a leisurely stroll down the AI revolution boulevard while everyone else has been sprinting. And now, surprise, surprise, the one-time microchip king is in a bit of a pickle. What started as a quiet murmur about Intel's reluctance to embrace AI has snowballed into a full-blown crisis.

The stock price is getting shredded, Nvidia is eating its lunch (and all other meals), the C-suite is somewhere south of “embattled,” board members are turning into apostates, and now Intel has reached the “someone call the investment bankers” boiling point.

WHAT HAPPENED
Intel’s leadership, who have essentially ceded the field to Nvidia after brilliantly pooh-poohing the impact of AI in the chips market, had apparently been under the illusion that time was on their side. But after watching their stock perform like an Australian breakdancer YTD, Intel’s brain trust is now scrambling to fix the mess they’ve made. According to multiple reports, Intel has enlisted the help of Morgan Stanley and other financial bigwigs to present options at its upcoming September board meeting. Let’s be clear; these options will be more about putting out fires than recapturing the future. The potential strategies on the table include the possible breakup and sale of some of Intel’s businesses because nothing says “we’ve got this” like chopping up the company and selling it for parts.

The markets, however, always love the acknowledgment of a good corporate emergency. Intel’s stock jumped 8% on the news, a clear sign that investors are either optimistic about a shakeup or just happy to see the company doing something other than sitting on its hands. The revelation was first dropped by Bloomberg, but Intel’s response? Crickets. Even Morgan Stanley, the supposed knight in shining armor, decided to pass on commenting.

However, Intel’s CEO Pat Gelsinger did make an appearance at the Deutsche Bank Technology Conference this week, where he tried to assure everyone that the company was fully aware of… let’s go with investor skepticism. He mentioned something about operating “efficiently with nimbleness,” but at this point, it’s hard to shake the image of Intel as a nonagenarian at Coachella telling everyone it’s “having a brat summer.”

CONTINUE READING ➔

1. Goldman Sachs to Lay Off Up to 4% of Workforce

Goldman Sachs plans to reduce its workforce by up to 4% through its annual review process, reflecting ongoing challenges in the financial sector. The cuts are part of a regular evaluation to manage underperformers and adjust to market conditions.

2. Nvidia's $50 Billion Share Buyback Criticized

Nvidia's recent announcement of a $50 billion share buyback has sparked criticism, with some analysts arguing it sends the wrong message to investors. While buybacks typically boost earnings per share, concerns are growing about long-term growth prospects.

3. Medical Properties Trust Settles with Steward Health

Medical Properties Trust has reached a settlement with Steward Health Care regarding leasing claims. This settlement resolves disputes with the bankrupt hospital operator, impacting the financial outlook for both parties.

4. Intel Looks to Shed Assets Amid Financial Struggles

Intel is considering selling off non-core assets and implementing cost-cutting measures as it navigates what it describes as its worst financial period in history. The company is working with investment banks to execute its recovery strategy.

5. Volkswagen Warns of Potential Plant Closures in Germany

Volkswagen has warned that it may close plants in Germany due to rising costs and intense competition from Chinese electric vehicle manufacturers. This would mark the first time in its history that the company shuts down facilities in its home country.

6. Disney Channels Go Dark on DirecTV Amid Carriage Dispute

Disney has pulled its channels, including ESPN and ABC, from DirecTV as the two companies failed to reach a new distribution agreement. The blackout affects millions of subscribers and coincides with major sporting events.

7. Li Auto Reports Strong August Sales Despite Economic Challenges

Li Auto delivered 48,122 vehicles in August 2024, marking a 37.8% year-over-year increase. Despite a slight dip from July, the Chinese automaker outpaced competitors, signaling resilience amid challenging economic conditions.

8. Hewlett Packard Pursues $4B Claim Against Mike Lynch's Estate

Hewlett Packard Enterprise has confirmed it will continue to pursue a $4 billion damages claim against the estate of Mike Lynch, the British tech mogul who recently died. The lawsuit relates to the 2011 acquisition of Lynch's company, Autonomy.

9. Murdoch's REA Group Mulls Bid for Rightmove

Rupert Murdoch's REA Group is considering a bid to acquire UK property portal Rightmove for $5.8 billion. The potential acquisition could create a global digital real estate company, boosting REA's market position.

10. Thousands of U.S. Hotel Workers Strike for Better Pay

Over 10,000 hotel workers across the U.S. have gone on strike during Labor Day weekend, demanding higher wages and the reversal of pandemic-era job cuts. The strike affects major chains including Hilton, Hyatt, and Marriott.

CONTINUE READING ➔

Today's insights are courtesy of Monogram, an AI robotics company revolutionizing orthopedic surgery.

Learn More Here ➔

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