Monogram | September 5th, 2024

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

Learn More Here ➔

GOOD MORNING

Here's everything you need to know today: Nvidia finds itself in the spotlight once again, but this time, it’s not about groundbreaking AI chips or a plummeting stock price; it’s about subpoenas… or, rather, the lack thereof. On Wednesday, Nvidia flat-out denied a Bloomberg report that it had received a subpoena from the Department of Justice over antitrust concerns. After some recent rough days, Nvidia’s having a bit of fun with the latest drama, basically telling CNBC, “We asked, and nope, no subpoena here. But hey, happy to chat if they’ve got questions.”

With over 80% of the data center AI chip market in its pocket, Nvidia clearly isn’t sweating it. Its explanation of market dominance to CNBC stated that it “wins on merit, as reflected in our benchmark results and value to customers, and customers can choose whatever solution is best for them.” Is that brat? (Are we still doing brat?)

So whether the DOJ is actually gearing up for an antitrust probe remains to be seen, but for now, Nvidia gets a moment to sit back, laugh and suggest to Bloomberg that it might want to run its news through AI first.

Let’s Dive Into More Details Below…

BREAKING NEWS
If you’ve been paying attention for, oh, I don’t know, the past 90 years, you’ll notice that September is a month when stocks traditionally take a seasonal nosedive. Traders get the post-summer blues, and investors watch their portfolios dip like they’ve never heard of the “September Effect.” Every year, almost like clockwork, it’s the same thing: stocks tank, everyone looks around wondering why, and sell-side brokers start questioning if they should have gone into real estate like their cousin with the nice car.

Historically, September is the market’s worst month. On average, the S&P 500 has a tendency to slip just enough to ruin your first pumpkin spice beverage of the year. This isn’t some weird cosmic coincidence. In fact, it’s as seasonably reliable as the market getting spooked by inflation, traders making terrible decisions after a long weekend, or Jim Cramer going on 20-minute live-air digressions about the Eagles. While everyone else acts surprised, you should know that the September slump has been lurking around since before your great-grandparents were trading on their Robinhood accounts.

WHAT HAPPENED
So, why does the September Effect hit us like a bad hangover every year? Well, it’s either a self-fulfilling prophecy (but that would be boring and make for a short article) or a toxic cocktail of post-vacation panic, desperate rebalancing, and now, some spicy rate-cut drama (see? Isn’t that more fun?).

Traders return from their beach houses and summer bliss, see the state of their portfolios, and suddenly everyone’s selling like their uncomfortable long pants are on fire. This year, we can throw in the fact that Wednesday’s job numbers just tanked, with U.S. job openings hitting their lowest since early 2021. For more fun context, Tuesday’s bond market action saw the yield curve twist like a pretzel, with the 2-year briefly dipping below the 10-year as traders doubled down on Fed rate cuts after weak labor data. Treasury yields jumped across the board, making it clear Wall Street’s bracing for some serious interest rate gymnastics. And, voilà, we’ve perfected this storm of ennui-charged market chaos.

That weaker-than-expected labor data has everyone betting the Fed is about to go wild with rate cuts (maybe even two full percentage points over the next year if Jay Powell is feeling frisky). Normally, rate cuts are a reason to party, but when the Fed’s slashing to stave off a recession, the vibe is more “ruh roh” than “the Fed is W.” With traders scrambling for safety and institutional rebalancing in full swing, it’s a sell-off frenzy. And hey, don’t forget that tax-loss harvesting season is just around the corner, so everyone’s looking to offload their losers. It’s like Wall Street’s version of a garage sale, but instead of acquiring cheap broken stuff, you get existential dread.

CONTINUE READING ➔

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
Well, well, well… Dick’s Sporting Goods just strutted into the earnings room like it hit a new personal best on the squat rack, and Wall Street gave it the kind of polite golf clap reserved for corporate luncheons. Dick’s pretty much obliterated expectations, but when it came time to puff out its chest on full-year guidance, it barely mustered a half-hearted fist bump. Crushing Q2 only to throw out a limp guidance raise? That’s mid, bro.

And because no earnings day would be complete without a side of chaos, Dick’s casually dropped the “Oh, by the way, we got hacked” bomb. It's 2024, and if you aren’t getting cyberattacked, what are you even doing?

WHAT HAPPENED
Your jock nephew’s favorite retailer reported earnings per share of $4.37, blowing past the analysts’ prediction of $3.83, and raked in $3.47 billion in revenue, a little higher than the $3.44 billion expected. Sales are up 8% from last year, and those precious comps? Dick’s flexed a 4.5% increase, beating the 3.6% analysts were hoping for.

Despite these knockout numbers, Dick’s looked around the economy and basically yawned when it came time to raise its full-year earnings guidance, bumping it by a meager 18 cents at the midpoint to $13.55-$13.90 per share. So, after crushing Q2 expectations by 54 cents, it celebrated by giving us an 18-cent raise for the rest of the year. Not precisely “crushing bottles of Prime and running through walls” behavior.

Dick’s also dropped the bomb that it’s been hacked. But to calm nerves it reassured investors and customers that it has rolled out a “cybersecurity response plan” (because, obviously, every major retailer has one of those in 2024). How bad was it? Dick’s claims it’s under control, but it also isn’t exactly giving details. We see a new client for you, CrowdStrike.

CONTINUE READING ➔

BREAKING NEWS
In technical analysis (TA), "accumulation" sends amateur traders running for the exits faster than politicians dodging a wealth tax. But for pros, it’s when they place tiered buy orders and “buy the boredom.”

Despite Bitcoin trailing Tether (USDT) in volume, its price action has been a slog. After peaking at $75,000 in March, it played whack-a-mole through April’s halving and topped out in June, only to slump to today’s price just under $60,000.

If you have been trading these levels, the crypto exchanges are grateful—there is nothing more brutal than chop. Well, except maybe liquidations. On August 5, crypto traders lost over $1 billion in total liquidations, affecting nearly 300,000 traders who were forced out of their leveraged positions or collateral trades, according to data from Coinglass.

With all that said, where is Bitcoin today, where - if anywhere - is it going, and what politicians continue to support Bitcoin and start to support others and their platforms?

WHAT HAPPENED
One key driver behind the market’s recent rollercoaster has been liquidation events—more frequent than just the August 5 blowout. In June, Bitcoin plunged 7%, slicing through the $60K support level and triggering a cascade of leveraged long positions. Rumors about the impending $9 billion Mt. Gox Bitcoin and Bitcoin Cash distribution likely fueled the sell-off.

In July, liquidations struck again, wiping out $380 million as Bitcoin dropped 8%. August and September kept the streak alive, with Bitcoin and Ethereum bleeding alongside the S&P 500 and tech stocks like NVIDIA. According to Coinglass, over 73,000 over-leveraged traders were wiped out, vaporizing $200 million in value.

Despite all that, Bitcoin’s relevance stays strong, largely thanks to Bitcoin ETFs keeping it front and center for hedge funds and retail traders alike. But the ETF scene has been less rosy lately, with most issuers seeing red. BlackRock’s IBIT, Grayscale’s GBTC, and Fidelity’s FBTC all showed steady outflows, while Ark/21Shares’ ARKB saw both gains and losses. Still, investors have injected $17.5 billion into digital currency ETFs this year—so the big money remains bullish, even if the short-term picture is rocky.

Meanwhile, countries like Japan are easing the tax burden on digital assets, aiming to cut max tax rates from 55% to 20%, signaling a push for crypto-friendly reforms globally. The US, meanwhile, has Senator Cynthia Lummis pushing “The Bitcoin Act,” a proposal to create a strategic Bitcoin reserve for the US. While ambitious, it’s clear that crypto is inching closer to mainstream acceptance—regardless of the market chop.

CONTINUE READING ➔

1. Stock Market Slumps as Nvidia Leads Chip Sell-off

Wall Street faced a steep decline, with the Dow dropping 600 points and the Nasdaq falling 3%, driven by a sharp sell-off in semiconductor stocks, led by Nvidia. Concerns over AI growth and potential antitrust actions have caused investor anxiety, leading to significant losses in the chip sector.

2. Nvidia Subpoenaed by DOJ in Antitrust Probe

Nvidia has been subpoenaed by the U.S. Department of Justice in an antitrust investigation, raising concerns about potential monopolistic practices in the AI chip market. This probe is part of the broader scrutiny of the tech giant’s dominance in the semiconductor industry, which is impacting investor confidence.

3. U.S. Steel Merger with Nippon Blocked by Biden

President Joe Biden is expected to block Nippon Steel’s $14.9 billion acquisition of U.S. Steel, citing national security concerns. The decision has sent U.S. Steel shares tumbling and raised questions about the future of the iconic American company.

4. Dollar Tree Stock Drops 20% Amid Slower Consumer Spending

Dollar Tree shares plummeted 20% following a disappointing earnings report and lower guidance for the remainder of 2024. The company cited inflationary pressures and a cautious consumer base as key factors behind the weaker-than-expected performance.

5. Blackstone Acquires AirTrunk in $16.1 Billion Deal

Blackstone has agreed to acquire Australian data center operator AirTrunk in a deal valued at $16.1 billion. This move strengthens Blackstone’s position in the fast-growing Asia-Pacific data infrastructure market, marking one of the largest private equity deals in the region.

6. Volkswagen Workers Protest Potential Plant Closures

Volkswagen is facing backlash from its workforce over potential factory closures in Germany. Management has cited weak European car sales as the reason for considering shutting down two plants, which has sparked tension between labor unions and company leadership.

7. Intel Struggles Jeopardize Biden’s Chipmaking Strategy

Intel’s ongoing financial troubles are undermining the Biden administration’s chipmaking strategy. The company’s struggles raise concerns over the viability of U.S. efforts to build a self-sustaining semiconductor industry to compete with China.

8. Dick’s Sporting Goods Raises Outlook Despite Industry Headwinds

Dick’s Sporting Goods boosted its full-year outlook following strong demand in Q2 2024, surpassing analysts’ expectations. While theft had previously weighed on the retailer’s profits, the company has reported improvements, outpacing many competitors in a challenging retail environment.

9. Volvo Scales Back EV Ambitions Amid Waning Demand

Volvo has revised its plan to go fully electric by 2030, now aiming for at least 90% electric vehicles. The company cited slow EV demand and insufficient charging infrastructure as key obstacles to achieving its original target.

10. Job Openings Fall to Lowest Level Since January 2021

U.S. job openings dropped to 7.67 million in July, marking the lowest level since early 2021. This decline is seen as a sign of a cooling labor market, with potential implications for Federal Reserve policy as the central bank monitors economic conditions closely.

CONTINUE READING ➔

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

Learn More Here ➔