"Soft US Headline CPI is Unlikely to Be Sufficient to Reanimate Expectations of another Large Fed Cut"

He's right. In fact there is some concern that monthly and Year-over-Year inflation itself could reanimate as soon as the report in November. Should this come to pass we will lead with Doctor Frankenstein's: "It's Alive!"

From Marc to Market:

Overview: The US dollar is mostly softer ahead of the September CPI. The euro and Canadian dollar have recorded new lows for the move. The greenback extended its gains against the yen to JPY149.55 but has fallen to new session lows in the European morning near JPY148.85. Given the pushback against Fed Chair Powell's 50 bp cut last month revealed in the FOMC minutes, it will take more than a soft headline CPI today to renew speculation of another large move. In fact, the Fed funds futures, which a week ago was discounting about a 50% chance of another half-point cut is now pricing in about an 83% chance of a quarter-point cut. There are 44 bp of easing discounted for this year down from about 67 bp a week ago. Three Fed officials speak in the North American morning (Cook, Barkin, and Williams) but their views are known. The US Treasury sells $185 bln in bills today and $22 bln of 30-year bonds.

The PBOC's CNY500 bln swap facility for institutions to buy equities has formally been launched, and speculation ahead of Saturday's briefing by Finance Minister Lan helped lift Chinese stocks (CSI 300 rose about 1% and the index of mainland shares that trade in HK rose nearly 3.5%). The other large bourses in the region also rose after the S&P 500 rose new record highs yesterday. The Stoxx 600 in Europe and US index futures are softer. Bond markets are under modest selling pressures. European yields are firmer, with a four-basis point jump in Gilt yield to a new three-month near 4.22%. The presentation of the French budget later today could impact tomorrow. Gold is firm and appears to have carved a shelf near $2600. November WTI is consolidating in the upper end of yesterday's range amid ongoing risks that the war in the Middle East escalates....

....MUCH MORE

"Berkshire Hathaway raises $1.9 bln in Samurai bonds, set to boost Japan bets" (BRK)

From Reuters, October 10:

Warren Buffett's Berkshire Hathaway has raised 281.8 billion yen ($1.9 billion) in a yen-denominated bond offer, a move analysts say lays the ground for the U.S investment company to increase its exposure to Japanese assets.

The deal was the largest bond sale in the Japanese currency for the firm in five years, a term sheet reviewed by Reuters on Thursday showed.

 

The yen, or Samurai, bond issue signals Buffett's deepening association with Japan's capital markets after its equity stake buys in the nation's top five trading houses over the past four years.

 

Berkshire Hathaway said in a U.S. Securities and Exchange Commission filing that the proceeds raised in the deal would be used for general corporate purposes. It did not disclose the size of the deal in the filing.

 

The firm first announced it would buy stakes in Japan's trading houses in 2020 with the intention of holding them long-term and increasing ownership to as much as 9.9%. Since then, it has raised its stake in Japan's top five trading firms to around 9% each, according to its annual report in February....

....MUCH MORE

 

Not exactly John Templeton going into Japanese equities at 2-3 times earnings but Mr. Buffet sees something that the rest of the market is not bidding up. 

 

"Severe Geomagnetic Storm Predicted..."

 From SpaceWeather, October 10:

SEVERE GEOMAGNETIC STORM PREDICTED: A geomagnetic storm (G1-G3) that sparked auroras as far south as Arizona and Texas on Oct. 7th and 8th is finally over. If you missed the show, good news: More auroras are in the offing. The sun just launched another CME directly toward Earth, and it could cause a severe G4-class storm when it arrives on Oct. 10th. Keep reading... Aurora alerts: SMS Text

POWERFUL X-CLASS SOLAR FLARE AND CME: Sunspot AR3848 was directly facing Earth this morning, Oct. 8th (0156 UTC), when it unleashed a powerful X1.8-class solar flare. NASA's Solar Dynamics Observatory recorded the extreme ultraviolet flash:...

....MUCH MORE

The link is the frozen Oct. 10 page. Here is the updating home page:  

https://spaceweather.com/

"Ratan Tata, Patriarch of Biggest Indian Conglomerate, Dies at 86"

He had a immense impact on India, this article/obituary hits many of the highlights.

From Bloomberg via Yahoo Finance, October 9:

Ratan Tata, the businessman who inherited one of India’s oldest conglomerates and transformed it through a string of eye-catching deals into a global empire, has died. He was 86.

His death was announced in a statement by Tata Group Chairman Natarajan Chandrasekaran, who called Tata “a truly uncommon leader whose immeasurable contributions have shaped not only the Tata Group but also the very fabric of our nation.”

As chairman for more than two decades beginning in 1991, Tata rapidly expanded the 156-year-old business house. It now has operations in more than 100 countries and clocked $165 billion in revenue for the year ended March 2024.

Through more than two dozen listed firms, the conglomerate makes products ranging from coffee and cars to salt and software, runs airlines and introduced India’s first superapp. It has also partnered with Taiwan’s Powerchip Semiconductor Manufacturing Corp. for a $11 billion chip fabrication plant in India and is said to be planning an iPhone assembly plant.

Under Tata’s stewardship, the conglomerate embarked on an expansion drive that turned the tables on India’s colonial past. It snapped up iconic British assets including steelmaker Corus Group Plc. in 2007 and luxury carmaker Jaguar Land Rover in 2008. But the financial crisis roiled global markets soon after, damping car sales in developed economies.

“Ratan Tata imagined big and took the empire beyond India,” said Kavil Ramachandran, executive director of the Thomas Schmidheiny Center for Family Enterprise at the Indian School of Business in Hyderabad. “While he thought globally, these turned out to be hasty initiatives.”

Tata helmed the group for 21 years in his first stint and retired in 2012. He returned as interim chief for a few months in 2016 following the acrimonious ouster of his successor, Cyrus Mistry.

Tata also found himself at the center of intense battles for control of the conglomerate not once but twice in his career.

The first battle, when he took over as chairman in 1991, pitted him against long-time executives who had been running fiefdoms within the conglomerate under his predecessor. The second, in 2016 — four years after his retirement — was about preserving his legacy as Mistry sought to reduce debt.

Tata won both. In 2016, Mistry was ousted as the chairman of Tata Sons, the group’s main holding firm, in a boardroom coup. The move triggered a bitter courtroom battle that threatened to end a 70-year partnership with Mistry’s family and stamped Tata’s authority on the conglomerate. In 2020, Mistry’s family signaled its intent to sell an 18% stake in Tata Sons.....

....MUCH MORE  

He also had an impact on Climateer Investing with the little car, the Nano, and talk of an electric version.

Spawn of Milton: Multiple Tornados Hit Florida

From the New York Post, October 9:

If Hurricane Milton wasn’t bad enough, monster storm is spawning tornado supercells to wreak havoc on Florida

....MUCH MORE

"Non-native pink salmon have swarmed Norway’s rivers..."

 From Hakai Magazine, October 8:

Where the Rivers Run Pink
Non-native pink salmon have swarmed Norway’s rivers, prompting a relentless—and questionable—fight to beat back the invaders.

The Grense Jakobselv River flows from northwestern Russia to the Barents Sea. For 35 of its 45 kilometers, the river also serves as the border between Russia and Norway. This means fishing the Grense Jakobselv can be fraught. Where the river narrows, a Norwegian angler might accidentally tangle a hook in the heather on the Russian side. Crossing the border to untangle the line is forbidden, but so is depositing a foreign object on Russian soil. Interacting with a Russian soldier guarding the border is also banned. This makes untangling a line nearly impossible. An angler who steps into Russia is likely to be caught on security cameras and fined €1,000. The cameras, hidden in the woodland, catch other drifters, too—moose, eagles, foxes—but they are free to come and go. So are the fish that frequent these waters.

To salmonids swimming from the ocean, the Grense Jakobselv is not a border but an invitation. With clean, free-flowing water, plenty of fly larvae to eat, and loose gravel for nesting, laying eggs, and broadcasting sperm, the river is classic salmonid habitat.

Traditionally, Norwegians have fished the Grense Jakobselv for Atlantic salmon, an iconic species in northern Europe. Over 10,000 years ago, this piscine Pied Piper coaxed some of Europe’s earliest inhabitants north from river to river, promising protein and power—irresistible lures as the climate changed and ecological boundaries shifted. Most populations of Atlantic salmon have nearly vanished across the fish’s southern range, from Spain to the southern Baltic states. They retain a hold in the north, especially here in Finnmark, Norway’s most northeasterly county, through which the Grense Jakobselv flows....

....MUCH MORE

Previously, July 8, 2021 - "Alarm bells ringing for Atlantic salmon. An invasive species from the Pacific appears to take its place"
Don't be deliberately introducing invasive species....

Possibly also of interest:

• "Is Farmed Salmon Really Salmon?"
• "The Fishing Revolution and the Origins of Capitalism"

And in other invasive species news: 

Arctic King Crabs Have Conquered The Barents Sea; May Head For the UK Next 

Those King crabs will have to deal with the English thug crabs and their knife-play.

"US Weighs Google Breakup in Historic Big Tech Antitrust Case" (GOOG)

I would like YouTube please, there's an entire non-literate addressable market for Climateer Investing to conquer.

From Bloomberg via MSN, October 9: 

The US Justice Department is considering asking a federal judge to force Google to sell off parts of its business in what would be a historic breakup of one of the world’s biggest tech companies. 

Antitrust enforcers are weighing a breakup to mitigate the Alphabet Inc. business’s dominance in search, the agency said in a court filing on Tuesday, confirming an earlier Bloomberg News report. Judge Amit Mehta could also order Google to provide access to the underlying data it uses to build its search results and artificial intelligence products, it said.

The Justice Department “is considering behavioral and structural remedies that would prevent Google from using products such as Chrome, Play, and Android to advantage Google search and Google search-related products and features,” the agency said.

The 32-page document lays out a framework of potential options for the judge to consider as the case moves to the remedy phase. The agency said it will provide a fuller proposal on remedies next month. 

The effort is the most significant move to rein in a major tech company over illegal monopolization since Washington unsuccessfully sought to break up Microsoft Corp. two decades ago. The Justice Department and the US Federal Trade Commission have targeted Big Tech dominance, scrutinizing deals and investments and accusing some of the country’s most powerful companies of illegally dominating markets....

....MUCH MORE

If interested see also:

2019 - Valuing, Disaggregating (and perhaps dismembering) Alphabet (GOOG)

2020 - Omidyar "Roadmap for a Digital Advertising Monopolization Case Against Google" (GOOG; PYPL; EVIL)

"US Considers a Rare Antitrust Move: Breaking Up Google" (GOOG)

"All the possible ways to destroy Google’s monopoly in search" (GOOG)

If the Federales play hardball it will look something like this:
"To Break Google’s Monopoly on Search, Make Its Index Public" (GOOG)
Treat them like the utilities they are....

What Is an Effective Remedy in the Google Search Case? (GOOG; EVIL)

Dismemberment.

And then, when you're done with the officers and directors... 

Okay, just kidding. The most logical remedy is to regulate search as a public utility. And if they push back against that, dismemberment.

I have to stop reading medieval history before going to sleep at night.

How's about we rip the company's index from the still-living beast and...

That's it, from now on it's Pollyanna with her 'glad game.' And Candide. And maybe Leibniz.

2018 - "Google.gov"

Google.gov

Amid growing calls to break up Google, are we missing a quiet alignment between “smart” government and the universal information engine?

by Adam J. White

"How Bookies Pick the Literature Nobel, Without Actually Reading"

A repost from September 30, 2013:

From the Atlantic Wire:

How exactly can author Haruki Murakami be the odds-on favorite to win the Nobel Prize in Literature if his book is only available in Japanese? For the most accurate Nobel oddsmaker Ladbrokes, reading the books is irrelevant — and the bookies openly made the prediction without any intentions to do so.

Given the Swedish Nobel Committee's intense secrecy, discussion of the future winner is active and open for debate among prognosticators. But they should just look to Ladbrokes, which has correctly predicted the Nobel Prize winner with 50 percent accuracy over the past eight years, according to the Boston Globe, making it far more accurate than most pundits or literary critics.

The secret to their success? Psychology. Most reporters writing on the coming Nobel decision are what one popular betting site's spokesman calls "lazy journalists," and they like to cite the bookies' odds — such as 3/1 favorite Haruki Murakami (right) — in their early stories on potential winners (guilty as charged). But by setting the early terms of the debate, Ladbrokes and other oddsmakers create a bandwagon-type effect where the bettors' favorite becomes the actual favorite. And this effect then builds its way up to the pundits and, potentially, to the Committee itself....MORE

"Who died and left the US $7 billion?"

From Robbinhood's Sherwood News, October 7:

It was the biggest estate-tax payment in modern history, but no one knew who made it. Then an anonymous phone call pointed to one man.

Billionaires are like black holes. We deduce their existence from the fundamental laws of capitalism, see their gravity pull politics into their orbit, even detect signals of their existence in the public markets.

Determining exactly how rich anyone really is, though, can be a fool’s errand. The most profound revelation in Thomas Piketty’s era-defining “Capital in the Twenty-First Century” wasn’t that we were experiencing Gilded Age levels of inequality, but his argument that Forbes’ list of the ultrawealthy isn’t accurate — and we don’t really know the billionaires living among us, or the extent of their wealth.

Last year, observers with the economic equivalent of a radio telescope detected a radiating anomaly on the February 28, 2023, daily balance sheet of the US Treasury Department: a $7 billion estate- and gift-tax payment. 

John Ricco, now an analyst at Yale University’s Budget Lab, first spotted the huge receipt while trying to answer a somewhat macabre question: how did senior-citizen deaths from Covid affect government revenues? (Quite a bit — high mortality and the frenzied pandemic stock market more than offset the Trump administration’s tax cuts.)

He was struck, though, by the appearance of that enormous deposit. “The degree by which this payment exceeds others in modern history — it’s not just, ‘Oh, this was the biggest one by 20%,’” Ricco said later. This was the biggest one by a factor of seven.

The data wasn’t erroneous, Treasury officials found, who are legally forbidden to discuss tax filings. But it was a mystery. Who died? And why didn’t they hire better tax attorneys?....

....MUCH MORE

The Tech Unheard Podcast, Episode 1: Nvidia's Jensen Huang (NVDA)

From Tech Unheard, October 9:

Summary

In the first episode of Tech Unheard, Arm CEO Rene Haas, sits down with Jensen Huang, the Founder, President and CEO of NVIDIA. In this unfiltered conversation between two long-term colleagues and friends, the episode dives into Jensen’s journey as the Founder of one of the world’s largest technology companies, as well as exploring the future of AI and how NVIDIA’s unique culture of relentless innovation and ambition continues to push the boundaries of technology.

The Tech Unheard podcast series takes listeners behind the scenes of the most exciting developments in technology, with Rene talking with some of the brightest minds in the industry to share insights, stories and a vision for what lies ahead.

Transcript

[music comes in]

Rene:[0:00]

Welcome to Tech Unheard, the podcast that takes you behind the scenes of the most exciting developments in technology. I’m Rene Haas, CEO of Arm. At Arm we’re shaping the future of computing with the industry’s most powerful and energy-efficient compute platform designed to unlock the full potential of AI. Our technology is at the core of innovation for leading companies across the globe. In this podcast, I’ll be sitting down with some of the brightest minds in the industry to share insights, stories and vision for what lies ahead.

Today, I have the privilege to speak with Jensen Huang, the CEO of NVIDIA. A true visionary, my former boss and a personal mentor of mine. We’re going to dive into his journey, the future of AI and how NVIDIA’s unique culture of relentless innovation and ambition continues to push the boundaries of technology. We sat down and met at NVIDIA’s headquarters in Santa Clara to talk.

[music crescendos and then fades out]

Rene:[1:02]

Ready to go?

Jensen:[1:03]

I was ready the moment I walked in.

Rene:[1:05]

It’s great to be back.

Jensen:[1:06]

Well, thank you. Yeah, it’s great. It’s great to see you.

Rene:[1:08]

It’s great to be back here at NVIDIA. This building did not exist when I worked here many, many years ago.

Jensen:[1:14]

How many? How many years ago now? 20? (When you first started?)

Rene:[1:17]

I started in 2006. I left in 2013.

Jensen:[1:21]

Yeah, see? 20 years.

Rene:[1:22]

Yeah. 20 years ago. These buildings did not exist. It’s a, it’s a nice feeling to be back, though.

Familiar. Thanks for, thanks for spending the time.

Jensen:[1:27]

Thanks for having me.

Rene:[1:28]

So now that you’ve grown so large, one of things I’ve always been curious about, Jensen, with NVIDIA is hiring. The culture is one of a kind. The company does things in a one-of-a-kind way. How do you identify folks who are going to be successful inside NVIDIA?

Jensen:[1:42]

We’re not always successful in doing that. Look how you turned out. [laughter] That’s [laughter] it’s always a shot in the dark. I think that the interview process is not an excellent way to judge whether somebody is a good fit. I mean, obviously, everybody could pretend to have a very constructive conversation. You could learn a lot from just watching YouTube on how to interview. And so, you know, the technical questions, of course, people even share what NVIDIA technical questions are. And we try to be as rigorous and difficult as possible. But – but it’s hard. I think that my method is always I go back to reference checks, you know, and I ask them the questions that I was going to ask the candidate. And the reason for that is you could always make make for a great moment, but it’s hard for you to run away from your past. And so I think those are good. I like asking one in-depth question  and just thinking about how they reason through it.

But I think in the final analysis, NVIDIA has been successful for a lot of people. Our attrition rate’s very low, as you know. And and so it’s a really diverse environment with a lot of really interesting people in the background. And we have people from from just about every great company in the world and somehow, we’ve made them successful here. And so I think that that on the one hand, building a great company is about getting great people. On the other hand, building a great company is really about creating the conditions by which those people could do even better than they thought they could. And, you know, a lot of that has to do with being transparent about explaining what NVIDIA’s vision and strategy and what makes us work. As you know, I spent a lot of time doing that. And our company has always been known for its transparency about explaining what what challenges we have, what opportunities we have, what strategies we’re executing. And information is flowing fairly readily inside the company with respect to, you know, what is it the company’s strategies are. I always find that it’s strange when companies have too many silos and, you know, need to know basis. I think obviously, you know, people don’t need to know what they don’t need to know. But the more that they know, the more they’re empowered to be able to make good decisions on our behalf. And so I try to err on the side of transparency. I try to err on the side of empowering people.

And as a result, you know, the company is one of the, I think we’re the smallest large company in the world....

....MUCH, MUCH MORE

HT: Barron's "Jensen Huang on the Future of AI and Nvidia’s Biggest Advantage"

I think I need some of that "music crescendos and then fades out." I tried entering rooms with a horn fanfare but it always seemed to just hang in the air. Need a fade.

Capital Markets: "CSI 300 Drops 7%, Oil Steadies, and the US Dollar Remains Firm"

From Marc Chandler at Bannockburn Global Forex:

Overview: We suspect the market overreacted to the US jobs data, which was tainted by the lowest "establishment" response in over two decades and seasonal adjustments were likely thrown off by Hurricane Helene and the 33k strike at Boeing. We think Fed officials, and more speak today, have confirmed that it was not the game changer than many market participants think, which was likely influenced by positioning. It did help facilitate the dollar's upside correction we had been looking for. The greenback is firm today. Sterling made a marginal new low, while the euro retested $1.0950. The Reserve Bank of New Zealand's 50 bp cut took the New Zealand dollar down nearly 1%, though it was well anticipated. Only the Swiss franc is holding its own today among the G10 currencies. Emerging market currencies are mixed. Central European currencies are the heaviest, while a few Asia Pacific currencies and the Mexican peso are posting small gains.

Mainland Chinese shares fell hard today, with the CSI 300 dropping a little more than 7%. Finance Minister Lan Fo'an will hold a briefing on Saturday to ostensibly introduce moves to strengthen fiscal policy. Mainland shares that trade in HK fell by about 1.6%. Most of the large markets in the region, except for China and South Korea, traded higher. There are some reports that North Korea may send troops to help Russia in Ukraine. Europe's Stoxx 600 is firm, while US index futures are trading with a heavier bias. European 10-year yields are mostly 1-2 bp softer. The 10-year US Treasury yield is firm, near 4.02%. Gold is consolidating yesterday's losses, spending most of the session so far below yesterday's settlement near $2622. November WTI is trading quietly today (~$73.55-$74.45) after yesterday's large swing (~$78.45-$72.70, settling near $73.55).

Asia Pacific...

....MUCH MORE

"French brandy makers sacrificial lambs in China-EU trade war"

From Asia Times, October 9:

Pundits: France must pay heavy price for its crucial role in the European Union’s electric vehicle tariff action  

China has decided to impose a provisional anti-dumping tariff on brandy imported from the European Union after the bloc voted for the imposition of a 7.8-35.3% tariff on Chinese electric vehicles. 

The Chinese Ministry of Commerce said in a statement on Tuesday that it had reached a preliminary conclusion on August 29 that the brandy imports from the EU were being dumped in China’s market, posing a threat of substantial harm to the domestic industry. 

It said the new tariffs will be imposed in the form of cash deposits, effective from Friday. The deposit rates are set at between 30.6% and 39%.

It stressed that the decision was made after it conducted an anti-dumping investigation against the EU’s brandy in accordance with Chinese laws and regulations, as well as the rules of the World Trade Organization (WTO).

It also said the anti-dumping and anti-subsidy probes into imports of pork and dairy products from the EU are still ongoing. It said it will make an objective and fair judgment after the investigations to ensure that all parties’ interests are fully protected....

....MUCH MORE

"Chinese Stocks Tumble as Stimulus Skepticism Keeps Bulls at Bay"

The CSI 300 is currently down 229.50 (-5.39%) on the day. 4,026.59 last I saw.

From Bloomberg via Yahoo Finance, October 8/9:

Chinese stocks listed onshore headed for their first decline in 11 days as traders grow impatient with the pace of Beijing’s stimulus measures, with sentiment also hurt by weak holiday-spending data.

The benchmark CSI 300 Index slid as much as 7.4%, wiping out its gain of 5.9% amid frenzied trading on Tuesday when mainland markets reopened after the Golden Week holiday. An index of Chinese stocks listed in Hong Kong fell further after tumbling 10% on Tuesday.

Enthusiasm over a stimulus-driven equity surge is cooling after the lack of any further major initiatives at a key policy meeting Tuesday disappointed investors. A growing number of strategists and fund mangers have expressed skepticism, saying Beijing needs to back up its spending pledges with real money, while some others have cautioned the rally has gone too far too fast as benchmark indexes surged over 30% in a matter of days.

“The market is tussling between expectation for more stimulus and economic realities,” said Yi Wang, head of quantitative investment at CSOP Asset Management Ltd. “Investors want to see a quick translation from stimulus measures into improving corporate earnings, better macro data — whether that’s with inflation, employment or local government debt. But there is a time gap between that expectation and the economic reality.”

Investors are starting to worry the rapid rebound in Chinese stocks since late September may prove to be yet another false dawn unless Beijing announces a strong fiscal package that can revive consumption and support the property sector....

....MUCH MORE

As noted September 30: 

....Plus, with the long holiday coming up things will be quieter, unless we do a pivot to Chinese travelers and the places they are going. As a side note, for whatever reason, big moves in the Chinese markets in the run-up to major holidays don't tend to follow-through after holiday contemplation and reflection on what's what.

Nvidia Focuses On Software, Energy Efficient Chips At Washington D.C. Summit (NVDA)

The software is one of the areas that NVDA uses in their total-cost-of-ownership pitch.
It is also one of the areas the antitrust people focus on because they can liken it to Microsoft bundling a browser with the operating system. 

Mr. Huang and just as importantly his corporate and outside attorneys know this is an area in which the company is vulnerable and is the reason Nvidia chose to go with an answer to the administrative state that I had never heard used before: Be Not Afraid. That's enough inside baseball for now, more after the jump.

From Bloomberg, October 8:

Nvidia Touts Energy Efficiency of Chips at Washington Summit

• The AI computing boom has drawn concerns about power use
• Nvidia also highlights its progress in developing software

Nvidia Corp., facing concerns about the electricity demands of artificial intelligence computing, touted the energy efficiency of its latest chips at a conference Tuesday in Washington.

The company’s Blackwell chips, which are beginning to roll out to customers this year, would need 3 gigawatts of power to develop OpenAI’s GPT-4 software, Nvidia said at an event called the AI Summit DC. Ten years ago, that process would have required 5,500 gigawatts, the chipmaker said.

“Our Blackwell platform is basically built with energy efficiency in mind,” Nvidia Vice President Bob Pette said at a briefing ahead of the event.

The Santa Clara, California-based company also pointed to its headway in software. That includes producing “agent blueprints” that will let businesses rapidly deploy customized AI services. Agents are pieces of software that handle real-world tasks, such as dealing with customer requests, aiding in the design of a device or speeding up drug discovery.

Nvidia shares gained as much as 4.1% to $132.92 on Tuesday. The stock has more than doubled this year, following a 239% rally in 2023.

Though Nvidia has been the single biggest beneficiary of the AI spending boom, much of its revenue comes from a small group of data center makers and operators. The company said it’s “leading the charge” to spread the use of the technology to more areas, setting the stage for what it sees as a new industrial revolution.....

....MUCH MORE

If interested see also:

• Nvidia Q2 2025 Earnings Call Transcript, August 28, 2024 (NVDA)
• "AMD’s AI Plan: The Nvidia Killer or a Wasted Effort?" (AMD; NVDA)
• "How Nvidia Is Building A Competitive Moat To Fend Off AI Challengers" (NVDA)

Morgan Stanley On Nvidia: Blackwell Chip Production Ramp-Up (NVDA)

 From TheStreet,com, October 8:

Analysts update outlook for Nvidia's Blackwell chips amid AI boom
Nvidia's new Blackwell processors, a key development in the AI tech race, will soon be a big driver of profit growth.

....Morgan Stanley analysts, in a note published Tuesday, were upbeat on Blackwell's potential impact on the group's top line heading into the final months of the year.

"According to our checks of the GPU-testing supply chain, Blackwell chip output should be around 250,000-300,000 in [the fourth quarter], contributing $5 billion to $10 billion in revenue, which is still tracking [Morgan Stanley lead analyst] Joe Moore's bullish forecast."

The note also suggested that Blackwell production would soon outpace that of Nvidia's legacy Hopper chips, perhaps as early as the start of next year.

"Blackwell chip volume may reach 750,000 to 800,000 units, up almost 3 times from [the fourth quarter]," the investment bank said.... 

....MUCH MORE

With a few minutes to the open of the regular session the stock is at $130.11 up $2.39 pre-market.

Batteries: "Northvolt says subsidiary files for bankruptcy after project pulled"

So far it's compartmentalized but the parent company is also facing financing and sales problems, more after the jump.

From Reuters, October 8:

Sweden's Northvolt said on Tuesday that one of its subsidiaries had filed for bankruptcy after the project it was developing was cancelled, while the rest of the cash-strapped battery making group continued to consolidate operations.

"All contacts with Ett Expansion AB will from now on be managed by the bankruptcy trustee," Northvolt said.

The Northvolt unit had been responsible for a planned tripling of capacity at the group's gigafactory in northern Sweden, but its board last month cancelled the project.

 

Northvolt said in September it would slim down and cut jobs, sparking fears that Europe's best shot at a home-grown electric vehicle battery champion may stall due to production problems, sluggish demand and competition from China.

 

"Northvolt Group continues to be in dialogue with stakeholders for continued cooperation within Northvolt Group's ongoing operations," the company added in a statement....

....MUCH MORE

Also at Reuters, October 2 - "Northvolt's $1.5 billion funding guarantee on hold, Swedish debt office says"'

Bloomberg, October 2 - "BMW Rules Out Investing in New Northvolt Funding Round"

And via Yahoo Finance, October 5 - "Northvolt’s Funding Travails Hit Battery Projects from Germany to Canada"

Finally Forbes, October 5 - "Sweden’s Environmental Minister Reiterates No Bail Out For Northvolt"

There was a reason we titled September 5's post "Portents" - "Portents: Sweden's Northvolt may postpone $5bn Quebec battery plant by up to 18 months". It was a sign of things to come, including September 25's Batteries: "Sweden’s Northvolt to Cut 20% of Staff Amid Liquidity Crunch"

"Iron ore stocks fall after China does not offer new stimulus package"

 From Australia's Capital Brief, October 8:

The news: Iron ore stocks lowered on the ASX as a briefing by China's economic agency failed to provide new stimulus announcements.

The numbers: Materials was the worst performing sector by 1:40pm AEDT, down 2.36%, reversing earlier gains.

Fortescue (-2.2%), Champion Iron (-1.9%) and BHP (-0.5%) were trading lower.

However, fellow iron ore miner Rio Tinto climbed 0.7%, following confirmation that it had approached Arcadium Lithium for a potential acquisition.

Iron ore futures were down 2.4% to US$108.14 ($160.59) in Singapore, having risen more than 3% earlier in the session.

The context: Chinese stocks and iron ore futures soared ahead of a press briefing by China’s top economic planner, as investors braced for new stimulus measures.

However, the chair of China's National Development and Reform Commission (NDRC), Zheng Shanjie, did not offer any new initiatives further to the slew of new growth announcements made over the last fortnight....

....MUCH MORE

The Shanghai - Shenzhen CSI 300 is also giving back some of its earlier gains, currently up 5.29%.

"Chinese Stocks Surge on Return From Holidays as Euphoria Extends"

 Two from Bloomberg. First up the headliner, October 7:

• Benchmark CSI 300 Index jumps as onshore markets reopen
• Gauge of Chinese stocks in Hong Kong drops after recent rally

Chinese stocks listed onshore jumped as trading resumed following a week-long holiday, with encouraging home sales and consumption data giving fresh impetus to a rally sparked by Beijing’s stimulus blitz.

The benchmark CSI 300 Index climbed almost 11% in early trading before paring its advance. The measure had gained for nine straight sessions through Sept. 30 before heading into the Golden Week break. In Hong Kong, a gauge of Chinese shares slid 4.3% after having rallied almost 11% in the period that onshore markets were shut.

Sentiment toward Chinese equities has seen a dramatic turnaround since late-September as the authorities unveiled a range of supportive measures that included interest-rate cuts, freeing-up of cash for banks and liquidity support for stocks. Wall Street heavyweights including Goldman Sachs Group Inc., HSBC Holdings Plc and BlackRock Inc. have upgraded the once-beaten down stock market amid bets of further stimulus.

China’s top economic planner said it will hold a press briefing Tuesday morning to discuss a package of policies aimed at boosting economic growth.

“The durability of this China rally will depend on action following words on the fiscal side of the equation,” said Aleksey Mironenko​​​​, global head of investment solutions at Leo Wealth in Hong Kong. “The key thing we are watching going forward — what policies will be announced in coming weeks following the Politburo and State Council statements? That will determine if our overweight is a tactical one — to be taken off as relative valuations change – or a strategic one.”....

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Elsewhere in Asia markets are lower: 

Nikkei 225

38,928.41 –1.03%

Hang Seng Index

22,169.23 –4.03%

Shanghai Shenzhen CSI 300 Index

4,331.66 +7.81%

S&P/ASX 200

8,202.50 –0.04%

BSE SENSEX

81,050.00 –0.78%

Korea Stock Exchange KOSPI Index

2,589.27 –0.81%

Related October 2 - "China’s sudden stock rally sucks money from rest of Asia"

And back to Bloomber October 7:

Mark Mobius Sees More Upside for China Stocks on Growth Support

Mark Mobius said the rally in Chinese stocks may continue if policymakers continue to roll out measures to support the market.

“The bearish sentiment has already been broken so we can expect a continued bullish market,” Mobius, chairman of Mobius Emerging Opportunities Fund, said in an email on Monday. How long the rally can continue will depend on “government measures to increase liquidity available for the market,” he said.

The 88-year-old money manager turned bullish on Chinese equities earlier this year, as the government rolled out measures to support the property sector. The country’s stocks have skyrocketed since late September, after Beijing unveiled fresh stimulus measures that included interest-rate cuts and liquidity support to boost the economy....

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I'm thinking the briefing from the National Development and Reform Commission referenced in the first story could stir up the emotions, fear, greed etc.

Hurricane Milton Maximum Sustained Winds 180 MPH

The two measures of hurricane intensity are how high the wind speed gets and how low the central pressure gets. Here's the latest from the National Hurricane Center, they use the time zone where the storm is located, in this case Central Daylight Time:

...CENTRAL PRESSURE IN THE EYE OF MILTON HAS FALLEN TO A NEAR RECORD LOW... ...MILTON POSES AN EXTREMELY SERIOUS THREAT TO FLORIDA AND RESIDENTS ARE URGED TO FOLLOW THE ORDERS OF LOCAL OFFICIALS... 

7:00 PM CDT Mon Oct 7
Location: 21.9°N 90.4°W
Moving: E at 10 mph
Min pressure: 897 mb
Max sustained: 180 mph

Anything below 900 millibars is an extremely strong storm.

As for wind speeds, most of the cyclone records are for the Pacific where storms from the west coast of the Americas to the date line are called hurricanes and  cyclones from the date line to Austral-Asian landmasses are typhoons.

The physics of the kinetic energy at various wind speeds: A doubling of the wind speed results in a 2³ or eight fold increase in the energy the wind is carrying. Number go up. Fast. 

Three doublings from 25 to 200 mph means you are dealing with 512 times greater power than you face at a reasonably brisk 25mph.

Some storms worthy of note. First, Hurricane Patricia on Mexico's Pacific coast in 2015 (headlines as they appeared on the blog):

• The National Hurricane Center Calls Patricia "THE STRONGEST EASTERN NORTH PACIFIC HURRICANE ON RECORD."
• "Stunning, historic, mind-blogging, and catastrophic: Hurricane Patrica Hits 200 mph"
• The Astonishingly Light Damage Caused By Hurricane Patricia

Patricia's max. sustained wind speed eventually reached 215 MPH just before landfall.

....The second story linked to the now sadly deceased Wunderblog—which was replaced at WeatherUnderground by the Category 6 blog [on blogroll at right], hence my blather up top—Wunderblog who noted:

....Patricia the third strongest tropical cyclone in history (by wind) 

Patricia's 200 mph sustained winds make it the 3rd strongest tropical cyclone in world history (by 1-minute averaged wind speed.) Officially, here are the strongest tropical cyclones in world history, according to the Joint Typhoon Warning Center and the National Hurricane Center (using 1-minute averaged sustained winds): 

Super Typhoon Nancy (1961), 215 mph winds, 882 mb. Made landfall as a Cat 2 in Japan, killing 191 people. 

Super Typhoon Violet (1961), 205 mph winds, 886 mb pressure. Made landfall in Japan as a tropical storm, killing 2 people. 

Super Typhoon Ida (1958), 200 mph winds, 877 mb pressure. Made landfall as a Cat 1 in Japan, killing 1269 people 

.Super Typhoon Haiyan (2013), 195 mph winds, 895 mb pressure. Made landfall in the Philippines at peak strength. 

Super Typhoon Kit (1966), 195 mph winds, 880 mb. Did not make landfall. 

Super Typhoon Sally (1964), 195 mph winds, 895 mb. Made landfall as a Cat 4 in the Philippines. 

However, it is now recognized (Black 1992) that the maximum sustained winds estimated for typhoons during the 1940s to 1960s were too strong. The strongest reliably measured tropical cyclones were both 10 mph weaker than Patricia, with 190 mph winds—the Western Pacific's Super Typhoon Tip of 1979, and the Atlantic's Hurricane Allen of 1980....

Super Typhoon Tip is also notable for its size:

Those Pacific Ocean storms  can get pretty big-
Here's 1979's Super Typhoon Tip:

The relative sizes of the United States, Typhoon Tip and Cyclone Tracy (the largest and smallest Pacific tropical cyclones recorded, respectively)

About half the size of the contiguous United States.

And although it didn't make the sustained wind leaderboard in 1996 Severe Tropical Cyclone Olivia had a wind gust measured at 253mph, the world record non-tornadic wind speed.  

More on the Atlantic/Gulf of Mexico records tomorrow but for now a tweet from last year when Hurricane Lee was forecast to reach 180 MPH wind speeds (it didn't, topping out at 165 MPH)

...And from one of the hurricane bigwigs, Colorado State University's Phil Klotzbach

#Hurricane #Lee is forecast to reach a max intensity of 180 mph. Only seven Atlantic hurricanes in satellite era (since 1966) have had max winds >= 180 mph:

Allen (1980), Gilbert (1988), Mitch (1998), Rita (2005), Wilma (2005), Irma (2017), Dorian (2019) pic.twitter.com/P5HOUDFMb3

— Philip Klotzbach (@philklotzbach) September 8, 2023

Pro-Hamas Demonstrators Need To Up Their Game; Work On Chants

From Mediaite via MSN, October 7:

Anti-Israel Protesters at Columbia University Chant ‘Resistance Is Glorious’ on Anniversary of October 7

Anti-Israel protesters on Columbia University’s campus celebrated the anniversary of the October 7 terrorist attack on Israel by chanting “Resistance is glorious!” among other slogans on Monday.

On X, Jessica Costescu, a reporter for The Washington Free Beacon, documented a large crowd of protesters screaming slogans that included “One solution! Revolution!”and “Resistance is glorious! We will be victorious!”– as well as demanding that the university divest from the world’s only Jewish-majority state....

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Sure they have something of a rhyme but no meter, no beat.

The Hamasniks, besides showing Columbia to be maybe not as good a school as is sometimes  claimed, are doing little more than giving me a reason to show a prescient cartoon from Garry Trudeau:

Doonesbury by Garry Trudeau for January 24, 1974 

Cop: Pretty disorganized, huh?
Mark: You said it! These poor guys are such rank amateurs!
Cop: Not like the old days, eh, long-hair...?
Mark: No way, officer...

"Generac Stock Gets A Category 5 Breakout" (GNRC)

There's always a trade.

As we've mentioned over the years GNRC is one of those stocks plugged into the algos so the computers don't even have to think beyond "If the initial conditions are X. the course of action is Y" Here's an introduction from last year:

Generac, THE Go-To Natural Disaster Stock Reports Earnings, Shares Crumble (GNRC)

Come hell-or-high-water (also hurricanes, tornadoes, blizzards, earthquakes etc.) Generac is the stock that risk managers and speculators think of first. So, with no landfalling hurricanes (yet) and tornadoes almost exactly on the 50th percentile line*, sales declined....

And from Investor's Business Daily, October 7:

Generac (GNRC) is Monday's IBD Stock Of The Day, as Hurricane Milton grows into a Category 5 storm, heading for Florida just days after Hurricane Helene ripped through the Southeastern U.S. Generac jumped into a buy zone Monday following an upgrade and is flashing some bullish signals.

OTR Global upgraded the Waukesha, Wis.-based Generac with a positive rating, up from mixed, on Monday. The firm cited research that shows that third-quarter U.S. residential sales of standby generators increased on a dollar basis vs. a year ago. The 2024 outlook is for continued growth.

Meanwhile, Hurricane Milton rapidly intensified on Monday. The National Hurricane Center expects Milton to weaken before hitting Florida's west coast on Tuesday or Wednesday. Hurricane Milton was a Category 1 storm late Sunday but has quickly strengthened in recent hours

Reading The Generac Stock Chart
Generac stock tends to swing higher during natural disasters as people and agencies rush to purchase generators. It surged 7.8% to 172.59 during Monday's stock market action. That put shares in a buy zone above a 169.57 buy point, according to MarketSurge charts.

The breakout received affirmation from the stock's relative strength line, which broke to a 52-week high alongside the move past the buy point. This is a bullish corroboration....

....MORE

The stock is up $13.77 (+8.60%) at $173.95 after earlier trading to a new 52-week high two year high of $174.35.

Our most recent post on GNRC was August 2, 2024's "UPDATED—With Six Weeks To Peak Hurricane Day (Sept. 10) A Chance To Own The Risk Manager's Go To Disaster Equity, On Sale (GNRC)" with the stock at  $141.0.

On the short side reinsurer RenRe is getting hit for an almost equal but opposite -8.58% (-23.99) to $255.70. If I remember to post we will have an explanation for why the insurers/reinsurers get hit when the fear is wind damage versus when it is flooding damage.

"...MILTON RAPIDLY INTENSIFIES INTO A CATEGORY 5 HURRICANE..."

Current maximum sustained winds 155 mph with quite a bit of warm water to cross before landfall. From the National Hurricane Center:

Advisories and discussions.

"US Supreme Court rebuffs Uber, Lyft bid to avoid California driver suits" (UBER; LYFT)

We've been tracking these issues, in various jurisdictions, for quite a while.

From Reuters, October 7:

• Companies accused of misclassifying drivers as contractors
• Uber and Lyft appealed lower court ruling against them

Oct 7 (Reuters) - The U.S. Supreme Court declined on Monday to hear a challenge by Uber (UBER.N) and Lyft (LYFT.O) to lawsuits by the state of California on behalf of drivers who signed agreements to keep legal disputes with the ride-hailing companies out of court in a legal fight over their status as contractors.

 

, opens new t

, opens new ta

The justices turned away appeals by the two companies of a lower court's ruling that let the Democratic-led state's attorney general and labor commissioner pursue claims that Uber and Lyft owe money to drivers who were misclassified as independent contractors rather than employees....

....MUCH MORE

 

Quite a while. 

Ahead Of The Robotaxi Unveiling: "Why Tesla’s Wall Street Valuations Are All Over the Place" (TSLA)

 From Barron's, October 6:

The company makes electric vehicles, has an energy storage business, and invests in artificial intelligence. That makes figuring out what its stock is worth difficult.

Even some begrudging bears will admit Tesla is more than a car company.

It makes electric vehicles, has a fast-growing energy storage business, and invests in artificial intelligence for applications such as self-driving cars and humanoid robots.

The potential is huge—and makes figuring out what Tesla stock is worth difficult.

In a Tesla-like situation, investors can turn to a sum-of-the-parts, or SOTP, analysis, which tries to value each of the businesses separately and add them together to arrive at a valuation for the whole. Typically, SOTP valuations rely on valuation multiples from similar companies to help with the process.

There are many SOTP valuations for Tesla stock floating around the Street. Reading them all at once, frankly, is mind-bending. They still can help frame the Tesla valuation debate, though.

Starting with EVs, analyst valuations for Tesla’s auto business range from $40 billion, less than either Ford Motor or General Motors , to $660 billion, more than two times Toyota Motor . (Those two are from analysts who rate Tesla stock Buy.)

Part of the problem is how analysts slice and dice the car business—some include revenue from Tesla’s EV charging network and recurring sales of Tesla’s full self-driving software.

Wall Street doesn’t agree on how many cars Tesla will sell, either. Analysts project roughly four million to eight million by 2030. Tesla is expected to sell about 1.8 million in 2024.

Valuation multiples vary, too. Some analysts value the car business using Apple ’s multiple. Apple, like Tesla, sells hardware, software, and services to a loyal customer base—but car stocks typically don’t trade like Apple does. Apple shares trade for about 30 times estimated 2025 earnings. Ford stock trades for six times.

The number of variables and valuations is a reason why Future Fund Active ETF co-founder and Tesla shareholder Gary Black doesn’t like SOTP models.

He prefers to project earnings per share and used a valuation multiple based on how fast Tesla earnings are expected to grow. Stocks in the S&P 500 typically trade for about two times their EPS growth rate. With S&P 500 earnings expected to grow close to 10% in the coming years, the PE ratio is 20 times.

With that thinking, Tesla’s car business could be worth $100 a share. That is based on earning $5 a share from cars in 2030 by selling about five million EVs.

That is only one part of the problem for Tesla. There is still the rest of the company to value. Tesla’s energy storage business is booming. The company deployed 6.9 gigawatt hours of battery storage in the third quarter, enough to power some 700 U.S. homes for a year, up about 73% compared with the third quarter of 2023.

Street valuations for the energy storage business range from $50 billion to $150 billion. For context, power generation equipment supplier GE Vernova and renewable power generating giant NextEra Energy are valued at roughly $70 billion and $170 billion, respectively.

Then there are the nascent AI businesses. Everyone on the Street agrees robotaxis could be huge, but Tesla hasn’t completed a single driverless cab ride. Tesla is also using AI to train labor-saving humanoid robots.

Cathie Wood’s ARK Invest values self-driving technology at about $4 trillion and projects Tesla will be generating some $240 billion in robotaxi earnings before interest, taxes, depreciation, and amortization, or Ebitda, by 2029.

That is the highest estimate out there by a mile. “It’s a supply model,” Black says. “It doesn’t consider demand uptake.”....

....MUCH MORE

Our thoughts on the robotaxi, last seen in October 2's "Tesla sinks as Q3 deliveries fall short" (TSLA)":

...Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?....  

For what it's worth the deliveries "miss" was

...Tesla reported 462,890 deliveries and 469,796 vehicles produced in Q3 2024. Analysts, based on FactSet StreetAccount estimates, had expected 463,310 deliveries for the quarter ending September 30. 

Missed it by 420 vehicles.

Which could be Musk doing the "420" thing again. 

Just kidding. In late pre-market the stock is down 19 cents at $249.89 after closing $9.42 (+3.91%) higher on Friday.

Hurricane Milton Is Now At Category 3 (winds above 110 mph)

 From the National Hurricane Center:

 Special Advisory products have been issued.  Use links below for details.

Hurricane Milton Public Advisory

Hurricane Milton Forecast Advisory

Hurricane Milton Forecast Discussion

Rainfall Forecast (from the Weather Prediction Center)

Iran's Ayatollah Ali Khamenei Gave His First Sermon In Nearly 5 Years.

First up, from Visigrad 24:

Dictator and Ayatollah Ali Khamenei gave his first sermon yesterday in nearly 5 years.

He stated:

“God willing, we will destroy Israel.”

Western policy makers should note that he didn’t say “God willing, we will have a two-state solution” pic.twitter.com/rmXN92MJMo

— Visegrád 24 (@visegrad24) October 5, 2024

Here's a picture from a different angle:

Khamenei gave a sermon at Friday prayers in Tehran while holding a gun pic.twitter.com/wO8j9hrRl5

— Christian Henderson (@CjvHenderson) October 4, 2024

Related June 26 and September 18:

Reminder: "War Between Israel and Iran Is Inevitable"

Following on the double humiliation of the assassination of Hamas' Ismail Haniyeh in his Tehran guest house in July and the attack of the pagers yesterday, over 3000 wounded from another Iranian proxy Hezbollah, and including the now blind Iranian ambassador to Lebanon, Mojtaba Amini, a repost from June 26:

Just as the Jews mean it when they say "Never again," The Iranians mean it when they say they will destroy, annihilate, eradicate Israel. Some examples after the jump....

Capital Markets: "US Rates Extend Gains to Fray 4%"

From Marc Chandler at Bannockburn Global Forex:

Overview: The stronger than expected US jobs report triggered a 20 bp jump in the US two-year yield and sent the greenback broadly higher. The market slashed the probability that the Fed would cut by 75 bp in Q4. There are now slightly less than 50 bp discounted in the Fed funds futures strip. US rates have continued to back up today, and both the two- and 10-year yields traded above 4% today. The greenback is mostly firmer, though the yen, Swiss franc, and Norwegian krone are resilient. Sterling is leading the decliners with about a 0.35% loss. Dismal German factory orders added to the weight on the euro, which is hovering near the pre-weekend low of $1.0950. Most emerging market currencies are softer, but the Mexican peso and the South African rand are bucking the move with around 0.3% gains.

Asia Pacific equities rally. The index of mainland shares that trade in Hong Kong rose another 2% today. Japan, South Korea, and Taiwan equities rose over 1%. Among the large markets, only India failed to advance. However, European and US equities are heavy. The Stoxx 600 is giving back most of the 0.45% gained before the weekend. US index futures are around 0.50%-0.75% lower. The rise in US rates is tugging global rates higher. European benchmark 10-year rates are 2-5 bp higher. The 10-year JGB yield rose five basis points to 0.92%. Despite the mostly firmer dollar and higher rates, gold is firmer, albeit within the pre-weekend range. The Middle East war is lifting crude oil prices. November WTI rose 9% last week and is up about 2.3% today to trade above $76. It is approaching the August high near $77.50....

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