Nvidia's new plan!

00:00:00: Hi and welcome to Swisscodes, daily market talk.

00:00:03: It's Tuesday second of June.

00:00:05: the market narrative continues to swing between the ugly geopolitics of the Middle East and shiny technology news.

00:00:12: but technology enthusiasm outweighs a price action in the market with investors rushing into taste a part of that cake!

00:00:20: But as they do the risks spill over the entire economy through different channels.

00:00:25: so we will talk about all always, please keep in mind that opinions are my own and this is not financial advice.

00:00:43: So when you think the geopolitical headlines could get worse what do they?

00:00:47: Yesterday news went from Iran suspending peace talks with US due to intensified Israeli attacks into Lebanon sending oil prices up past.

00:01:00: Then Donald Trump came up with the soothing news that Hezbollah and Israel finally agreed not to fight each other in Lebanon.

00:01:08: But then Netanyahu contradicted US President by saying, That fighting in southern Lebanon would continue.

00:01:14: It's a mess really.

00:01:15: I won't engage into discussion regarding the U.S.-Israels political goals here because i am NOT geopolitical expert And even geopolitical experts have little explanation To this situation Other than Trump having been fooled By Mr Netanyahu into this mess.

00:01:31: But oil experts told OPEC Plus that even when the Strait of Hormes will be opened, supply disruptions due to this prolonged closure and damage to oil infrastructure will persist.

00:01:44: Price-wise though I would say that the latter – reopening of the strait of hormes means lower global prices immediately Potentially some pressure on oil companies earnings as well.

00:01:54: As a result of it So this morning US credit is slightly lower than yesterday hovering around the ninety two dollar per barrel level for the u.s.. Credit.

00:02:04: short-term rest remain two sided.

00:02:06: It is possible that the barrel off us square rebalance past one hundred dollars per barrel psychological Level if peace negotiations stole but it's also possible That we see the price pull back toward and below the eighty dollar per battle level If the middle these fighting ends.

00:02:21: Yet given the rapidly falling global oil reserves, The next leg up threatens to push oil higher than the one hundred twenty dollars per barrel mark if we remain into this situation of uncertainty for a few more weeks.

00:02:34: Above that level however demand destruction would keep prices capped.

00:02:38: so unless war extends in two July I wouldn't expect the price rise from one hundred fifty to one hundred sixty dollar per barrel levels as suggested by some industry leaders looking at oil stocks.

00:02:51: They performed well yesterday on the back of a rebound in oil prices, yet initial impact to higher oil prices having been already priced-in and in the light of prolonged period supply disruptions we could see SPZR's energy ETF step into medium term bearish consolidation zone.

00:03:10: that would require a move below the fifty five dollar level which would also coincide with the hundred-day moving average.

00:03:17: Now zooming out, the S&P five hundred rose yesterday to a fresh all time high level led higher by technology of course and we did jump more than six percent yesterday after unveiling.

00:03:29: Jensen Wang said it was the first big re-invention in forty years.

00:03:34: The new super chip aims to allow large AI models to run directly on a Windows computer instead of sending requests to a data center and getting them back.

00:03:43: In other words, NVIDIA wants to turn every computer into an AI machine capable of handling complex tasks across your programs and files.

00:03:53: This is just fantastic.

00:03:54: for AR adoption It means faster responses lower class costs and greater privacy.

00:04:01: Think of sensitive data that no longer needs to leave your device.

00:04:04: for medical and legal industries, For example the letter would be just a game changer And for datacenters it wouldn't be a worry.

00:04:12: on the contrary companies with face less capacity constraints and mad will remain robust in all cases because most advanced AI models still require enormous competing power through train-and run.

00:04:29: So if anything, putting AI on every desktop could accelerate adoption and finally increase demand for the cloud infrastructure behind it as well.

00:04:57: vertical ascensors.

00:04:59: few months now.

00:05:00: AMD and Intel, on the other hand fell on rising competition for PC chips while Microsoft advanced more than two percent after unveiling their first Windows PC to run an NVIDIA main processor.

00:05:12: Well that's about the fascinating chip work!

00:05:15: Interestingly, the news helped TSMC.

00:05:17: only one person higher in Taiwan today couldn't help cost the index extend gains.

00:05:22: Investors apparently preferred pocketing some of their profits back off worsening geopolitical outlook.

00:05:28: But besides the video, other big news came yesterday from Anthropik which submitted draft paperwork for an IPO in full this fall aiming to leapfrog up on AI.

00:05:38: Which is also expected file for an IPO in the coming days.

00:05:42: As we discussed on a special episode previously, if you haven't watched just go and watch it all.

00:05:47: The valuations are huge for these ultra promising but cash burning companies.

00:05:53: And what's perhaps more interesting at this stage is that the AI race Is no longer being funded solely by venture capitalists willing to lose money.

00:06:02: For example In exchange for a shot at changing the world with his AI machines increasing the institutionalized.

00:06:11: Just yesterday, Alphabet announced plans to raise up to eighty billion US sellers to fund its AR ambitions.

00:06:19: that was one of their biggest stock deals in history and that included a ten-billion USD investment from Berkshire Hathaway.

00:06:28: So it simply means that AI is increasingly becoming a credit story as well, and deeper traditional finance gets involved.

00:06:35: The more the AI sort of ships from a technology narrative to a credit narrator.

00:06:40: So what's the risk?

00:06:41: A failure, a gut forbid would not like to trigger financial stress but growing web of equity investments debt financing private credit facilities infrastructure spending and long-term purchase commitments mean that AI related losses are increasingly finding their way into pension funds insurers asset managers corporate balance sheets outside AI in technology ship today and we're all trying to go to the moon.

00:07:12: Now of course, this MP-Five hundred earnings are expected to accelerate twenty four percent This year.

00:07:17: on the back office AI enthusiasm and spending Goldman Sachs single stock one month put colescue fell To the lowest levels on record meaning that there only bulls left in the market.

00:07:29: no more bears just bulls.

00:07:31: And two charts from XCS warned that corporate profits now make up around twelve percent of gross domestic income in the US, that's highest since nineteen fifties while compensation going to employees fell one percent, meaning that we are now in a two-speed income growth for US households.

00:07:50: Those who invest versus those do not.

00:07:53: and needless to say the corporate earnings are rising on AI if you take out technology during its growth and stock prices are much less impressive.

00:08:00: so In conclusion To be well off One must invest but because everybody is in The valuations are exploding aswell.

00:08:07: AI will survive As their internet.

00:08:09: But could they really avoid a road accident like the dotcom bubble?

00:08:14: in early two-thousands or not.

00:08:17: Now no one has the answer, but the rest are clearly building now.

00:08:20: One last thing before we go.

00:08:22: The dollar yen is under pressure this morning as Japanese authorities have started to warn that the pair Is now getting close toward the uncomfortable levels.

00:08:30: I could soon require a direct FX intervention.

00:08:35: The recent history of FX interventions show that the repeated FX interventions in the dollar yen have not helped reverse the yen's selling pressure, but they are well-being fruitful for tactical short positions waiting in embossed today to catch the next intervention led leg down just saying!

00:08:53: So this is all for today.

00:08:54: I'm Ipeco Skardishke and thank you for joining me And Thank You For All Your Beautiful And Supportive Comments.

00:09:01: I hope this episode of Market Talk has been helpful and it's been insightful to you.

00:09:07: So please do not hesitate leave your comments, reactions or questions below as usual!

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00:09:33: So I will meet you again tomorrow!

00:09:36: And until then... Good day trading!