Can't Get Enough of Tech
In this issue of the Peel:
Market Snapshot
Happy Tuesday, apes.
Phew, at least Monday’s over… and of course, it’s always a pleasure to see the Giants lose.
But losing was only partially on the docket for markets yesterday. While most of the market was feeling the Monday blues, megacap tech came up big to carry the team with some help from Wall Street banks (more below).
Only three sectors were up: tech, consumer discretionaries, and communications, but that was enough to give the Nasdaq a 0.67% ride. The S&P was basically flat, while the Russell 2k’s 1.51% dip shows that breadth was nonexistent in this rise.
Yields surged for the day in the meantime. The 2-year went back above 5.10% as longer-dated yields moved even higher, with the 10-year flirting with 4.7%. The Dollar followed suit, rising through 107, leaving us all to wonder once again how Stan Druckenmiller is feeling about his USD short.
Let’s get into it.
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Banana Bits
Macro Monkey Say
Valu-AI-tion
It’s been an overall quiet year for venture capitalists, private markets, and their valuations. But not for OpenAI.
OpenAI, the company behind the now ubiquitous large language model (LLM) ChatGPT, has frequently been credited with kickstarting the wave of optimism that flipped your portfolio from red to green this year. Now, they’re taking that optimism for themselves.
Until version 1 of ChatGPT was released on November 30th, 2022, markets were down bad—arguably heartbroken—over JPow and his rate-hiking nuclear bomb. Since then, Nvidia and other semi/tech names have carried the team to a nearly 30% rise for the Nasdaq so far this year.
And after all that work lifting public markets, it looks like OpenAI is finally going to be able to reap some reward for themselves.
"... the ChatGPT developer is gearing up for a $90bn valuation ..."
According to the WSJ , the ChatGPT developer is gearing up for a $90bn valuation, triple its $29bn valuation set back in April.
Just so we’re clear, that’s a 200% return in less than six months, just about on par with Nvidia’s gain all year.
The explosion of ChatGPT and the subsequent LLM wave it triggered from the likes of Google, Meta, and a whole cast of others has already been a game changer in many industries and to many people (and no, I promise that chatbot isn’t writing any Daily Peels… at least for now…).
Anyway, there’s also a lot more going on under the hood.
According to the rumor mill, OpenAI CEO Sam Altman has been regularly meeting with the Silicon Valley legend Johnny Ive, the key designer of the iPhone that wasn’t named Steve Jobs.
Apparently, OpenAI is looking to launch an “AI-based smartphone” or other piece of hardware as its next world-changing/potentially-civilization-destroying move.
"... AI is well on its way into and potentially taking over our daily lives."
While that’s all pure speculation for now, one thing is clear: AI is well on its way into and potentially taking over our daily lives.
And that’s because artificial intelligence allows humans (aka natural intelligence, or lack thereof, depending on who we’re talking about) to do their favorite thing: less work.
Already, Google’s chatbot Bard can essentially plan an entire vacation for you and the fam while simultaneously explaining why Ross and Rachel were (in fact) on a break or why y = mx + b, for example. As they creep into our professional lives through internal LLMs or take jobs of lower-level employees, that impact will only grow.
And, for some, the productivity wave might be the answer we need to solve some of our nation’s economic woes. For example, if AI allows companies and individuals to earn more, that leads to convex growth in our GDP and tax receipts, ultimately reducing the national deficit and debt-to-GDP ratio, in theory, at least.
With $33tn owed to… ourselves?... that’s going to be a big bill for AI to pay for. But, if anything is gonna help us dig out of this hole, it would have to be some kind of game-changing technology. It's safe to say AI fits the bill, and, for one, we can’t wait to see where it goes.
What's Ripe
Sphere Entertainment (SPHR) ↑ 11.20% ↑
Big Tech (NVDA, AAPL, AMZN, META) ↑ 2.95% ↑
What's Rotten
NextEra Energy (NEE) ↓ 5.37% ↓
VinFast (VFS) ↓ 21.60% ↓
Data Peel
Thought Banana
Digital ASSets
Despite the fact that the NFT is worth a combined ~$0.00 and that no one on Earth has Googled “price of Solana” in almost 2-years, digital assets are still… well, they’re still there.
We wanted to say they’re still alive and kicking, but we wouldn’t want to lie to you apes. As discussed above and all too often, markets have been rough since the start of 2022, which, believe it or not, is already almost two years ago.
Of course, digital asset prices are some of the highest beta trades out there.
"... digital asset prices are some of the highest beta trades out there."
Essentially, whatever markets and overall levels of liquidity are doing, just slap a 2x (or 100x) on that, and you can get a fairly accurate assessment of the digital asset space.
Still, with that said, prices popped off yesterday and this weekend. October—or, as it’s known natively in the space, “Uptober” —is typically a great month for BTC, ETH, and other crypto prices. Aside from the fact that the original BTC whitepaper, as dropped by Satoshi him/her/themself back on Halloween 2008, was released this month, there’s really no further explanation for the coincident rally.
Prices jumped inexplicably over the weekend, potentially grateful to the above idea that Uptober is here to spread the good vibes again. Or maybe it’s just some random bullsh*t. After all, it is crypto.
However, once again, the resilience of the asset class is on full display. Rates, yields, and anxiety levels are at the highest they’ve ever been since the first BTC was mined.
That means financial conditions are at their least conducive to this asset class, powered purely by speculation, that we've ever seen.
"... financial conditions are at their least conducive to this asset class ..."
To many (like the haters and losers out there), this is a looming nail to be hammered into BTC’s coffin. But to others, it’s another feather in their cap. The longer digital assets exist without dying (aka, stopping to exist), the longer we can expect the asset class to exist… and that’s on Lindy .
As a result, the price of linked equities like Coinbase, Riot, Marathon, Microstrategy, and all the others rose in tandem. Next on deck in terms of expected catalysts would/could be the SEC getting off their ass—if and when they choose to—to allow big bois like Fidelity, BlackRock, Grayscale (way smaller), and others to get in on the fun. We’ll see what happens.
The big question: How will digital assets perform in a world of “higher for longer” rates? Is this the death knell of the restriction needed to weed out the wheat from the chaff?
Banana Brain Teaser
Yesterday —
There are two pixies, an old one and a young one. The old one is 120 years old, and the young one is 32 years old. How old will the old pixie be when he is exactly twice as old as the young one?
Answer
The old pixie is 88 years older than the young pixie. This means that the old pixie would be 176 years old when the young pixie would be 88 years old.
Today —
You can have me but cannot hold me; Gain me slowly and quickly lose me.
If treated with care, I can be great, And if betrayed, I will break.
What am I?
Shoot us your guesses at [email protected]
Wise Investor Says
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong” — George Soros
How would you rate today’s Peel?
Happy Investing,
Patrick & The Daily Peel Team
Sales Associate at American Airlines
1 年Thank you for sharing
CFO BANKING AND TAX MANAGEMENT SERVICES
1 年It appears the views drawn are Clear case of Misleading interpretation cum Analysis ;in the absence of any authentic reliable data of participants on Wall Street linked to Demand and Supply-Age Group-Region versus actual transactions.