Is RoaringKitty back?

Thoughts of the Day

Yesterday, the man behind the GameStop (GME) short squeeze, who is known as RoaringKitty on Twitter, tweeted that he was long about $200 million worth of GME stocks and options, and this sent the retail stock traders into a frenzy. GME rallied more than 100% in pre-market trading hours. AMC, which is another favourite of the meme stock punters, rose nearly 40% in pre-market trading hours too.

However, once the market opened, sellers came in and GME and AMC ended the day up just about 30% and 5% respectively. This shows once again how dangerous it is to be on the wrong side of asymmetry as a mere tweet can help a stock double in a matter of minutes.
Tread carefully when you’re trying to fight euphoria.

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The FDIC said Wednesday that unrealized losses across the sector on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first three months of 2024. These losses have piled up as interest rates have increased significantly in the past 2 years. 

Day Ahead

JOLTS Job Openings (8.35M expected vs 8.488M prev)

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What Happened Yesterday

Market Movements as of New York Close 4 Jun 24

[US Purchasing Managers Index]
US ISM Manufacturing PMI: 48.7 actual vs 49.6 expected and 49.2 prev.
The data showed a further contraction from last month (reading above 50 means expansion while reading below 50 indicates contraction), causing the US 2 year bond yields to fall -0.03% in immediate reaction. The US Dollar Index fell -0.25% in immediate reaction from 104.53 to 104.27 as well.

The weakness in the US Manufacturing PMI led to lower US bond yields with the 2-year bond yield falling 0.05% and the 10 year falling 0.09% on the day. 

The US stock market opened slightly higher from Friday. It then fell in the early New York session when a glitch at the NYSE occurred, causing shares of Berkshire Hathaway to be down 99% (see article 2). However, stocks started to recover mid session as the glitch was fixed and the trades at the extreme low prices were cancelled by the exchange. The S&P 500 rose +0.11% (high: +0.47%, low: -0.82%), the Dow Jones decreased -0.30% (high: +0.13%, low: -1.14%) while the Nasdaq increased +0.35% lower (high: +0.92%, low: -0.78%).

The crypto market was range bound on the day.
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Headlines & Market Impact

AMD announces new AI chips amid intensifying competition with Nvidia, Intel

Notable Snippet: “AI is our number one priority and we’re at the beginning of an incredibly exciting time for the industry as AI transforms virtually every business, improves our quality of life, and reshapes every part of the computing market,” chair and CEO Lisa Su said during the Computex tech conference in Taipei.

During a keynote address, Su unveiled the Ryzen AI 300 series for next-generation AI laptops. The line could compete directly with Intel’s upcoming Lunar Lake and Qualcomm’s Snapdragon X. And in partnership with Microsoft, these chips will power laptops equipped with the tech giant’s AI chatbot Copilot.

Su also revealed the new Ryzen 9000 series for desktops, calling them “the world’s fastest consumer PC processors” for gaming and content creation.

Both lines are expected to launch in July. This comes less than two months after AMD’s April announcement of new processors that can run AI workloads – the Ryzen Pro 8040 for laptops and the Ryzen Pro 8000 for desktops.

Nvidia CEO Jensen Huang has pledged to release new AI chip tech every year, faster than the company’s previous two-year timeline. AMD also plans to release new AI chip tech every year.

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New York Stock Exchange says bizarre glitch that showed Berkshire Hathaway down 99.97% has been resolved

Notable Snippet: Instead, an NYSE spokesperson said there was a “technical issue” with industry-wide price bands that “triggered” trading halts on up to 40 symbols listed on NYSE Group exchanges.

NYSE noted that those price bands are published by the Consolidated Tape Association’s (CTA) Security Information Processor (SIP). CTA, an industry group, is responsible for publishing real-time trade and quote data.

CTA said it experienced an issue that “may have been related to a new software release.” To fix the issue, the industry group said it relied on a secondary data centre operating on the older version of the software.

Dozens of stocks were paused earlier in the day, an indication they traded outside those so-called limit up-limit down bands, according to NYSE’s website. That list includes Chipotle and Berkshire Hathaway, the holding company run by legendary investor Warren Buffett.

For nearly two hours, Berkshire Hathaway’s Class A shares were listed as trading at just $185.10 — a price that would represent a loss of 99.97%. Berkshire closed at $627,400 on Friday.

NYSE announced it has decided to “bust,” or cancel, all “erroneous” trades for Berkshire between 9:50 am ET and 9:51 am ET at or below $603,718.30. The exchange said that ruling is not eligible for appeal and indicated it could cancel other trades.

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Exclusive: Arm aims to capture 50% of PC market in five years, CEO says

Notable Snippet: Demand for use of Arm’s technology in personal computers got a boost after Microsoft unveiled ambitious plans last month to launch a new breed of PCs with artificial intelligence features to compete with Alphabet (GOOGL.O) and Apple (AAPL.O).

Its flagship Windows operating system will now run on chips designed by Arm, whose technology powered the rise of smartphones. Chips made by Intel (INTC.O) have dominated the PC industry for decades and if the Arm push succeeds, it would reorder the market.

“Arm’s market share in Windows – I think, truly, in the next five years, it could be better than 50%,” CEO Rene Haas told Reuters in an interview.

Microsoft has made a significant commitment to ensure its alternative technology to Advanced Micro Devices (AMD.O) and Intel’s x86 technology is embraced by consumers, building a suite of software developer tools to make it possible to produce programs that function on Arm-based chips.

“They’ve (Microsoft) gone way beyond anything they had (in developer tools) and they really picked it up in the last couple of years,” Haas said. “They are very, very much committed from a software standpoint.”

Microsoft and hardware vendors are following in Apple’s footsteps. The company has seen success from its introduction of Arm designs. It has sold machines with its “M Series” processors for roughly four years and those chips offer long battery life and speedy performance.

Qualcomm (QCOM.O) has designed the first Arm-based chip to introduce consumers and businesses to the new Windows-based Arm machines, but other vendors will follow, Haas said.

Microsoft also has a battery of device makers signed on to sell machines with the Arms-based system such as Asus (2357.TW) and Dell Technologies.

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Phan Vee Leung
CIO & Founder, TrackRecord