To The Moon

Despite (1) a marginally positive domestic retail sales data and (2) a status quo import prices, US market suddenly turned tail on Tue, 18 Mar 2025. It was bloodshed, all over again. By the time, 4pm clock chimed: (see above) DJIA: -0.62% (-260.32 TO 41,581.31). S&P 500: -1.075 (-60.46 TO 5,614.66). Nasdaq: -1.71% (-304.55 to 17,504.12). US Retail Sales. US Retail sales (for February 2025) increased by +0.2%, according to US Commerce Department. (see above) It was lower than Dow Jones estimate for a 0.6% rise. Comparatively speaking, it was still better than January 2025’s downwardly revised decline of -1.2%. Excluding autos, the increase was in line with expectations at 0.3%. Overall, some of the readings indicated that sales saw a solid rise despite worries about an economic slowdown and rising inflation. According to Navy Federal Credit Union, Corporate Economist - Robert Frick, “Not a great report, but one still in positive territory despite how pessimistic consumers are about the future”. US Import Price Index. US import prices unexpectedly rose in February 2025, amid higher costs for consumer goods. This does not bode well for US inflation outlook. Import prices increased +0.4% last month, matching January's upwards revision from +0.3%, based off US’s Bureau of Labor Statistics. Economists polled by Reuters had forecast import prices (excluding tariffs), dipping -0.1% following a previously reported 0.3% rise in January 2025. Statistically, in the 12 months thru’ to February 2025, import prices increased +2.0% after advancing 1.8% in January 2025. The next, March 2025 report definitely need scrutiny as Trump’s tariffs for Mexico and Canada, officially kicked off on 04 Mar 2025. The effect should be evident in the coming report in April 2025. Agree ? Still wondering whether February 2025’s +0.4% gain was the consequential fallout effect from +10% tariffs imposed on China in February 2025? Root Cause(s). (1) Fed’s Uncertainty: Investors were keenly awaiting the Fed's policy outcomes, after the 2-day FOMC meeting. As usual, the anticipation created market jitters, with traders wary of potential shifts in the Fed's tone regarding interest rate cuts. Concerns exist on whether Fed's economic projections would align with market expectations, particularly the number of anticipated rate cuts. If there’s anyone who would be able to bring some semblance of calm back to US market, its none other than Fed chair - Jerome Powell. (2) Technology Sector Decline: The technology sector experienced significant losses, with major tech stocks like $Tesla Motors(TSLA)$, $Alphabet(GOOG)$, $Meta Platforms, Inc.(META)$ and others showing substantial declines. This downturn in the tech sector heavily impacted the Nasdaq Composite. (3) Increasing Geopolitical Tensions: Ongoing conflicts in (i) Ukraine and (ii) the Middle East added to the prevailing market unease. These events create instability & uncertainty, that will have investors typically reacting by seeking safer assets. Specifically, renewed escalations in the Israeli-Hamas conflict, with Israel breaking cease fire agreements, increased safe haven demand, added to market volatility. It did not help when it was revealed that US (or specifically Trump) was aware of Israel’s premediated attack; and yet chose not to do anything about it. The ongoing situation between Russia and Ukraine also added to the world’s economic uncertainty. (4) Investors’ confidence. Investors' sentiment has shifted dramatically from bullish to bearish on US stocks. (see above) This is evident in record rotation out of US equities by fund managers. This shift is reflected in S&P 500 : (i) -10% tumble from its February 2025’s peak, (ii) entering correction territory and (iii) erasing all gains since Trump's election in early November. Again, the negative shift in sentiment is largely driven by concerns over Trump's economic policies, including tariffs, immigration restrictions, mass layoffs across all agencies, as well as growing fears of a potential recession. $NVIDIA(NVDA)$ failed to impress at its GTC convention. On a much-anticipated Tue, 18 Mar 2025, Jensen Huang spoke for 2 hours about Nvidia's roadmap & future. Before he began, Nvidia was down by -1.0%. By the time he ended, it fell by -3.4%. (see below) Nvidia showed future product plans and talked about robotics and self-driving cars. But Wall Street was not very excited. Lopez Research, Tech-industry analyst & founder Maribel Lopez said Huang repeated old news. Wall Street was hoping to learn of the new ways for Nvidia to make money, but instead, Mr CEO talked about long-term development like robotics and quantum computing. These won't bring quick profits. Jefferies analyst Blayne Curtis wanted more proof of Nvidia's market growth and acknowledge Nvidia's strong hardware & software lead and vertical domains. Nvidia's product roadmap: Blackwell Ultra (2H 2025): feature more memory than current Blackwell flagship chip Blackwell, meaning it can support larger AI models. Vera Rubin (2H 2026): 3.3x faster than Grace Blackwell, 144 GPUs. Vera Rubin Ultra (2H 2027): 14.4x faster than Grace Blackwell, 576 GPUs. Feynman (2028): next generation after Blackwell and Rubin. Curtis said Rubin is a small upgrade, while Rubin Ultra is a big one. My viewpoints: (mine only) While Nvidia’s product roadmap looks tightly knit with about a 12-18 month product curve that it adheres closely, attempting to maintain its lead in the fast AI-changing landscape, it is not infallible. Possible repercussion ? By being ‘transparent’ about its product timeline, Nvidia has put itself in a precarious position in that competitor and customers, will be able to plan & execute a thwart that may derail, keep abreast or steal Nvidia’s limelight. Competitor : Case in point. Cerebras, an Nvidia’s potential competitor already has secured approval to undergo initial public offer (IPO) and they already have their ticker - CBRS ready. CBRS’s supersized AI-chip has already proven to be faster than Nvidia’s AI-chip. Click here ! for more details about my 17 Oct 2024 post. Reduced Demand from IT giants. US IT giants are producing their own AI-chips, reducing reliance and demand of Nvidia’s chips: $Broadcom(AVGO)$ is heavily involved in designing and manufacturing custom AI processors for "hyperscalers," that are large cloud providers. Google has been developing its Tensor Processing Units (TPUs) for several years. These chips are specifically designed for machine learning workloads and are used extensively within Google's data centers. Amazon Web Services (AWS) has developed its own AI chips, including Trainium for training machine learning models and Inferentia for inference. Microsoft has invested heavily in custom silicon. They have introduced the Azure Maia 100 AI accelerator and the Azure Cobalt 100 CPU, designed to optimize their cloud infrastructure for AI workloads. Meta Platform has developed its own AI chips, known as the Meta Training and Inference Accelerator (MTIA), to power its AI workloads, particularly those related to its social media platforms and metaverse ambitions. Even OpenAI is getting into the act of designing their own AI chips, to reduce dependency on Nvidia. (see above) Parting question - will Nvidia remain king of the hill as US IT giants forge their own AI-chip empires? Which Quantum fairest of all, Mirror on the Wall ? NVDA surges in GTC Developer Conference Week ? Buy NIO before its Q4 earnings are out ? Do you think demand for Nvidia’s chips will dim overtime ? Do you think CBRS will give NVDA a run for its money when it IPO ? If you find this post interesting, give it wings! ️ Repost and share the insights ? Do consider “Follow me” and get firsthand read of my daily new post. Thank you. @Daily_Discussion @TigerPM @TigerStars @Tiger_SG @TigerEvents