U.S. Commerce Department Probes China
GRIT
08 Sep
Good Morning!
Good Morning Everyone! Today weāre talking the U.S. Commerce probe into China, treasury yields declining, and Elon Musk.
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Letās dive in!
U.S. Commerce Department Probes China
Source: Bloomberg
The U.S. Commerce Department has initiated an official investigation into Huawei's groundbreaking made-in-China smartphone chip, which has garnered significant international attention. Over the past two years, the Commerce Department has instituted several restrictions on Huawei and China, theoretically preventing them from advancing such technologies.
Huawei's discreet launch of a phone equipped with technology the U.S. has sought to keep from China's grasp poses potential challenges to the Biden administration's recent diplomatic endeavors. Following the announcement of the U.S. Commerce Department's probe, Chinese semiconductor stocks surged by 20%, fueled by speculation of increased support from the Chinese government. Huawei's chip has ignited a surge of nationalist pride on Chinese social media platforms, celebrated as a victory against the United States.
GRIT TAKE: The USA and China are in the beginning stages of a ātechnology raceā that will be very similar to the āspace raceā of the 1960s. In Washington DC, there will be an ongoing debate about if the Commerce Departmentās sanctions against Chinese technology were a massive failure. In fact, China unveiled the new smartphone while Commerce Secretary Gina Raimondo was in China.
Treasury Yields Decline
Source: CNBC
U.S. Treasury yields declined on Friday morning amid investor concerns about potential additional interest rate hikes in light of recent economic data.
Traders are evaluating a slew of economic indicators highlighting persistent inflation and a strained labor market. These signals heightened concerns that the Federal Reserve's rate hikes might not conclude soon. Notably, the reports showed jobless claims lower than anticipated and a surprising rise in second-quarter labor costs.
On Thursday, initial weekly jobless claims were reported at 216,000, undercutting the projected 230,000. This data followed a recent fluctuating labor market landscape. Specifically, the August jobs report from last week revealed that nonfarm payrolls saw a larger-than-anticipated increase, even as the unemployment rate witnessed a significant surge.
GRIT TAKE: There is widespread fear among investors that Fed Chair Jerome Powell will continue to raise rates at an unprecedented level. The prolonged possibility of rising or sustained high rates has historically spurred concerns over a potential economic decline and its subsequent effects on businesses and consumers.
Dumb Money World Premiere at TIFF
Sponsored by: Elevation Pictures
Canāt Stop. Wonāt Stop. GameStop.
Dumb Money is the ultimate David vs. Goliath tale, based on the insane true story of everyday people who flipped the script on Wall Street and got rich by turning GameStop (yes, the mall videogame store) into the world's hottest company.
Everybody expects GameStop to fail. With this struggling bricks-and-mortar business further drained by the pandemic, it feels like itās only a matter of time. Hedge fund managers like Gabe Plotkin bet billions on the hope that it does. Keith Gill thinks otherwise. Operating out of his basement as an amateur investor, heās been adamant for years that the company is undervalued, posting regular updates and videos online to make his case.
When a few average citizens start to pay attention, it sparks a bonfire. Keithās wager becomes a self-fulfilling prophecy as big-name investors like Gabe feel the squeeze of its rising stock price. It isnāt long before big money does everything in its power to throw water on the grassroots movement. Bolstered by an extraordinary cast that includes Pete Davidson, Shailene Woodley, America Ferrera, Vincent DāOnofrio, Nick Offerman, Anthony Ramos, Sebastian Stan, Paul Dano and Seth Rogen.
Dumb Money is scheduled to premiere at the Toronto International Film Festival on September 8, 2023. To be released in Canada by Elevation Pictures in key cities on September 22 and everywhere September 29.
GRIT is giving away, in partnership with Elevation Pictures, a pair of tickets to 15 lucky GRIT subscribers (for the Canadian theatrical release).
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Winners to be announced September 15th 2023.
*This is PAID advertising content and the disclaimer at the bottom of this email MUST be read carefully.
Ukraine Blasts Elon Musk
Source: Getty Images/Chesnot
An official from Ukraine has criticized Tesla and SpaceX CEO Elon Musk for instructing engineers to disable the Starlink satellite network over Crimea last year, alleging it was to prevent a Ukrainian assault on Russian naval vessels. At the onset of the Ukraine-Russia conflict, Musk had provided 500 Starlink terminals to support Ukraine, but later retracted his support. In a recent interview, Musk stated, āStarlink was not meant to be involved in wars. It was so people can watch Netflix and chill and get online for school and do good peaceful things, not drone strikes.ā
A top aide to Ukraine's President Zelenskyy voiced strong objections to Musk's latest decision, posting on X, āBy not allowing Ukrainian drones to destroy part of the Russian military fleet via Starlink interference, Elon Musk allowed this fleet to fire Kalibr missiles at Ukrainian cities.ā
GRIT TAKE: Elon Musk is the greatest entrepreneur of our lifetime. He spends his days building autonomous cars, sending rockets to space, and many other great technology accomplishments. Elon asked himself, āHow am in this war?ā and he went back to doing what he does best which is focusing on changing the word via technology.
Coming Upā¦
Does the stock market end in a losing week? š Earnings spotlight: Kroger, and NAAS Tech š
Heads up for next week: Apple's iPhone 15 drops!
Headlines You Need To Know:
Disney narrows DeSantis US lawsuit on free speech
Former FTX exec forfeits $1.5 billion, pleas guilty to 2 felonies
Ukraine rips Elon Musk for disrupting sneak attack Ā
Former Trump advisor Peter Navarro convicted of contempt Ā
Biden approved a big oil project, but cracks down on drilling
Zoom talked with regulators about Microsoft competition concerns
JP Morgan is explaining blockchain based deposit token Ā
Mattelās windfall from Barbie
SEC probes Ryan Cohenās Bed, Bath, & Beyond trades
Senators take up looming insurance crisis
Walmart cuts starting pay for starting workers
Canada opens inquiry into election meddling by Russia, China
Putin faces Geo-Political setback Ā
Just for funā¦
Ā Single Game MLS tickets surge by more than 1,700% due to Lionel Messi
Source: ESPN
Lionel Messi signed a massive contract with the soccer club Inter Miami CF in July that included an equity stake in the team. On top of his contract, he signed an undisclosed revenue-sharing deal with Apple TV and Adidas. This was an unprecedented move in the MLS. However, the upside has been massive. The Apple TV āMLS Season Passā subscriptions have doubled. While the single game tickets have surged more then 1,700% to see Messi.
3 Most Important Charts Right Now
Fidelity accounts with $1 million or more
2023 recovered from the 2022 down year
Source: Fidelity
US Median Housing Payment as % of Income
Reaching the highest levels since 2006
Source: Charlie Biello, Atlanta Fed
Orange juice futures have soared
A strong hurricane season will make this chart go much higher
Source: Finviz
TWEET OF THE DAY
Nvidia CEO has sold $42 million worth of stock in the past week.
Are you still buying Nvidia shares?
— Grit Capital (@Grit_Capital)
Sep 7, 2023
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