Breakfast | The ETF that is extremely bullish on NVIDIA is attracting crazy amounts of money, opinions are divided on whether there is a bubble in the US stock market.

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Overnight Market Update

Meta leads the decline in blue-chip technology stocks, chip stocks underperform the market for two consecutive days, NVIDIA drops over 7% in two days, Chinese concept stocks outperform the market for two days

The U.S. CPI and PPI for February will be released on Tuesday and Thursday this week respectively. Before the data is released, traders have little motivation to boost U.S. stocks. Only the Dow closed higher, up by about 0.12%.

Tesla rose by about 1.4%, Meta fell by 4.4%, Amazon dropped by 1.9%, and Apple rose by nearly 1.2%. NVIDIA fell by 2%, TSMC's U.S. stock fell by about 5%, and AMD dropped by 4.3%.

Popular Chinese concept stocks have risen for two consecutive trading days, outperforming the market for two days. Bilibili rose by 13%, Dada Group rose by over 9%, XPeng, Nio, and JD.com rose by over 5%, Baidu, Tencent Music rose by over 3%, Alibaba, NetEase, Pinduoduo all rose by over 1%, and Li Auto rose by nearly 0.4%.

Blue-Chip Stocks and Hot Stocks

The super bullish NVIDIA ETF sets record highs in fund inflows and trading volume, seen as an indicator of retail investor sentiment

Following last week's record $252 million net inflow, the GraniteShares 2x Long NVDA Daily ETF (NVDL) doubled its long position in NVIDIA on Monday, reaching a historically high trading volume. According to Markit Securities, short positions account for only 1.5% of the fund's outstanding shares.

Market news: The new iPad Pro/Air is expected to be released at the end of March or in April, with a new Magic Keyboard and Apple Pencil for the related iPads also set to be launched simultaneously.

Insiders: Apple is testing AI-based advertising products for the App Store.

Tesla's German factory has restored power, but the exact time for full production recovery is still uncertain.

According to Punchbowl: TikTok CEO Shou Zi Chew will visit the U.S. Congress.

Taiwan is considering raising TSMC's electricity prices by up to 30%.

NVIDIA CEO Jensen Huang has confirmed that the next DGX AI system will use liquid cooling.

The largest U.S. natural gas producer, EQT Corporation, will acquire U.S. natural gas gathering company Equitrans Midstream for $12.50 per share, with a post-merger valuation exceeding $35 billion.

Oracle reported an adjusted EPS of $1.41 for the third quarter, beating expectations of $1.38; adjusted revenue of $13.28 billion, in line with expectations; net profit of $2.401 billion, missing expectations of $2.788 billion.

Media reports: Hillhouse Capital, Boyu Capital, and DHVC are in deep negotiations to invest in Wanguo Data's overseas data center business.

Jefferies analyst Thomas Chong upgraded Pinduoduo from "Hold" to "Buy" and raised the target price from $117 to $157.

Huana South City: Two notes totaling approximately $24.67 million failed to be paid on time, triggering cross defaults.

• Vanke: According to sources related to Vanke, the company has already repaid nearly half of its overseas debt in the public market this year. The remaining two overseas debts will mature in May and June, and will be repaid in three ways.

• SF Express: It is expected that SF Express will achieve a turnaround from loss to profit in 2023, with a net profit from continuous operations not less than approximately RMB 60 million.

• JD.com: JD.com has launched the "Spring Dawn Plan" and introduced the "AI All-in-One Service Package", which allows businesses to use various AI tools to generate graphics, videos, and live broadcasts for free, helping them save 50% on operating costs. The "Zero-cost Trial Operation" has no time limit, and no deposit or platform usage fee is required during this period.

• Global Game Developers Conference: The conference will be held in San Francisco from March 18th to March 22nd, with participating companies including Microsoft, Google, NVIDIA, Meta, Adobe, EPIC, Unity, Roblox, Tencent, NetEase, and others.

• Qualcomm: Qualcomm announced that the Snapdragon flagship new product launch event is scheduled for 14:30 on March 18th, and is expected to introduce chips such as the Snapdragon 8s Gen 3.

• XPeng Motors and Volkswagen Group: XPeng Motors has signed a strategic technology cooperation and joint development agreement with Volkswagen Group and established a joint procurement plan.

• Deutsche Bank: Deutsche Bank has lowered Tesla's target price from $250 to $218.

Artificial Intelligence

• Tesla CEO Elon Musk: x AI will open source the AI chatbot Grok this week.

Cryptocurrency

• Bitwise Bitcoin ETF: BITB's assets under management exceeded $2 billion two months after the fund was launched.

• MicroStrategy: MicroStrategy purchased 12,000 bitcoins for $8.217 billion in cash; as of March 10, 2024, it holds approximately 205,000 bitcoins.

• Former US President Trump: Suggested that if elected, he may adopt a tolerant attitude towards cryptocurrencies.

• Coinbase: The cryptocurrency market may face macroeconomic and technical resistance in the short term.

The short covering that initially drove the rise now seems to have exhausted, and the US spot Bitcoin ETF remains a key support for Bitcoin demand. The Federal Reserve's Bank Term Funding Program (BTFP) to support regional banks expires on March 11, with fund managers' cash reserves declining, coupled with end-of-quarter rebalancing, which may suppress liquidity. Bitcoin is most likely to trade in a narrow range before the "mid-April halving."

Bitcoin rises for six consecutive days, breaking $72,000, with increasing interest from institutions and retail investors

With significant funds flowing into the US Bitcoin ETF, Bitcoin's gains this year are close to 70%. The open interest in Bitcoin futures contracts on the Chicago Mercantile Exchange (CME) has surged 44% from this year's low. The rebound in funding rates indicates that traders are increasingly willing to pay a premium for leveraged long positions in Bitcoin.

Startups

IPO Opportunities

• Horizon Robotics: The Chinese intelligent driving computing solution provider Horizon Robotics has selected an investment bank and arranged to conduct its first public offering (IPO) in Hong Kong this year, raising approximately HKD 3.9 billion.

Macro: A Global Perspective

• White House: The White House expects a significant slowdown in US economic growth this year, with inflation persisting; it is expected that the average CPI increase in 2024 will be 2.9%. "The Fed's Megaphone": Biden's latest budget shows that interest rates will not drop quickly, and the market should not overprice.

Jamie Dimon, CEO of JPMorgan Chase: I see a bit of a bubble in the stock market now.

JPMorgan Chase strategist warns: Trading congestion brings the risk of "momentum collapse"

After the recent investment frenzy in so-called momentum stocks like the "Big Seven," historically, there tends to be a pullback. As most U.S. and global companies struggle to increase profits and maintain profit margins, the prolonged higher interest rates and the halo effect of artificial intelligence stocks have led to a rush of funds into mega-cap stocks. Given this situation, along with very optimistic investor sentiment and positions, we remind investors that when the artificial intelligence craze peaks, this situation may reverse.

Bank of America strategist: No signs of a bubble in the S&P 500 index

The current U.S. stock market does not exhibit previous market bubble characteristics, including the gap between prices and intrinsic value, and the extensive use of leverage reflecting speculative behavior. Investor sentiment is "neutral" like during the expansion of the 1995 tech bubble, rather than the "crazy bullish" sentiment close to the burst in 1999. The S&P 500 index, excluding the Big Seven tech companies, is closer to long-term average valuation levels, and "today's index is not comparable to the lack of comparability in the previous decades." "Since mid-2023, the stock market has gained popularity, driving our slightly lower market bullishness, but it is far from the bullish levels seen at previous market peaks... We believe that this bull market has momentum."

New York Stock Exchange: Short positions increased by 1.1% at the end of February, reaching 15.72 billion shares.

Biden unveils a $7.3 trillion budget, including cutting the deficit by $3 trillion annually over the next 10 years, increasing taxes on the wealthy and corporations, and reducing taxes for the middle class. However, this budget is unlikely to pass in Congress.

Singapore startup Silicon Box will invest 3.2 billion euros in Italy to build a chip factory in northern Italy. Founded by the founder of U.S. chip manufacturer Marvell, this startup has been established for nearly three years and will produce so-called chiplets the size of a grain of sand in Italy.

Chinese Ministry of Foreign Affairs: Looking forward to and encouraging more exchanges between the people of China and the United States.

China Association of Automobile Manufacturers: China's automobile sales in February decreased by 19.9% year-on-year, while sales of new energy vehicles in January-February increased by 29.4% year-on-year.