DHUnplugged #775: Everything Is Fine
Exhaustion signals
TESLA – a rabbit out of a hat!
Fed meeting in focus
S&P earnings week – its a big one
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Warm-Up
- Don't fight the tape
- Exhaustion signals everywhere - but plenty of money floating around it seems
- Seeing lots of overheated signs.....
- BUT, everything is fine. Nothing to worry about
Markets
- Fed Meeting today and tomorrow - Rate decision on Wednesday
- Biggest week for earnings (S&P)
- ATH - Let' GO! First time over 6,780 for the S&P 500
- Profit margins with those Tariffs - Surprise!
- Emerging markets - On FIRE!
Factoid - Ft Lauderdale Boat Show - The economic impact of the Fort Lauderdale International Boat Show (FLIBS) is significant, generating over $1.78 billion in economic output for Florida, supporting more than 100,000 jobs, and creating millions in sales and taxes.
The Fort Lauderdale International Boat Show is considered to be the largest boat show in the world, with over 3 million square feet of exhibition space across multiple marinas.
Godcaster is turning churches into local radio stations - Get the Godcaster app on Android and iOS - An Adam Curry Project
Fed Meeting
- Stock and All time highs
- GOLD, SILVER rocking
- Crypto doing just fine
- GDP good
- Employment good
- Housing market improving
- Limited information about economic activity due to Government is CLOSED
- Inflation is well about Fed's own measures (3%)
- FED IS GOING TO LOWER RATES
REMEMBER - NOTHING TO WORRY ABOUT - TRUST THE GOVERNMENT
CPI
- The consumer price index showed a 0.3% increase on the month, putting the annual inflation rate at 3%, both lower than expected.
- Excluding food and energy, core CPI showed a 0.2% monthly gain and an annual rate also at 3%, less than forecast.
- The Bureau of Labor Statistics released the data specifically because the Social Security Administration uses it as a benchmark for cost-of living adjustments in benefit checks. Otherwise, the federal government has suspended all data compilation during the shutdown.
Quick Meme Update
- BYND - fell back to earth - down to $1.75 from $7 last week...
- We should have shorted for the game like we talked about
- It was supposed to be the next Apple!
Qualcomm News!
- They are in the game now - seems that Qualcomm now has the goods to compete with AMD and NVDA
- Stock up 15% on this news (AMD and NVDA unfazed)
- Qualcomm’s data center chips are based on the AI parts in Qualcomm’s smartphone chips called Hexagon neural processing units, or NPUs.
- Nearly $6.7 trillion in capital expenditures will be spent on data centers through 2030, with the majority going to systems based around AI chips, according to a McKinsey estimate. (3% of of annual GDP for the ext 5 years)
Why Not Intel?
- The U.S. has formed a $1 billion partnership with Advanced Micro Devices to construct two supercomputers that will tackle large scientific problems ranging from nuclear power to cancer treatments to national security, Energy Secretary Chris Wright and AMD CEO Lisa Su told Reuters.
- The U.S. is building the two machines to ensure the country has enough supercomputers to run increasingly complex experiments that require harnessing enormous amounts of data-crunching capability. The machines can accelerate the process of making scientific discoveries in areas the U.S. is focused on.
NVDA Spending Spree
- Massive announcements today and $1billion stake in Nokia
- Nokia announced on Tuesday that Nvidia is taking a $1 billion stake in the networking company, the latest partnership for the artificial intelligence chipmaker.
- Shares of Nokia soared 26% higher following the news.
- Nokia will issue more than 166 million new shares and will use the proceeds to fund its plans for AI and other general corporate purposes.
- The two companies also struck a strategic partnership to work together to develop next-generation 6G cellular technology. Nokia said that it would adapt its 5G and 6G software to run on Nvidia’s chips, and will collaborate on networking technology for AI.
Government Shut Down
- Flight Delays
- NO EBT starting November
- High pressure tactics that will be used in the future
- Pulling some benefits from Blue States
- Need to have new plan to deal with these politicians - are they getting paid? YES
Farmer Scott
- Treasury Secretary Scott Bessent said he has “felt pain” from China refusing to buy American soybeans during a trade conflict with President Donald Trump.
- “I’m actually a soybean farmer,” he told ABC News’ “This Week.”
- SURPRISE! Part of the Framework deal with China is that China will again start buying soybeans
Cathy Wood
- Ark Invest CEO Cathie Wood on Tuesday pushed back on fears of an artificial intelligence bubble, while flagging the possibility of a “reality check” on AI valuations.
- Speaking to CNBC’s Dan Murphy on the sidelines of Saudi Arabia’s Future Investment Initiative, or FII, in Riyadh, Wood said that as interest rates begin to rise, “there will be a shudder” in markets.
- “We are going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates,” the closely watched investor said.
NO WAY JOSE
- Not good.... this needs to be explained and reversed...
- The mystery donor whose $130 million contribution is meant to pay U.S. military troops during the government shutdown is Timothy Mellon, an heir to a renowned Gilded Age banking family, The New York Times reported Saturday.
- But Mellon’s donation works out to only about $100 per service member. It costs nearly $6.4 billion to pay U.S. troops every two weeks.
- And using his money might run afoul of federal law, according to the Times, which cited two people familiar with the matter in identifying the billionaire railroad magnate as the donor.
- This invites all sorts of potential problems and conflict of interest. Plus, can we just say where we want our tax dollars to go to?
How about those Profit Margins?
- Given concerns in the market about tariffs and higher costs, what is the S&P 500 reporting for a net profit margin for Q3?
- The blended net profit margin for the S&P 500 for Q3 2025 is 12.8%, which is equal to the previous quarter’s net profit margin, but above the year-ago net profit margin and above the 5-year average.
- In fact, this quarter marks the 6th consecutive quarter that the S&P 500 is reporting a net profit margin above the 5-year average (12.1%).
- --- BUT that 5-yr average includes some hard times...
- At the sector level, four sectors are reporting a year-over-year increase in their net profit margins in Q3 2025 compared to Q3 2024, led by the Financials (19.9% vs. 18.0%) and Utilities (16.7% vs. 14.8%) sectors. On the other hand, six sectors are reporting a year-over-year decrease in their net profit margins in Q3 2025 compared to Q3 2024, led by the Communication Services (13.8 vs. 14.8%), Real Estate (34.3% vs. 35.2%), and Health Care (7.3% vs. 8.2%) sectors.
Is this the new normal?
- The Dutch government has invoked control of Nexperia, a Chinese-owned semiconductor maker based in the Netherlands, under its Goods Availability Act.
- Following the announcement by The Hague, Wingtech’s Shanghai-listed shares plunged 10% to hit its max daily limit.
- The Dutch government has taken control of Nexperia, a Chinese-owned semiconductor maker based in the Netherlands, in an extraordinary move to ensure a sufficient supply of its chips remains available in Europe amid rising global trade tensions.
- Nexperia, a subsidiary of China’s Wingtech Technology, specializes in the high-volume production of chips used in automotive, consumer electronics and other industries, making it vital for maintaining Europe’s technological supply chains.
OpenAI
- Following up on the vendor financing and circular financing
- OpenAI has close to a TRILLION DOLLARS of commitments over the next 10 years.
- Signed a deal with AMD last we spoke and spiked that stock 40% (OpenAI could option for 10% ownership through warrants)
- As part of the arrangement, AMD issued a warrant that gives OpenAI the ability to buy up to 160 million shares of AMD for 1 cent each over the course of the chip deal. The warrant vests in tranches based on milestones that the two companies have agreed on.
MORE....
- Questions starting to get raised about the possibility of OpenAI actually being able to fund these deals.
- Example - Oracle repricing - DOWN 18%
Tesla
- Bad earnings - no problem! Let's announce more Robotaxi potential and now ROBOTS
- Horrible earnings, with a really ugly margin compression from expected (500bps)
- Just wait a day or so and the stock rebounds from $417 to $457 on a PR blitz to show that there is still the chance that the dream of Autonomous driving will happen
AND
- Tesla chair Robyn Denholm pleaded with shareholders to approve CEO Elon Musk's unprecedented compensation package, one that could cost the company $1 trillion, with the threat of Musk leaving the company.
- In a letter sent to shareholders Monday morning, which follows a prior letter sent last week, Denholm warned the company stands to lose Musk's leadership if shareholders do not approve the plan.
Amazon
- Amazon is planning to cut as many as 30,000 corporate jobs beginning on Tuesday, as the company works to pare expenses and compensate for overhiring during the peak demand of the pandemic, according to three people familiar with the matter.
- The figure represents a small percentage of Amazon’s 1.55 million total employees, but nearly 10% of the company’s roughly 350,000 corporate employees. This would represent the largest job cut at Amazon since around 27,000 jobs were eliminated starting in late 2022.
Target
- Company said on Thursday it’s cutting 1,800 corporate jobs as the retailer tries to get back to growth after four years of roughly stagnant sales.
- It marks the first major round of layoffs in a decade for the Minneapolis-based retailer. It announced the layoffs in a memo sent by Target’s incoming CEO Michael Fiddelke to employees at its headquarters.
- The eliminated roles are a combination of about 1,000 employee layoffs and about 800 positions that will no longer be filled, a company spokesman said. Together, they represent an approximately 8% cut to Target’s corporate workforce, according to the memo.
Peer Pressure
- Major deal or frameworks announced this week
- Emerging markets getting a boast from the idea that favorable terms in these deal are going to be announced
- The problem (or maybe design) is that there is very little detail and the accountability is not there
- Supposedly soybeans are in focus again as there is ZERO USA soybeans being bought by China right now.
---Zero exports in September 2025: U.S. soybean exports to China reached zero in September 2025, the first time this has happened in seven years.
- PLUS - just look at what happened to Canada - say something bad and you get a tariff slap...(Canada took down ad - but President Trump thought they should be punished - they get Tariff Detention)
Barron's out with a caution note
- Following the weekend release of the FRAMEWORK - rare earth stocks dropping (Bessent says that the Rare Earths issue will be pushed back a year - paused withholding by China?)
- MP, REMX, TMC, CRML, TMQ, USAR, UAMY
Power Hungry
- Google announced a new partnership with NextEra Energy to restart Iowa’s only nuclear power plant, a move aimed at meeting the growing energy demands of artificial intelligence while strengthening America’s clean-energy grid.
- Earlier this month, the U.S. Energy Information Administration projected that power consumption will hit record highs over the next two years — climbing to 4,191 billion kilowatt-hours in 2025 and 4,305 billion kWh in 2026, up from 4,097 billion kWh in 2024, driven largely by AI data centers.
- The agreement between Google and NextEra includes a 25-year power purchase deal for the Duane Arnold plant and a framework to explore additional nuclear projects nationwide. NextEra will assume full ownership after acquiring stakes from CIPCO and Corn Belt Power Cooperative.
China
- China’s industrial profits soared 21.6% in September from a year ago, the National Bureau of Statistics said Monday, as Beijing’s campaign to curb price wars helped ease pressure on manufacturers despite persistent trade tensions with the U.S.
- That sharp jump, extending a strong rebound that began in August when the industrial profits jumped 20.4% year-on-year, marked the biggest gain since November 2023.
- For the first nine months of the year, profits at major industrial firms grew 3.2%, the official data showed, accelerating from a 0.9% rise in the January to August period.
Brazen
- Brazen theft - Louvre
-- So Simple and effective, but they still got caught
- Police have arrested suspects in connection with the theft of France’s crown jewels from the Louvre museum, just as one attempted to leave the country, the Paris prosecutor’s office said.
GO!!!!!!!!!!!!!!!
- OpenAI has completed its restructuring into a nonprofit with a controlling equity stake in its for-profit business.
- The nonprofit holds an equity stake currently worth about $130 billion in its for-profit arm.
- Microsoft, which has backed the company since 2019, will hold roughly 27% in OpenAI Group PBC.
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