Tuesday, September 12, 2023

🌄Has the AI Trend Peaked?

Good morning. In 2021, Facebook moved away from being a social media company and towards what...
It's the monthly jobs numbers today and they're not going to be pretty and will be possibly the tip of the iceberg as we head into May.

Good morning. In 2021, Facebook moved away from being a social media company and towards what it thought was the next generation of technology. They even renamed the company Meta Platforms (META), reflecting the company's new focus on the metaverse.

Billions of dollars later, there isn't much to show for that. Now, Meta is building its own AI model, which the company thinks could challenge that of OpenAI with a more powerful version. Meta even claims it will be open-source, making it easier for developers.

If this is anything like Facebook's pivot to the metaverse, it may be a sign that the initial AI mania is starting to peak. Investors may want to look at parts of the market that haven't taken off instead. And traders may want to look for opportunities to profit from declining AI company shares in the months ahead.

Now here's the rest of the news:

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MARKETS
DOW 34,663.72 +0.25%
S&P 4,487.46 +0.67%
NASDAQ 13,917.89 +1.14%
*As of market close
Stocks rallied on Monday, ahead of a data-heavy week.
Oil dropped 0.4 percent, going for $87.19 per barrel.
Gold rose 0.2 percent, trading for $1,946 per ounce.
Cryptocurrencies traded lower, with Bitcoin at $25,039 at the stock market close.

Today's TOP TIPS
Certainty Can Drive Stocks Higher
Investors don't like uncertainty. They tend to give a company a lower valuation when its future outlook appears grim. That could occur for a variety of reasons, such as a series of poor earnings reports. Or there could be some kind of tax or legal overhang on shares.

Resolving those issues could benefit shares. Besides providing an immediate boost, it could also set up a stock for a longer-term move higher. Investors who buy after the uncertainty immediately disappears can still see great upside.

» FULL STORY

Insider Activity Report: Penn Entertainment (PENN)
Felicia Hendrix, CFO at Penn Entertainment (PENN), recently bought 11,162 shares. The buy increased her stake by 66 percent, and came to a total cost of $250,140.

The buy comes a few weeks after a director bought 20,000 shares in August, paying just over $453,000 to do so. Otherwise, two directors sold shares earlier in the year, with one of those sales coming from an options exercise.

» FULL STORY

Unusual Options Activity: PepsiCo (PEP)
Beverage and snack food giant PepsiCo (PEP) is slightly up over the past year, although shares have been sliding in recent sessions. One trader is betting on a continued decline in the next two months.

That's based on the November $170 puts. With 66 days until expiration, 11,152 contracts traded compared to a prior open interest of 309, for a 36-fold rise in volume on the trade. The buyer of the puts paid $2.26 to make the bearish bet.

» FULL STORY

IN OTHER NEWS
Qualcomm to Supply Apple with 5G Modems Through 2026

Chipmaker Qualcomm (QCOM) has announced that it will supply Apple (AAPL) with 5G modems in a deal through 2026. Previously, the companies expected Apple to start internally developing a 5G modem starting in 2024. Sales to Apple account for over 20 percent of Qualcomm's revenue.
Insurers Charging Thousands of Dollars for Generic Drugs

Health insurers are significantly marking up the prices of generic drugs for a variety of diseases including cancer and multiple sclerosis. The bills can go as high as $6,600 per month for Gllevec prescriptions, as insurers are able to set the price with pharmacies. Typically, once a patent runs out, generic drugs drive prices down significantly.
Smucker's Makes $5.6 Billion Bid to Buy Hostess

Hostess Brands (TWNK) shares jumped nearly 20 percent on Monday, following the news that J.M. Smucker Co. (SJM) would buy the company in a cash and stock deal valued at $5.6 billion. The merger would increase Smucker's holdings in the snack food and dessert space.
BMW to Build EV Versions of the Mini Cooper in the U.K.

Carmaker BMW (BMWYY) is investing about $750 million to build two electric versions of the Mini Cooper car in the United Kingdom. BMW had owned the British brand since 1994, and has secured an investment from the U.K. government to produce the car at factories in Oxford and Swindon.
Roblox to Launch Avatar-Based Voice Calls

Metaverse company Roblox (RBLX) is adding in more services to expand its services beyond a gaming platform for kids. The company is introducing an animated video calling product, which would allow two avatars in a virtual space to interact. Motion-capture technology would mimic facial expressions of the user via their avatar.

S&P 500 MOVERS
TOP
TSLA 9.988%
CVS 4.184%
QCOM 3.99%
AMZN 3.841%
SYK 3.784%
BOTTOM
RTX 8.044%
SJM 7.07%
NWL 6.489%
VFC 5.878%
MRO 4.174%

Quote of the Day
When you think of the economy, it's a Catch-22 for investors. If it looks like we're going to avoid the hard landing, we get some good economic news, and there's a sigh of relief quickly followed up by an increased expectation of Fed rate increases.
- Bryce Doty, portfolio manager at Sit Investment Associates, on why good economic news leads the market lower, as it indicates interest rates may need to stay higher for longer.

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