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Good morning traders. 👋 I think there’s a lot to unpack in the markets right now. The buzz around Google’s "Willow" release and the potential of quantum computing has caught my attention. I feel like everyone’s asking: is quantum the next big theme? But Nvidia’s CEO, Jensen Huang, threw cold water on the hype by saying that practical quantum computers are still 15–30 years away.
What’s Happening with Quantum Stocks?
I think quantum stocks took a major hit after Huang’s comments. D-Wave’s CEO disagrees, claiming his company is "commercial today," but the market didn’t seem convinced. I feel it’s important to note how shares of IonQ (-39%), D-Wave (-36%), and Rigetti (-45%) all dropped sharply. These stocks had previously surged on optimism, but Huang’s timeline shifted sentiment dramatically.
U.S. Market Closure for National Day of Mourning
Today, I feel it’s important to acknowledge that U.S. stock markets are closed in observance of a National Day of Mourning for former President Jimmy Carter. Bond markets will also close early, and federal institutions will suspend operations.
AMD Struggles After Downgrade
AMD shares dropped over 4%, and I think this reflects growing concerns about its competitive position. HSBC’s downgrade pointed to a "less competitive" AI GPU roadmap compared to Nvidia’s, highlighting challenges AMD faces in this high-stakes market.
Thoughts with Los Angeles
I feel deeply for the people of Los Angeles, who are facing significant challenges with wildfires. State Farm’s 2024 cancellations have left 72,000 California properties without coverage, including 1,600 homes in Pacific Palisades. At the time of writing, 75% of the area has burned down, and 0% of the fires are contained. It’s a stark reminder of how critical risk management is in all aspects of life.
Movers & Shakers
eBay (+9.86%): I think eBay’s surge is exciting. The partnership with Meta to feature select eBay listings on Facebook Marketplace could significantly boost its visibility in the competitive e-commerce landscape.
Edison International (-10.18%): I feel Edison’s drop reflects the immediate impact of the Los Angeles wildfires. This has been their worst trading day since March 2020.
Getty Images (-17.61%): I think Getty’s reversal shows how mergers can spark volatility. The $3.7 billion merger with Shutterstock initially excited investors, but the subsequent selloff highlights the market’s uncertainty.
SolarEdge Technologies (-14.78%): I feel Citi’s downgrade to "sell" from "neutral" hit SolarEdge hard. High operating expenses and restructuring challenges seem to have spooked investors, despite earlier optimism.
What I’m Watching
Euro Area Retail Sales (11:00 AM): I think this data could give us insights into the region’s consumer spending trends.
US Initial Jobless Claims (2:30 PM): I feel this report is critical for gauging the health of the U.S. labour market.
Macro Trends to Note
I think the regional banking sector’s struggles are noteworthy. ETFs like KRE and KBE are facing consistent declines, reflecting broader challenges in the sector.
UK bond yields are also grabbing my attention. With 10-year rates at 4.82%, I feel this is a warning sign for inflation and economic recovery concerns. Similarly, rising U.S. Treasury yields are keeping the markets on edge, impacting borrowing costs and investor sentiment.
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Note: Prices and figures quoted were correct at the time of writing.
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