| To: Johnny Canuck who wrote (60335) | 10/10/2024 2:37:56 AM | | From: Johnny Canuck | | | | Competition and the clock: how Google plans to deflect and delay a historic break-up threat
Search group claims regulators are overreaching just as foreign and domestic rivals are gaining ground
 Legal timelines involved in the complex and high-stakes case are likely to allow Google to put off any impact on its business for years © FT montage/Dreamstime
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A court-ordered break-up of Google would be unprecedented in modern American corporate history, delivering a blow to the Big Tech company that even Microsoft ultimately dodged when it lost its own US antitrust case two decades ago.
Yet for the legal team tasked with mounting Google’s response to the potential sanctions that the Department of Justice revealed on Tuesday night, the case could hardly have landed at a better time.
Google’s initial response to the DoJ’s proposals — that competition is “thriving” in search ads and “fierce” in artificial intelligence — would have been less convincing even two years ago, before OpenAI’s launch of the breakthrough ChatGPT chatbot.
Spinning out its arguments through the appeals courts will be crucial to Google’s strategy as it looks to deflect or delay the effects of August’s landmark ruling by a federal judge that it maintained an illegal monopoly by paying billions of dollars to device makers, mobile carriers and browser developers.
The legal timelines involved in such a complex and high-stakes case are likely to allow Google to put off any impact on its business for years. It plans to appeal the liability decision when the judge rules on remedies, which is likely to be in mid-2025, and may then also contest the remedies themselves.
Google executives are feeling a degree of whiplash after a period of heightened anxiety from investors that the company was falling behind in the AI race, just as it faced three separate lawsuits accusing it of abusing its dominance in search, advertising and mobile platforms.
With new search advertising competitors, such as Amazon and TikTok, emerging and widespread disruption to its core business from AI start-ups, including OpenAI and Perplexity, Google can argue that it is facing the stiffest competition since Microsoft’s Bing launched 15 years ago.
On Tuesday, for example, Google pointed to an Emarketer forecast that its share of US search advertising spending would fall below 50 per cent next year for the first time since the research group started tracking the market in 2008 — primarily due to rapid growth in Amazon’s marketing business.
However, the DoJ successfully made the case that Google monopolises a narrower market for general search engines, making Amazon’s inroads irrelevant from the court’s point of view. Google still handles more than 90 per cent of online search queries, according to StatCounter.
Broadly, Google’s argument focuses on what it describes as regulatory “over-reach” following a case about the impact of its distribution agreements. Forcing it to divest assets or share data with competitors would “go far beyond the specific legal issues in this case”, it said in a blog post on Tuesday.
Requiring Google to split off its Chrome browser or Android operating system, or other “structural” remedies, would “tilt the field at the precise moment that competition is thriving”, the company said.
Instead, Google would prefer any remedies to focus on the contracts it strikes with the likes of Apple and Mozilla, the Firefox browser maker, the company said. Even then, Google argues it should still be allowed to pay those partners for distribution, as long as those deals do not demand exclusivity.
John Kwoka, professor at Northeastern University, disagreed, saying Google was “a complicated company that has an awful lot of operating levers to achieve what it wants, and so it needs to be matched with an equally wide set of complementary remedies, up through and including divestitures where necessary”.
He pointed to a long history of companies evading the effects of regulators’ “conduct” remedies — a risk raised by the DoJ, which warned that “mechanisms and incentives for circumvention are endless”.
“This filing is an important stake in the ground and says ‘if we need to, we’re going to take a crack at this’,” Kwoka said. The DoJ was likely to argue that structural remedies were “necessary, that nothing else will work”, he added.
Google has meanwhile invoked the spectre of AI competition from China — without mentioning the country directly — to argue that weakening the Silicon Valley company would amount to undermining the US on the international stage.
Forcing it to share the “secret sauce” behind its search engine, such as data and algorithms, could put sensitive consumer information in the hands of China’s Baidu or Russia’s Yandex, Google suggested. Such companies might not uphold its own standards of privacy or security, it added.
“Government over-reach in a fast-moving industry may have negative unintended consequences for American innovation and America’s consumers,” it wrote in its blog post. “It’s hard to think of a technology more important for America’s technological and economic leadership [than AI].”
 The Google case is overseen by Jonathan Kanter, a progressive antitrust official appointed by President Joe Biden © Bloomberg
The DoJ saw things differently, arguing that the company’s “ability to leverage its monopoly power to feed artificial intelligence features?.?.?.?risks further entrenching Google’s dominance”.
The company is likely to appeal its antitrust cases all the way up to the US Supreme Court. “This is the start of a long process,” it said in Tuesday’s blog post.
Yet Jason Kint, a Big Tech critic who leads the Digital Content Next trade group of online publishers, said it was not a given that the Supreme Court would take up the case.
He estimated that it could take two or three years for any remedies to be enforced if the case proceeds through the courts, adding: “The reality is Google is racking up [legal] losses, they have a difficult set of facts along with spoliation from purging evidence and they may try to settle or proactively make moves to control the outcome.”
The case is one of the most high-profile legal challenges overseen by Jonathan Kanter, one of the progressive antitrust officials appointed by President Joe Biden who has clamped down on anti-competitive conduct across the US economy.
Considering Google’s willingness to file appeals against the judge’s ruling, Kanter may no longer be heading the DoJ’s antitrust division by the time the case reaches completion.
November’s presidential election could also affect the outcome. Microsoft was able to reach a settlement with the George W Bush administration in 2001, less than a year after the Republican president had been elected.
However, any new Republican administration next year may not necessarily threaten the tougher policy introduced under Biden. Big Tech has attracted bipartisan ire in Washington in recent years, and a new generation of populist conservatives — including JD Vance, Republican candidate Donald Trump’s vice-presidential pick — have praised Washington’s more aggressive antitrust stance.
A second Trump White House may avoid undermining the Google search case in particular as it was originally filed during his first administration.
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There was a possibility that new DoJ officials might “go soft” on remedies or in a potential appeals process, Kwoka said, citing Trump’s unpredictability and Democratic presidential candidate Kamala Harris’s apparent openness to meeker antitrust policy. But, he added, “Big Tech doesn’t have the deference it did five years ago from either party, so?.?.?.?some version of this will probably go ahead.”
Google also faces other threats. Earlier this week, a California judge ordered it to open Android to rivals so they can create their own app marketplaces to compete with Google Play. The DoJ is separately suing Google for its alleged monopolistic control over digital advertising.
Yet, despite these blows, Wall Street’s reaction has been sanguine. Shares in Alphabet, Google’s parent company, fell only 1.5 per cent on Wednesday, leaving its market capitalisation just below $2tn, and maintaining its position as the world’s fourth-largest listed company.
The DoJ’s proposal “goes a mile wide and an inch deep”, analysts at Bernstein said: “As expected, the remedy set was far-reaching and light on specifics, though we remind readers that this is only the first inning of the battle.” |
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| To: Johnny Canuck who wrote (60336) | 10/10/2024 3:18:03 AM | | From: Johnny Canuck | | | | 
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2 Dividend Stocks to Double Up on Right Now
John Ballard, The Motley Fool
Wed, Oct 9, 2024, 2:20 AM PDT4 min read
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In this article:
Investing in stocks of strong companies that offer unusually high yields relative to their dividend-paying history can help you populate your portfolio with winners. Here are two dividend stocks that are paying their highest yield in years. You might want to give them added consideration. Here's why.
1. NikeRight now, investors have the opportunity to buy shares of one of the most iconic brands in the world while they trade at a discount. Sports apparel conglomerate Nike (NYSE: NKE) generates $50 billion in annual revenue making it, among other things, the global leader in footwear. But Nike's stock price has fallen 54% from its previous peak over weak consumer spending. The lower share price pushed Nike's forward dividend yield up to an above-average 1.83% based on a current quarterly per-share payout of $0.37 -- the highest yield since 2009.
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Nike recently hired former company veteran Elliott Hill as its new CEO. The hire has the company's teams upbeat about the future, which is a great sign. While a return to growth is expected to take some time, Hill's experience in leading the company's commercial and marketing operations for Nike and Jordan Brand across four geographies should be valuable in engineering a turnaround.
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Verizon has paid a dividend every year for 40 years, including all the companies that were merged over the years to create what is today Verizon Communications. The current per-share quarterly dividend is $0.6775, representing a payout ratio of 60% based on adjusted earnings guidance for 2024. With strong demand expected for AI-enabled smartphones over the next several years, buying Verizon shares at their current high yield should lead to excellent returns for investors.
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2 Dividend Stocks to Double Up on Right Now was originally published by The Motley Fool
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| To: Johnny Canuck who wrote (60337) | 10/10/2024 3:20:16 AM | | From: Johnny Canuck | | | | Subscribe
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Forbes Innovation Enterprise Tech
Qualcomm Has Become A Leader In Automotive Automation
Karl Freund
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Founder and Principal Analyst, Cambrian-AI Research LLC
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Oct 8, 2024,06:56pm EDT
Updated Oct 9, 2024, 07:27pm EDT
Qualcomm's auto-related revenue jumped 87% year over year in the second quarter this year, well ahead of rivals Nvidia and Mobileye. Qualcomm estimated its automotive pipeline to be $45B earlier this year, double that of the previous year.
Qualcomm's automotive efforts are critical to the company’s growth and diversification strategy. Automotive technology includes infotainment, advanced driver assistance systems (ADAS), and other systems that support the transition to software-defined vehicles. According to the company, almost every major automotive OEM is adopting Qualcomm's Snapdragon platform and digital chassis strategy. To prove that point, Qualcomm is equipping over 115 vehicle models that were launched in FY24. Two significant wins announced last year were for Mercedes Benz and BMW for infotainment applications.
I recently spoke with Laxmi Rayapudi, Qualcomm's Vice President of Product Management, to learn what Qualcomm is doing to meet the needs of major automotive companies. Automotive silicon is a huge opportunity: QTI estimates it to be a $100B market by 2030. Qualcomm’s focus on edge AI and on-device inference processing positions the company well to succeed in the exploding automotive segment.
"The integration of AI in the automotive sector is revolutionizing how we drive, enhancing safety, efficiency, and the overall driving experience,” said Laxmi. “Qualcomm's groundbreaking advancements in AI technology (on edge) are at the forefront of this transformation, enabling vehicles to become smarter, more connected, and capable of making context-aware real-time decisions that improve both performance and safety on the road."
Leveraging the Snapdragon SOC designed for low-power AI, Qualcomm has created a leadership position as its competitors struggle to deliver the computational horsepower needed for ADAS and the required graphics-intensive work for cockpit infotainment. Qualcomm refers to its SoC as the first integrated automotive super-compute class System-on-Chip, the Snapdragon Ride Flex SoC.
Qualcomm's Digital Chassis offers a more complete, one-stop-shop approach to integrating multiple automotive technologies under a single platform. This includes ADAS, infotainment, telematics, connectivity, and car-to-cloud services, providing automakers with a comprehensive modular platform. Qualcomm's connectivity solutions surpass competitors, including 5G, LTE, Wi-Fi, and Bluetooth integration.
Qualcomm is also very flexible. Auto OEMs can select which workloads to run on the Snapdragon. For example, they could use Nvidia for ADAS and Qualcomm for Infotainment and connectivity.
Qualcomm has integrating the various functions [+]needed for an auto onto a single, software-defined architecture.Qualcomm
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Qualcomm sees the future as being powered by a centralized compute facility, aggregating domain-specific functions to reduce latencies and lower costs.
Qualcomm believes that today’s Domain-controller [+]centric architecture will evolve to become more centralized and integratedQualcomm
ConclusionsQualcomm's automotive revenue in the most recent quarter was $811 million, an 87% increase from the same quarter in 2023. AI at the edge is certainly alive and well for the company, far outstripping Nvidia’s automotive business. Many analysts believe that the automotive market could reach over $100B by 2030, so this is not an insignificant market by any stretch, and Qualcomm seems to have the right mix of compute, graphics and communication technologies the market is looking for.
I’m hoping to learn more about Qualcomm’s Auto strategy and roadmap at the upcoming Snapdragon Summit event which takes place later this month. Stay tuned!
Follow me on Twitter or LinkedIn. Check out my website.
Disclosures: This article expresses the author's opinions and
should not be taken as advice to purchase from or invest in the companies mentioned. Cambrian-AI Research is fortunate to have many, if not most, semiconductor firms as our clients, including Blaize, BrainChip, Cadence Design, Cerebras, D-Matrix, Eliyan, Esperanto, GML, Groq, IBM, Intel, Micron, NVIDIA, Qualcomm Technologies, Si-Five, SiMa.ai, Synopsys, Ventana Microsystems, Tenstorrent and scores of investment clients. We have no investment positions in any of the companies mentioned in this article and do not plan to initiate any in the near future. For more information, please visit our website at cambrian-ai.com.
Karl Freund
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| To: Johnny Canuck who wrote (60338) | 10/10/2024 11:41:44 AM | | From: Johnny Canuck | | | | Zuckerberg’s metaverse is finally showing signs of life, but it’s not from VR
Published Thu, Oct 10 20249:00 AM EDT
Salvador Rodriguez @sal19
Jonathan Vanian @in/jonathan-vanian-b704432/
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Key Points
- The company formerly known as Facebook appears to have found its footing in virtual and augmented reality through smart glasses.
- Following the Orion smart glasses showcase, Meta is preparing to strengthen its relationship with software developers as it works toward building a consumer version of the device.
- The company is also pushing its current generation of Ray-Ban Meta smart glasses to more consumers for the 2024 holiday shopping season.
In this article
Meta CEO Mark Zuckerberg presents Orion AR Glasses, as he makes a keynote speech during the Meta Connect annual event, at the company’s headquarters in Menlo Park, California, U.S. September 25, 2024.
Manuel Orbegozo | Reuters
When Facebook changed its name to Meta in October 2021, CEO Mark Zuckerberg used the occasion to show the world his vision of a digital future of work and recreation accessible through a virtual reality headset. The company soon opened its play universe called Horizon Worlds, featuring floating personalized avatars.
As the rebranding to Meta approaches its third anniversary, none of that stuff has gone mainstream.
But the company appears to have found its footing in virtual and augmented reality through a different medium.
After achieving surprise early success in the smart glasses market through a partnership with Ray-Ban, Meta is ginning up excitement for the prototype of a much more advanced pair of glasses called Orion, a project nearly a decade in the making. Zuckerberg’s reveal of Orion late last month has triggered a level of enthusiasm that’s unfamiliar in the metaverse.
The triumphant demo, at Meta’s annual Connect event, was a relief to many employees and represented an internal shift in sentiment toward Zuckerberg’s costly hardware ambitions, according to people close to the company who asked not to be named because they weren’t authorized to speak to the press on the matter.
At the start of the demo, Zuckerberg pulled the device out of a locked metal briefcase. He showed off the gadget — a pair of black, thick-framed AR glasses — to the live audience before placing it on his face. Orion comes with a wireless puck that allows it to run holographic virtual images on top of what users see in real life. It also relies on a wristband that picks up on a user’s neural signals to let them control the device.
The demo was seamless. The crowd oohed and aahed. Rave product reviews followed from the few who got to test it. CNBC’s Julia Boorstin described a call she had with her producer, saying, “It was like I was FaceTiming with him but he was in my glasses.” The Verge’s Alex Heath played Zuckerberg in a game of Pong and wrote that he “noticed little to no lag in the game.”
“The right way to look at Orion is as a time machine,” Zuckerberg said at Connect. “These glasses exist, they are awesome and they are a glimpse of a future that I think is going to be pretty exciting.”
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Meta’s Orion AR glasses prototype: CNBC reviews
Following the Orion showcase, Meta is preparing to strengthen its relationship with software developers as it works toward building a consumer version of the device, and to pushing its current generation of Ray-Ban Meta smart glasses to more consumers for the 2024 holiday shopping season.
The company is also looking at ways to bring the technology developed for the Orion wristband to its other consumer devices, notably the Quest VR headsets and the Ray-Ban Meta smart glasses, according to a person familiar with the matter.
For Meta, the uptick in excitement among employees and users comes well after Wall Street jumped back into the stock. After the company lost almost two-thirds of its value in 2022 and then slashed about a quarter of its workforce, or 21,000 jobs, Meta’s stock price almost tripled last year and is up more than 60% in 2024, reaching a fresh high this month.
Meta proved the resilience of its dominant online advertising business, rebuilding the underlying technology after Apple’s iOS privacy change made it harder to target users, and adding generative artificial intelligence tools to make it easier for brands to run campaigns.
But proving that it can mimic its digital ad success in a totally different market has been a persistent challenge.
Facebook’s initial foray into VR came in 2014 with the $2 billion purchase of Oculus. Since then, the company has poured more than $63 billion into what’s now called Reality Labs, its AR and VR hardware and software division, and it’s recording operating losses in the billions of dollars per quarter.
In the second quarter, Reality Labs generated just $353 million in revenue, accounting for less than 1% of the company’s total sales. Industrywide, global shipments of VR and AR headsets in the period sank roughly 28% from a year earlier to 1.1 million units, according to market researcher IDC.
“This is a very long-term bet,” Zuckerberg said in July 2023. “At a deep level, I understand the discomfort that a lot of investors have with it because it’s just outside of the model of I think even most long-term investors.”
Orion provides a tangible example of the company’s strategy and a logical and compelling next step following smart glasses, people familiar with Reality Labs told CNBC.
Meta declined to comment.
A project 10 years in the making
Meta is planning to start courting developers next year, as it tries to get them excited about building apps for Orion so the company can learn what might resonate with consumers, according to people familiar with the company’s road map.
The push into the developer community would coincide with Meta’s expected debut of the fourth generation of its Llama family of AI models. By releasing a more powerful Llama, Meta is hoping that developers would be able to incorporate the software in their future AR apps to help power tasks like recognizing real-world objects and more accurately reacting to voice commands, the people said.
Ultimately, Meta is working toward building a consumer version of Orion, something that could happen within two years, they said.
That timeline may be overly ambitious considering how long it took to get Orion this far.
Facebook began working on the device as far back as 2016 under the leadership of Oculus’ then chief scientist, Michael Abrash, according to people familiar with the matter. Abrash is now chief scientist at Reality Labs.
Meta employee Sara Nicholson poses with the Ray-Ban sunglasses at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, U.S., September 24, 2024.
Manuel Orbegozo | Reuters
In 2018, the project was moved out of research and development and was put on the product path under the guidance of Andrew “Boz” Bosworth, who was Facebook’s head of hardware at the time and is now Meta’s technology chief.
At one point, the company had a version of the device that offered AR visuals but it had to be in extremely controlled settings to work, the people said. For example, visuals didn’t work outdoors, they said.
Meta has been testing functioning versions of Orion glasses for well over two years, the people said, getting the product to a point where it could finally be unveiled to the broader company and to outsiders. The company finished the prototype in March. Engineers put a lot of work into getting the device to weigh less than 100 grams (3.5 ounces), about twice the weight of a heavy pair of glasses, and to have a 70-degree field of view, sources said.
Zuckerberg, who’s been the driving force behind the company’s advances in AR and VR, made the ultimate decision to go public with Orion, the people said.
Building on surprise success
Meta is likely years away from being able to deliver a consumer version of Orion and has numerous challenges to overcome to reach mass production.
“One could criticize Orion as vaporware,” Joseph Bonner, an analyst at Argus Research, wrote in a report to clients on Oct. 4, referring to “technology that may not end up in an actual product.” Bonner, who recommends buying the stock, said the product demonstrates “Meta’s continued commitment to virtual and mixed reality applications.”
Meta will need to develop a global manufacturing supply chain that can account for some of the rare materials used in the device. One particular hurdle will be figuring out how to get mass quantities of silicon carbide, which is used for the displays in the Orion lenses.
Meta recently hired someone from semiconductor contract manufacturing company GlobalFoundries to help develop and oversee the supply chain for Orion and related AR and VR devices, people with knowledge of the matter said.
In the meantime, Meta is looking to build on the success of its second-generation Ray-Ban Meta smart glasses.
Released in partnership with EssilorLuxottica in September of last year, the product featured a number of upgrades, including better camera quality, improved battery life and an AI voice assistant.
The smart glasses went viral on TikTok during the holiday shopping season, and sales exceeded both companies’ expectations. More than 730,000 units have been sold in their first three quarters since release, according to IDC. Zuckerberg told investors in July that they were “a bigger hit sooner than expected.”
Last month, Meta and Luxottica agreed to extend their partnership, with plans to release a bulkier, third generation of their glasses in time for the coming holiday season. The new device is expected to include a small display in one of the lenses, people familiar with the matter said.
A Luxottica representative didn’t respond to a request for comment.
Meta is also opening a pop-up shop to showcase the smart glasses and to get them in front of more consumers.
The pop-up shop will be at a retail space in Los Angeles. A job post by BDS Connected Solutions says the company is looking for retail staffers in the West Hollywood neighborhood.
“We’re staffing up for the ultimate Meta pop-up experience in the heart of Los Angeles,” BDS says in a post on X. “With lowriders, street vibes, and everything that makes LA iconic, this pop-up is a true celebration of Southern California culture.”
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| To: Johnny Canuck who wrote (60339) | 10/10/2024 11:46:11 AM | | From: Johnny Canuck | | | | Stellantis is struggling. Here’s why
Published Thu, Oct 10 20248:00 AM EDT
Robert Ferris @in/robert-ferris-a482061/ @RobertoFerris
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Here’s why Stellantis is struggling
In this article
American car brands Jeep, Ram, Dodge and Chrysler are struggling under their new owner.
The European-American giant Stellantis is the world’s fifth-largest automaker by volume, according to S&P Global Mobility. The 2021 merger of the French maker Groupe PSA and the American-Italian Fiat Chrysler promised billions of dollars of savings in synergies and new opportunities for brands spanning two continents to share the burden of developing costly new technologies such as electric vehicles and software.
Some of those promises came to fruition.
“At first, the market was quite doubtful whether Stellantis could pull off the $5 billion in synergies between the two companies that they had announced,” said Daniel Roeska, managing director at Bernstein.
But Stellantis did better than that.
“They managed to pull off $8 billion,” he said. “And then they stopped counting.”
2023 was a banner year: record sales, record profits, record free cash flow.
Behind those results, all kinds of problems lurked.
Customers balked at high prices. Products grew stale, while competitors refreshed their own lineups. Product quality complaints dogged the company, especially on new Jeep models with price tags that ran above $100,000 — new territory for the brand.
Sales in the first half of 2024 fell 14% and profits plummeted by nearly half, the company said . Shares of the stock have also fallen, from an all-time high of $29.51 in March to just above $13 in early October.
At the heart of this are high inventories in North America, the home of the Jeep and Ram truck brands, estimated by RBC Capital to make up about 50% of Stellantis’ profits.
Out of all brands in the U.S., Stellantis vehicles have some of the highest inventories of vehicles on dealer lots, according to Cox Automotive. That means they aren’t selling.
“North America operations were highly profitable and kind of seen as a little bit of a cash cow,” said Stephanie Brinley, director of the AutoIntelligence unit at S&P Global Mobility. “Maybe the idea was it could run itself with not much influence. But it still needed support.”
Now dealers are furious — the company’s council of dealers in North America sent an open letter to Stellantis’ top management, including CEO Carlos Taveres, accusing them of ignoring warnings and making mistakes that have led to the company’s struggles.
The United Auto Workers union is threatening to strike again. Disputes with suppliers have ended up in the courts.
“The whole discussion on Stellantis has basically collapsed,” Roeska said. “We’re not talking about free cash flows. We’re not talking about long-term EV strategy. We’re not talking about market position or the China Leapmotor joint venture. We’re only talking about how much will it cost the company to get rid of the U.S. inventory.”
Stellantis does have a lot of new products expected in the next few years, and a highly flexible platform that can accommodate multiple powertrains — EVs, hybrids and old-fashioned gas-burning cars. That could help it weather an uncertain time in the auto industry when demand for EVs is rocky and unpredictable.
But the next six to 12 months could also be quite rocky.
Watch the video to learn more.
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| To: Johnny Canuck who wrote (60340) | 10/10/2024 11:59:58 AM | | From: Johnny Canuck | | | | |
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| Morgan Stanley just met with Nvidia’s CEO and came away even more confident in their top pick |
Published Thu, Oct 10 2024•11:33 AM EDT
Pia Singh @in/piasingh72/ @pia_singh_
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Nvidia remains at the forefront of AI innovation, with new opportunities to gain market share, Morgan Stanley said. Analyst Joseph Moore reiterated his overweight rating on the chipmaker and said meetings with Nvidia’s CEO and other management reinforced the firm’s view that it is the top pick in semiconductors. Morgan Stanley hosted the company for a three-day non-deal road show this week. “We remain very bullish longer term, but would concede given the rally that shorter-term upside from here raises the bar on earnings somewhat,” Moore said in a Thursday note to clients. His $150 price target implies about 13.1% potential upside for the stock, which has skyrocketed nearly 167% this year. “This is still an exceptional situation, with AI the most important trend in technology, and NVIDIA unquestionably the biggest beneficiary of those investments,” he said. Long-term confidence in Nvidia’s growth remains high, the analyst said. Management highlighted opportunities in evolving generative AI inference that will scale exponentially involving “long thinking” — or inference interactions that require substantially more computation. Moore explained that these tasks will require a “much richer mix of hardware” that will provide Nvidia with a new avenue for growth. “NVIDIA’s upcoming rack scale products as an optimal solution,” Moore said. “The longer term vision is that deep thinking will allow every company in the world to hire large numbers of ‘digital AI employees’ that can execute challenging tasks.” According to Moore, Nvidia’s Blackwell systems NVL36/72 are the optimal solution for those challenges, as he believes they provide a more capable processor to the AI markets, with the GB200 systems potentially being the most important innovation as they have a “full rack” approach. Under that approach, Nvidia enables 36 or 72 GPU racks to simultaneously communicate with other graphic processing units, enhancing the ability to treat the entire rack as one massive system. “Our view continues to be that NVIDIA is likely to actually gain share of AI processors in 2025, as the biggest users of custom silicon are seeing very steep ramps with NVIDIA solutions next year,” Moore said. The analyst is also confident that the Blackwell rollout is on schedule, with orders booked out roughly 12 months, which also drives strong-short term demand for Nvidia’s Hopper GPU architecture. “In the shorter term, the Blackwell ramp appears to be quite strong, with no major changes to the roadmaps and every indication that business remains robust with very high forward visibility,” Moore said. NVDA YTD mountain Nvidia stock this year. To be sure, even as Morgan Stanley doubles down on its Nvidia bull case, the company’s near-term growth story has some skeptics. Citi analyst Atif Malik maintained his buy rating on the artificial intelligence darling, but said he’s expecting Nvidia’s margins to bottom out early next year as its Blackwell platform will take time to fully ramp up. The stock will likely remain range bound, he said. Some analysts, including Fairlead Strategies’ Katie Stockton, also want to see Nvidia surpass its intraday high around $140 before adding new exposure. Shares closed down slightly on Wednesday at $132.65, just short of the stock’s closing high of $135.58 met in June.
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| To: Johnny Canuck who wrote (60341) | 10/10/2024 12:31:58 PM | | From: Johnny Canuck | | | | Groceries are more affordable now than in 2019. So why are people still so mad about prices?For the average worker, grocery prices are about as affordable as they were pre-pandemic. But the costs are still a sore spot for consumers — and a focus in the 2024 election.
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Hannah Erin Lang
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Last Updated: Oct. 10, 2024 at 9:39?a.m. ET
First Published: Oct. 10, 2024 at 6:00?a.m. ET
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 By one measure, groceries are back at pre-pandemic levels of affordability. But it might not feel that way.Photo: MarketWatch photo illustration/iStockphoto
For more than two years now, higher prices have been pinching consumers’ wallets and testing their patience — but there’s at least one part of their monthly budget that has more breathing room these days: For the average U.S. worker, it now takes fewer hours of work to afford a week’s worth of groceries than it did five years ago, in August 2019.
That’s according to a MarketWatch analysis of wage and inflation data that shows how the price of food relative to wages has fluctuated in recent years.
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In other words: Despite substantial postpandemic increases in food costs, wages have now more than caught up with prices in this crucial spending category. And it’s easier for the average American worker to put food on the table than it was a couple of years ago.
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Groceries are getting more affordableWhen you factor in rising wages, groceries cost about as much today as they did in?the pre-pandemic years.Hours of work to afford a week's worth of groceries:Source: Bureau of Labor StatisticsNote: Based on the average wage for production and non-supervisory employees and the 2019 annual?spending of a middle-quintile household on food at home, adjusted for inflation.
'05'10'15'201980'85'90'9520003.253.503.754.004.254.504.75
But many consumers may not feel that way.
Absolute prices themselves — the dollar amount you pay for eggs, milk and other items at the store — are still higher than they were before. That’s caused a long-lasting case of sticker shock for consumers.
Food price increases did pick up slightly in September, according to the latest consumer price index report from the Labor Department. The annual inflation rate for food at home was 1.3%, lower than the inflation rate for prices across the economy, which was 2.4%.
Groceries are a lot more affordable than other expenses like rent and insurance costs, economists say, and they sometimes don’t paint a particularly meaningful picture of the economy, or of Americans’ financial burdens.
In spite of that, food prices have remained top of mind for consumers, as well as in this year’s presidential election, as both Donald Trump and Kamala Harris have pledged to make spending on this staple more affordable for voters.
“This is a narrow sliver of what people spend their money on. But it’s something that is very memorable,” said Jeremy Horpedahl, an economist and director of the Arkansas Center for Economic Research. “It keeps hitting them in the head as they see these high prices, but we are headed in the right direction.”
Why are higher grocery prices still so painful? The annual inflation rate for groceries, which the government calls “food at home,” has slowed significantly since peaking at about 13.5% in August 2022.
But the impact of those price increases will reverberate for years, economists said.
That’s partly because most of us had gotten used to pretty consistent prices at the grocery store. Starting in the late 1990s, the “real,” or inflation-adjusted, cost of food actually fell consistently. Prices were steady as wages increased — meaning that, for years, weekly grocery hauls effectively got cheaper.
There’s also a classic disconnect in how economists analyze inflation in data sets versus how the majority of people experience it in their own lives. Policy makers look at the rate of change in prices, and are looking for slower increases, not lower price levels.
Inflation rate, food at home:Source: Labor Department via St. Louis FedNote: Seasonally adjusted.
RECESSION2010'15'20-5.0-2.502.55.07.510.012.515.0%
“Consumers,” in contrast, ”see prices, not inflation rates,” explained Paul Shea, an economist at Bates College in Maine. Even as the inflation rate comes down, and workers earn more, consumers remain anchored to the 2019 numbers — before the pandemic and the widespread supply-chain and supply-and-demand imbalances of the following years impacted them — they remember.
Grocery prices are a hot buttonEspecially compared with other regular expenses, grocery costs seem to be one piece of household budgets coming back into balance. Some stores have even taken the unusual step of lowering prices.
But that isn’t the case for every line item on your monthly budget. Rent and other housing costs, for example, have risen at a clip that the average American’s pay cannot keep up with, economists said. A similar dynamic is at play with insurance — for cars, homes and healthcare.
That puts additional strain on Americans’ wallets — and can make something like more expensive groceries feel even more distressing, Horpedahl explained.
‘The simple answer is that these are prices that they see the most frequently.’
— Economist Paul Shea on why grocery prices remain so important to consumers
You might not see car insurance come up very often on the campaign trail (though occasionally, it has). Food costs, though, have been a hot-button issue in the 2024 presidential race, being painted, and reinforced, as more or less dire depending on one’s media preferences.
Inflation has ranked among the most important issues in the election this year. Both major-party candidates have addressed food costs specifically.
Trump, a Republican, posted a graphic listing higher prices for items like salmon, chicken and coffee, stating that the figures were “the cost of Kamala,” referring to his Democratic rival, the current U.S. vice president.
Some prices listed on the Trump graphic don’t match those recorded by the Bureau of Labor Statistics. For example, the former president’s graphic stated that the price of eggs has increased to $4.99. The average price of a dozen eggs is currently $3.30, according to the BLS.
See: Trump and Dave Ramsey talk about ‘$8 eggs, $5 gas, 7% interest rates’ and unaffordable housing
In response to a request for comment on Trump’s post, his campaign provided a statement from Republican National Committee spokesperson Taylor Rogers, who said that Harris’s “dangerously liberal“ economic agenda has “sent food costs soaring”
“From cereal, baked goods, chicken and beef, eggs, and milk, Americans are paying the price of Kamala’s failed polices,” Rogers said in a statement.
Harris has included a plan to lower grocery costs in her economic-policy agenda, including a proposed federal law against price gouging at grocery stores and food suppliers, and a more aggressive approach to combating overconsolidation in the food industry.
“We all know that prices went up during the pandemic when the supply chains shut down and failed, but our supply chains have now improved and prices are still too high,” the vice president said while outlining her economic plan at a campaign event this summer.
But the candidates may be giving outsized attention to an aspect of inflation that, from an economist’s point of view, seems to be coming back into balance after the pandemic.
So what explains the focus on groceries? “It’s more psychological than economic,” Shea explained.
Most consumers visit the grocery store and the gas station on a regular basis. Those two recurring purchases, for the majority of consumers, serve as the best gauge of how the economy is treating them — and they remain front of mind. “The simple answer is that these are prices that they see the most frequently,” Shea said.
Interestingly enough, these two price categories — energy and food — are among the volatile readings that economists and policy makers often strip out when evaluating inflation data.
This doesn’t mean consumers’ interpretations of their own economic reality are invalid or incorrect, Shea said. Higher price levels will be a source of frustration until some impossible-to-guess point in time when we collectively adjust to a new “normal.”
But it does mean that, though food costs have become much more affordable as paychecks grow, grocery prices will remain a significant focus — at the very least through Election Day.
“For me, the big question is ‘How long before people get used to these higher prices?’ ” Shea said. “At some point, $4 for a gallon of milk becomes normal. I don’t know when that is.”
What personal-finance issues would you like to see covered in MarketWatch? We would like to hear from readers about their financial decisions and money-related questions. You can fill out this form or write to us at readerstories@marketwatch.com. A reporter may be in touch to learn more. MarketWatch will not attribute your answers to you by name without your permission. |
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| To: Johnny Canuck who wrote (60342) | 10/10/2024 12:44:53 PM | | From: Johnny Canuck | | | | AMZN Option Trade Could Unlock a 17% Annualized Profit
Gavin McMaster - Barchart - Thu Oct 10, 6:00AM CDT Follow this Author
Dollars and Wallets - stimulus money in the mail by Goir via iStock
Amazon ( AMZN) stock bounced nicely off the 50-day moving average and is also sitting above a rising 200-day moving average.
Amazon currently has a historically low PE Ratio of 43.30.
By using a combination of option strategies, we could potentially buy the stock for a significant discount, or achieve a healthy profit if the stock trades sideways.
Here’s the trade:
Sell to open the AMZN December 20 put with a strike price of $170, which was trading around $4.25 yesterday.
Then, add a bear call spread:
Sell to open the AMZN December 20 call with a strike price of $205, which was trading around $4.05 yesterday.
Buy to open the AMZN December 20 call with a strike price of $210, which was trading around $2.95 yesterday.
The sold put brings in around $425 in option premium, and the bear call spread adds another $110 in premium. In total, the combination of the two trades generates $535 in premium.
Here’s how the trade looks at trade initiation. The blue line represents the profit or loss at expiration and the purple line shows the trade as of today.
 The position starts with a delta of 19, meaning it is roughly equivalent to owning 19 shares of AMZN stock. This figure will change as the trade progresses.
This is how the trade could look in around one month’s time.
 Looking pretty good as long as the stock is above $175.
Possible Scenarios For This AMZN Stock Option Trade
Let’s work through a couple of scenarios of how this trade could look at expiration on December 20.
- If AMZN stock trades sideways and finishes between $170 and $205, the sold put and bear call spread will both expire worthless. The total profit will be equal to the premium received of $535.
- IF AMZN falls below $170 at expiration, we will be assigned on the sold put and will be forced to buy 100 shares at $170. However, our net cost basis will be $164.65, thanks to the $535 in option premium received. That is 11.08% below the closing price on Wednesday.
- If AMZN rallies above $210, the bear call spread will suffer a full loss of $500, but this will be fully offset by the $535 premium received, leaving the trade with a small profit of $35.
Company Details
The Barchart Technical Opinion rating is a 56% Buy with an Average short term outlook on maintaining the current direction.
Long term indicators fully support a continuation of the trend.
Of 46 analysts covering AMZN stock, 42 have a Strong Buy rating, 3 have a Moderate Buy rating and 1 has a Hold rating.
Implied volatility is 38.76% compared to a twelve-month high of 49.28% and a low of 22.12%. That gives AMZN stock an IV Percentile of 80% and an IV Rank of 61.25%.
Not that earnings are scheduled for October 24th which means this trade would have earnings risk if held through that date.
Amazon.com is one of the largest e-commerce providers, with sprawling operations spreading across the globe. Its online retail business revolves around the Prime program well-supported by the company's massive distribution network. Further, the Whole Foods Market acquisition helped Amazon establish footprint in physical grocery supermarket space. Amazon also enjoys dominant position in the cloud-computing market, particularly in the Infrastructure as a Service space, thanks to Amazon Web Services, which is one of its high-margin generating businesses. Amazon has also become a household name with its Alexa powered Echo devices. Artificial Intelligence backed Alexa is helping the company sell products and services. The company reports revenue under three broad heads'North America, International and AWS, respectively. Amazon targets three categories of customers - consumers, sellers and website developers.
Summary
While this type of strategy requires a lot of capital, it is a great way to generate an income from stocks you want to own.
If you end up being assigned, you can start selling covered calls against the stock position.
You can do this on other stocks as well, but remember to start small until you understand a bit more about how this all works.
Mitigating Risk
With any option trade, it’s important to have a plan in place on how you will manage the trade if it moves against you.
Some traders like to add a deep out-of-the-money long put to reduce risk. For example, a December 20 put option with a strike price of $130 could be purchased for around $65. Buying this put, would cap losses below $140 and reduce total capital at risk.
Please remember that options are risky, and investors can lose 100% of their investment.
This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions. |
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| To: Johnny Canuck who wrote (60343) | 10/10/2024 12:54:37 PM | | From: Johnny Canuck | | | | Personal Finance
Here’s the inflation breakdown for September 2024 — in one chart
Published Thu, Oct 10 202410:52 AM EDTUpdated 44 Min Ago
Greg Iacurci @GregIacurci
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Key Points
- The consumer price index rose by 2.4% in September 2024 on an annual basis, according to the Bureau of Labor Statistics.
- Inflation declined amid a pullback in gasoline prices and moderation in housing inflation.
- There were some trouble spots, however, such as groceries and car insurance.
David Paul Morris/Bloomberg via Getty Images
Inflation fell in September as lower gasoline prices combined with other waning price pressures in areas such as housing to bring relief to consumers’ wallets, according to the U.S. Bureau of Labor Statistics.
The consumer price index, a key inflation gauge, was up 2.4% last month from September 2023, the bureau said.
That figure is a decline from 2.5% in August, meaning price growth slowed. It’s also the smallest annual reading since February 2021.
The September CPI figure was slightly higher than economists predicted, however.
There were some trouble spots, such as an uptick in categories including clothing, car insurance and groceries. Most appear to be “one-off” increases, though, said Mark Zandi, chief economist at Moody’s.
“The trend on inflation remains very positive,” Zandi said. “This month was a blip and I don’t think it will be sustained.”
The CPI measures how quickly prices are rising or falling for a broad basket of goods and services, from car repairs to peanut butter and living room furniture.
Inflation has pulled back significantly from its pandemic-era peak of 9.1% in June 2022. It’s moving toward policymakers’ long-term annual target, near 2%.
“We have made substantial improvement over the past two years,” said Sarah House, senior economist at Wells Fargo Economics.
That said, a slowdown in the labor market has concerned economists more than inflation in recent months.
The U.S. Federal Reserve, which had raised interest rates sharply to combat high inflation starting in early 2022, began cutting them in September to take pressure off the labor market and economy.
Prices fall at the gas pump
A pullback in gasoline prices has helped inflation throttle back.
A gallon of regular gasoline cost $3.21 in September, down 16% from $3.84 a year ago, according to the U.S. Energy Information Administration.
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Gasoline prices declined about 4% during September alone, according to CPI data.
Gasoline is refined from crude oil. Oil prices hit a nearly three-year low in September amid weak demand in China, the world’s largest importer, and concerns of oil supply outstripping demand. Prices have jumped in October, however, due to factors such as heightened geopolitical risk in the Middle East and Hurricane Milton.
Annual food inflation is ‘fairly tame’
Frederic J. Brown | AFP | Getty Images
Food inflation over the past year has also been “fairly tame,” House said.
Grocery prices are up 1.3% since September 2023, according to the CPI.
Prices for agricultural commodities — a “major input cost” for food — have either fallen or look “more stable,” House said. Examples of agricultural commodities include corn, wheat, coffee and soybeans.
Wage growth has slowed, reducing labor costs to transport or prepare food, for example, House said. And grocery stores have offered more price incentives and promotions as consumers become more concerned about their spending, she said.
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VIDEO04:41
Consumer prices rose 0.2% in September, hotter than expected; annual rate increased 2.4%
That said, grocery inflation did see a large jump on a monthly basis from August to September, to 0.4% from 0%.
“I don’t think that will be sustained going forward,” Zandi said.
Individual food items have their own unique supply-and-demand dynamics that can affect pricing.
For example, egg prices rose by more than 8% from August to September, and by 40% since September 2023, largely due to another outbreak of avian flu, a contagious and lethal disease that affects chickens and other birds, said economists.
Housing inflation is declining
Housing accounts for the largest share of CPI — and has been the biggest stumbling block in getting inflation back to its target level, economists said.
“It’s a huge component,” House said. “What happens there can really move the dial when it comes to overall inflation and core inflation.”
CPI shelter inflation — which includes rental prices and an equivalent measure for homeowners — has gradually declined but remained stubbornly high. That has puzzled many economists, since real-estate data shows that growth for average rents of new tenants has been muted for about two years.
In September, shelter inflation throttled back on a monthly basis, to 0.2% from 0.5% in August.
That’s among the most encouraging signals in the latest CPI report, economists said.
“Shelter inflation is now definitively moderating,” Zandi said. “And that’s such a key part of the CPI.”
‘Slower to recede’
Housing falls into the “services” category of the economy.
Inflation for goods has largely throttled back from pandemic-era nosebleed levels as out-of-whack supply-and-demand dynamics unwind, economists said.
But services inflation “has still been pretty slow to recede,” House said.
Largely, that’s been because of shelter. But other categories also remain elevated.
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Many services “rely heavily” on prices in other parts of the economy, House said. For example, insurers are now raising car insurance premiums following an earlier surge in new and used car prices.
Prices for motor vehicle insurance increased 1.2% from August to September and about 16% since September 2023, according to the CPI.
It typically takes a while for such dynamics to filter through, on paper, to the services side, she said.
“Services inflation was slower to peak on the way up and likely to be slower to recede on the way down,” she said. |
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