Qualcomm Eyeing Intel? AI's Power Struggle Starts; Gold Peaks, Correction?
Here is the translation of the provided text into English: ① After the Federal Reserve's interest rate cut in September, the market is divided on future rate cuts.
The Fed's decision is still fresh, and the outlook for the November meeting is uncertain.
Following the Fed's unexpected large interest rate cut, two FOMC members, Christopher Waller and Michelle Bowman, spoke last Friday, hinting that the pace of the Fed's rate cuts might be adjusted.
Waller stated that the Fed's interest rate decisions in the coming months will heavily depend on the performance of economic data.
If the economy develops roughly as expected, there might be a 25 basis point cut at each of the November and December meetings.
However, if job market data deteriorate or inflation slows down more than expected, the Fed might consider another 50 basis point cut.
Conversely, if inflation rebounds, rate cuts might be paused.
He warned that the risk of inflation rising still exists.
Bowman, who was originally against the 50 basis point cut in September, described the current economic situation as "strong".
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However, considering that inflation is still above the 2% target level, a 50 basis point cut might lead the public to believe that the Fed has prematurely declared victory over inflation, so she prefers a 25 basis point cut.
Several Fed officials will also give speeches this week.
Goldman Sachs analysts believe that the current market expectation is a 25 basis point cut in both November and December, but there is still considerable uncertainty about whether a 50 basis point cut will be chosen in November.
Commentator Xu Ge: Last week, the Fed cut interest rates by 50 basis points, and the world entered a frenzy mode.
The US stock market set new highs for two consecutive days, and gold also broke through $2600 per ounce.
Powell stated in his post-meeting declaration that future rate cuts might not be at this speed, and the market is divided on the future pace of rate cuts.
FOMC member Bowman believes that the September rate cut also sent the wrong message that inflation has ended and that there are risks to the economy.
In fact, the US economy is still strong, and inflation will fluctuate, and the Fed is more likely to slow down rate cuts in the future.
European Central Bank President Lagarde recently warned that global trade might face the risk of collapse.
Buffett and some insiders have also been reducing their holdings in US stocks recently, and the global situation might not be as good as it seems on the surface.
Investment advisor Chen Zhaoling: The Fed has started a cycle of rate cuts, and external factors might provide some support for the current A-share market.
However, the market is more focused on the improvement of the molecular end and policy expectations.
In the short term, the continuous expansion of trading volume is still a key signal.
② Qualcomm wants to acquire Intel?
The deal is still far from certain!
Last Friday, during the US stock market trading, there was another leak that Qualcomm had been in talks with Intel about an acquisition.
As a result, Intel's stock rose nearly 9.5% at the end of the day, reaching a high of $23.14 per share, the highest level since August 2nd.
Qualcomm, on the other hand, fell more than 5.5%.
By the close, the rise and fall of both parties were significantly narrowed, with Intel closing up 3.31% and Qualcomm closing down 2.87%.
It is said that the negotiations took place in the last few days, and the deal is still far from certain.
Intel China responded by saying that they would not comment.
Analysis points out that if Qualcomm's acquisition of Intel is successful, it will become one of the largest technology mergers and acquisitions in history.
Its business will span data centers, consumer electronics, automotive electronics, industrial control, the Internet of Things, wired and wireless network fields, and become an all-round giant.
At the same time, both parties will form complementary synergies in many markets, further increasing market share and even forming a monopolistic advantage.
For example, in the PC market, the merger will become the leader in both x86 PC and Arm PC fields.
If Qualcomm develops Arm server chips in the future, it may become the leader in the Arm server CPU market with the help of Intel's current advantageous position in the server CPU market.
In the automotive electronics market, Qualcomm currently has a monopoly in the global high-end smart cockpit market, while Intel's Mobileye has a strong advantage in the ADAS market.
The merger will help to further expand the share in the smart cockpit and autonomous driving fields.
In addition, Qualcomm's technological advantages in communication baseband chips and wireless fields can also bring more empowerment to Intel in more markets.
More importantly, as a global top chip design company, Qualcomm's chips were mainly contracted out to TSMC and Samsung for processing.
If it merges with Intel, it may be possible to completely turn to internal processing within Intel in the future, or form a transcendence of TSMC.
Commentator Xu Ge: The hottest event last week was about a rumor that Qualcomm is going to acquire Intel.
If this rumor comes true, it will be the largest technology stock merger and acquisition case in the world.
Intel's stock price has fallen by 60% since the beginning of the year, and the difficulties in operation can be seen in the recent quarterly report.
Intel lost $1.6 billion last quarter, announced the suspension of dividends, and laid off 15% of its employees, about 150,000 people.
Qualcomm's market value is currently about twice that of Intel, and theoretically there is a possibility of merger and acquisition.
However, there are still significant differences in business, that is, Qualcomm's merger and acquisition may not help Intel solve manufacturing issues, competition with TSMC, and Nvidia's "siege" in chip design.
Coupled with government anti-monopoly approval, the merger and acquisition event is shrouded in heavy uncertainty.
Investment advisor Chen Zhaoling: There are many uncertain factors in Qualcomm's acquisition of Intel.
The A-share semiconductor sector has been hot recently, and attention can be paid to domestic photolithography machines and independent controllable related fields.
③ AI's interest in nuclear energy has surged, and Microsoft will receive nuclear power supply from Constellation Energy, with North American uranium mining stocks and nuclear energy concept stocks soaring!
The largest nuclear reactor operator in the United States, Constellation Energy, has reached an agreement with Microsoft to sell all the electricity generated by its planned restart of the Three Mile Island nuclear power plant to Microsoft, providing energy for its huge artificial intelligence data centers.
Constellation Energy's CFO said that the company plans to invest $1.6 billion to restart the power plant in 2028, and it is expected that the regulatory authorities will complete the restart review by 2027.
The company also plans to apply for an extension of the power plant's operation until at least 2054.
Constellation Energy said that this is the largest power purchase agreement the company has ever signed.
Driven by this good news, Constellation Energy's stock closed up 22.29% last Friday, and the stock price has risen by 119.31% this year.
At the same time, the news has also driven a surge in uranium mining stocks and energy stocks, with Vistra closing up 16.60%; Denison Mining closing up 6.96%; Uranium Energy closing up 4.14%; and Cameco, listed in Canada, closing up 8.13%.
Analysis believes that this decision marks a surge in interest in the nuclear energy industry by the AI industry, as the soaring demand for electricity from AI has led more and more people to pay attention to the potential of nuclear power generation.
Commentator Xu Ge: Constellation Energy has reached a 20-year agreement with Microsoft to provide energy for its huge artificial intelligence data centers.
Affected by this news, Constellation Energy jumped nearly 14% at the opening last Friday, and the stock price hit a historical high.
At the same time, the small nuclear reactor start-up company Oklo Inc rose more than 20%, and Vistra Energy rose more than 8%.
The investment logic chain of artificial intelligence is from data to chips to applications.
After the chain is complete, energy is an important factor to start this complete logic, and electricity is the key.
Therefore, in the future, electricity will be the most important bottleneck after the establishment of artificial intelligence data centers, and it is also the "bridgehead" that all giants must compete for.
Investment advisor Chen Zhaoling: The demand for electricity in the development of the AI industry has been continuously verified.
The power industry may have both dividend attributes and growth potential.
④ Gold breaks through $2600 and sets a new high, with a surge in long positions!
Boosted by the interest rate cut cycle and the heating up of the situation in the Middle East, international gold prices continue to rise!
Last Friday, London spot gold rose by 1.36%, closing at $2621.74 per ounce; COMEX gold futures rose by 1.24%, closing at $2647.1 per ounce, both setting historical highs.
So far this year, the increase in London spot gold has reached 27.12%, surpassing the 25.10% in 2020.
If it continues to the end of the year, it will be the largest annual increase in nearly 14 years.
It is worth noting that last week, the long positions in gold futures surged, and the holdings of the world's largest gold ETF also set a new high since the beginning of the year, showing that the market's bullish sentiment on gold is high.
However, the consumption of physical gold remains weak.
Forex.com analysts said that geopolitical risks will maintain the demand for gold as a safe-haven asset; at the same time, the continuous weakness of the US dollar makes gold cheaper for holders of other currencies, providing additional benefits for gold.
Commerzbank analysts said that although the Fed emphasized that a 50 basis point rate cut is not normal, the market does not seem to be convinced.
As long as the expectation of further rate cuts in the next few months continues to exist, gold prices will continue to rise.
However, TD Securities analyst Daniel Ghali believes that this record-breaking rise may be subject to a correction.
Berenberg Bank analysts said that due to the possibility of gold prices remaining at the current level, the profits of gold miners in 2024 and 2025 may exceed market expectations.
The US stock market's gold sector rose sharply last Friday, with Paramount Gold Nevada rising by more than 16%, Osisko Development rising by nearly 7%, US Gold Corp rising by more than 6%, Harmony Gold rising by more than 4%, Gold Fields rising by more than 3%, and Newmont Mining rising by nearly 1.8%.
Commentator Xu Ge: With the Fed cutting interest rates by 50 basis points, gold prices have also advanced, breaking through $2600 per ounce, with a 27% increase this year.
Looking at the interest rate cut cycle, gold is still in a favorable position, and the tension and possible deterioration of the situation on the periphery will also help gold maintain its strength.
Another factor in the recent surge in gold prices is the strong rise of India's gold purchasing power.
Due to India's reduction of gold import taxes, gold consumption in India has reached a historical high; at the same time, the Indian government has also accelerated gold reserves, which has also added fuel to the fire of gold prices.
Regarding the future trend of gold prices, Goldman Sachs sees a rise to $2700 per ounce; Bank of America sees a rise to $3000 per ounce.
However, due to the recent rapid rise in gold prices, investors need to be alert to the potential risk of correction.Investment Advisor Chen Zhaoling: Gold may still be the most benefited asset from the Fed's interest rate cuts.
The short-term gold prices have fully reflected the market's expectation of a 100 basis point rate cut by the Fed within the year, and the subsequent trend is more volatile.
FedEx's explosive start to the fiscal year puts pressure on the logistics sector.
FedEx, the American logistics company, released its first-quarter report for the new fiscal year last Friday, with adjusted earnings per share at $3.60, significantly lower than analysts' expectations of $4.77 and the $4.37 from the same period last year.
The adjusted operating profit was $1.21 billion, and the adjusted operating margin was 5.6%, both below expectations.
The company lowered its revenue and profit guidance for the current fiscal year, expecting a slowdown in business for the next year, with the full-year adjusted earnings per share forecast being revised down from the original $20-22 to $20-21, which has reignited market concerns about a U.S. economic recession.
In addition, the company expects to add $1.5 billion in stock buybacks for the current fiscal year, bringing the total buyback amount to $2.5 billion.
FedEx's stock closed down 15.23% on Friday, and its weak performance guidance also dragged down trucking and logistics stocks.
Morgan Stanley downgraded FedEx's rating to "Underweight," with analyst Ravi Shanker stating that the company is expected to miss earnings expectations, and the significant gap between its performance and the trajectory required to meet guidance indicates a greater risk for long-term earnings per share.
Wells Fargo also expressed similar skepticism, noting that the company only reduced its earnings per share forecast for the 2025 fiscal year by 50 basis points despite a $1 difference from expectations, mainly revolving around better pricing assumptions and improved industrial production forecasts.
Commentator Xu Ge: FedEx's first-quarter revenue did not increase but decreased, with the EPS drop being more than four times the analysts' expectations; the U.S. delivery giant FedEx, an economic weathervane, started the new fiscal year with a bang, reflecting the low demand in the package delivery industry.
Due to the rise in the price of necessities over the past two years, the demand for express delivery remains weak, and the increase in prices has led to reduced consumption, which is also a significant hidden concern for the U.S. economy.
Investment Advisor Chen Zhaoling: The rapid development of the e-commerce industry and the gradual recovery of the consumer market have driven domestic express delivery demand.
In August, the business volume and revenue of many express delivery companies increased year-on-year.
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