Breakfast FM Radio: December 27, 2024

In the wake of the Christmas holiday season, market conditions have shown signs of subdued trading activity, reflecting a mix of optimism and caution among investorsThe S&P 500 and Nasdaq experienced moments of upward movement during the day but ultimately ended in the red, while the Dow Jones Industrial Average managed to secure its fifth consecutive day of gainsSmall-cap stocks demonstrated particularly robust performance, rising nearly 1%. Apple saw its stock price soar to a new high, edging its market capitalization closer to the staggering $4 trillion mark, whereas Tesla saw a decline of 1.8%. Nvidia's losses moderated, and Broadcom enjoyed significant gains, exceeding 2%. Notably, companies within the drone sector witnessed a remarkable surge.

Interestingly, the China concept index rose by 0.9% at one point, with Li Auto climbing over 9% and Kingsoft Cloud experiencing a meteoric rise of more than 14%. However, the offshore yuan fell below 7.31 against the dollar, indicating ongoing pressures on the currency.

In the United States, bond yields reached an eight-month high before reversing course and declining

The dollar continues to hover near two-year peaks, while the Indian rupee recorded lows not seen before, and the Japanese yen dipped below 158, marking a five-month lowBitcoin faced a sharp downturn, coming close to the $95,000 threshold.

As oil prices rose nearly 1% earlier in the day, they subsequently fell, pushing West Texas Intermediate (WTI) crude below $70 per barrelMeanwhile, spot gold edged closer to $2,640 per ounce, reflecting ongoing investor interest.

In the Asian market, trading on Chinese equities showed a slight uptick with diminished volumeThe Wande Micro Index climbed by 1.57%, indicating a significant breakout in AI hardwareHowever, bond futures experienced a widening decline.

In notable tech developments, Nvidia has launched its GB200 NLV4 and is expected to introduce the GB300 version by March next yearThis new chip appeals to medium-sized organizations or those prioritizing energy efficiency, providing a compact alternative to the larger and more energy-intensive NVL72, which is designed for extensive deployment and supports spine connectors.

As the demand for data center chips slows down, Nvidia's suppliers are optimistic that the rise of AI smartphones may provide a new avenue for growth

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The chief executive of Advantest, a leading chip testing equipment manufacturer, mentioned that AI smartphones are viewed as a promising growth area, which could help the semiconductor industry avoid entering a recessionDespite current low levels of demand for AI smartphones, some analysts anticipate that upgrading functionality alone may not be enough to spur mass consumer adoption.

The formidable challenge of achieving artificial general intelligence (AGI) at OpenAI is underscored by a profit target of $100 billionTransitioning into profitability is expected to encounter substantial challenges, particularly in collaboration with Microsoft, concerning four major issuesAs per existing agreements, OpenAI is unlikely to realize AGI anytime soon, with projected losses for this year estimated at a staggering $14 billionThe anticipated timeframe for achieving a first annual profit is not projected until 2029, leaving much ambiguity around how these transitions may influence AGI's profit targets.

A recent leak regarding Deepseek's new model has created waves within the programming community, as it surpassed Claude 3.5 Sonnet's performance in programming benchmarks

This accomplishment places Deepseek-v3 at the forefront of the Aider multilingual programming test leaderboard, right behind o1.

Oracle has celebrated an impressive increase of over 60% this year, marking the best outcome since the dot-com bubble, with founder Larry Ellison's wealth skyrocketing by $75 billionThe company's cloud infrastructure has become crucial for training some of the world’s leading AI models, and higher-ups project a potential doubling of revenue within five years, hitting the $100 billion milestoneHowever, some analysts remain skeptical about the sustainability of this trajectory, particularly when contemplating the anticipated doubling of capital expenditures by FY2025.

In the cryptocurrency realm, Bitcoin's ambitions of being "Made in America" seem increasingly unrealisticThe notion of ensuring that all remaining Bitcoin will be 'American-made' appears almost unattainable, given blockchain's decentralized nature

This reality is compounded by the current global mining market's fragmented and competitive landscape, where U.S.-based miners hold less than half of the total computational power worldwide.

MicroStrategy (MSTR) is seeking shareholder approval to increase its authorized share count from 330 million to 10.33 billion shares, reflecting its rapid Bitcoin acquisition pace that has far exceeded initial expectations.

Concerning macroeconomic indicators, the U.Sreported lower than expected initial jobless claims last week, while continuing claims surged to a three-year high, suggesting increasing vulnerabilities in the labor marketFor the week ending December 14, continuing unemployment claims rose by 46,000, reaching 1.91 million, exceeding the anticipated figure of 1.88 million.

There remains a divergence in consensus and expectations regarding U.STreasury yieldsHuatai Securities noted that U.S

economic momentum has cooled since mid-November and anticipates that continued softening in the labor market will likely contribute to slower wage growthThe constraints posed by the debt ceiling could limit supply, potentially creating an environment for temporary declines in Treasury yields in the first quarter of next year.

Historically, the end of interest rate cuts during economic soft landings often occurs graduallyGoldman Sachs found that G10 central banks tend to conclude easing cycles by pausing rate cuts cautiously, noting that nearly half of the ‘soft landing’ rate-cutting cycles have lasted over a yearTheir analysis suggests that the Federal Reserve’s statements in December align with historical patterns of deceleration in the later stages of easing cycles.

Looking forward, Japan's budget for 2025 is set to reach a record-high of 115 trillion yen, featuring substantial increases in defense spending

Major allocations include a more than 10% hike in defense spending, bringing it to 8.5 trillion yen, alongside nearly 7% increases in funding for local governmentsWith tax revenue hitting an all-time high, the scale of new government bonds issued will decline by nearly one-fifth, to 28.6 trillion yen.

Turkey marked its first interest rate cut of the year, lowering rates to 47.5%. The central bank unexpectedly slashed rates by 250 basis points, declaring that future rate cuts would hinge on forthcoming price data, while also highlighting that this decision does not necessarily imply further reductions in upcoming meetings.

In the realm of overseas companies, Sam Altman has shared a futuristic vision for technology in 2025. On social media, he solicited opinions on what technological advancements OpenAI should prioritize for optimizationUsers showed keen interest, proposing suggestions such as a stronger GPT-4 replacement and seamless integrations of the GPT/o series and generative image models into ChatGPT.

Elon Musk has ignited a manufacturing revolution, though it has received limited attention

The CEO of Launch I/O highlighted that Tesla applies the same rigorous design, testing, and refinement protocols to its factories as it does to its vehiclesThis focus on manufacturing efficiency is expected to drastically reduce production costs, potentially approaching zero—a factor that many are unaware ofThis methodology is anticipated to be instrumental in the production of future products, including cyber trucks and Optimus robots.

Top venture capitalists project transformative developments in the AI field by 2025, predicting a shift from generalized large models to smaller, specialized, and practical small language modelsThey foresee that simple GPT wrappers and chatbots will give way to more complex AI agents capable of handling sophisticated business workflows, marking a pivotal year for artificial intelligence in transitioning from concept validation to actual commercial viability.

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