Dan Ives launches merchant bank
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What is the main topic discussed in this episode?
Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Our top story so far.
What is Yorkville Ives and why is Dan Ives launching a merchant bank focused on AI?
Tech analyst Dan Ives, known for his bullish calls on Apple and AI stocks, announced he has teamed up with Yorkville Securities to launch a new kind of merchant bank. Yorkville Ives, which sounds like the name of a Trading Places character, will combine Yorkville Securities' dealmaking and buy-side expertise with Ives' technology research. The fourth industrial revolution is here, and it needs a new kind of bank, a modern merchant bank, Ives said.
How will Yorkville Ives combine research, banking, trading and capital to back AI transformations?
Research, banking, trading, and capital, all under one hood, all pointed at the biggest transformation the markets have ever seen. The firms that will define the next decade won't simply advise clients, they'll invest alongside them, Yorkville Ives CEO Roger Briggs added. Companies need a strategic partner that can help shape opportunities, structure transactions, provide capital, and stay engaged long after the deal closes.
Which stocks reacted to AI demand and earnings news (ASML, J&J, BlackRock)?
Among active stocks, ASML rose after the chip equipment maker raised its full-year sales forecast for the second time this year and said it plans to expand capacity after strong AI demand helped second-quarter results beat expectations. Johnson & Johnson got a good but not good enough reaction after beating Q2 earnings estimates and raising its EPS and revenue guidance. Seeking Alpha analyst Edmund Ingham said that the year-over-year decline in EPS appears to have displeased Wall Street, though he noted performance in the company's innovative medicine business was especially strong.
What does the latest PPI report say about wholesale inflation and Fed rate odds?
And BlackRock gained after the asset manager beat Q2 earnings expectations. The company attracted $868 billion in net inflows over the past 12 months, reflecting 10% organic base fee growth. Looking to the economy, more encouraging inflation data arrived, this time on the wholesale side. The producer price index fell 0.3% month over month versus expectations for a 0.1% decline.
Why is CoreWeave considering derivatives to hedge memory-chip price risk and what does that mean for the chip trade?
The prior month's increase was revised to 0.6% from 1.1%. That brought the annual rate down to 5.5%, well below the 6.2% consensus. Core PPI, which excludes food and energy, rose 0.2% for the month, below expectations for a 0.4% increase. The annual core rate slowed to 4.7%, compared with expectations for 5.2%. The odds of a Fed rate hike this year have fallen to 75% from 85% a week ago, with both PPI and CPI pointing to easing price pressures. But Schwab strategist Kevin Gordon said the PPI components that feed into the Fed's preferred PCE inflation measure suggests a firmer print for June than we got with CPI yesterday. Only hospital outpatient care declined month over month. In other news of note, memory swaps anyone?
CoreWeave is reportedly exploring the use of financial derivatives to hedge against a future decline in memory and storage chip prices. The unusual move underscores how deeply the AI boom has tied cloud providers to the volatile chip market. To lock in supply amid soaring demand, cloud operators have signed long-term agreements with memory and storage suppliers such as Micron and SanDisk, according to Reuters. Many of those agreements guarantee suppliers a minimum price for DRAM and storage chips. That protects chip makers from a downturn, but leaves cloud companies exposed if prices fall. As a result, CoreWeave executives have discussed ways to hedge that risk, including using put options. And in the Wall Street research corner, long global semiconductors is now the most crowded trade, according to Bank of America's latest Global Fund Manager survey.
Some 82% of July respondents said long chip positions are now overcrowded, up from 80% in June and 73% in May. The long Magnificent Seven trade has slipped to a distant second at just 7%. Other positions barely registered, long U.S. dollar ranked third at 4%, followed by short European equities and long oil. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at SeekingAlpha.com.
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Chapters
6 chapters
1
What is the main topic discussed in this episode?
0:02–0:13
2
What is Yorkville Ives and why is Dan Ives launching a merchant bank focused on AI?
0:13–0:36
3
How will Yorkville Ives combine research, banking, trading and capital to back AI transformations?
0:36–0:59
4
Which stocks reacted to AI demand and earnings news (ASML, J&J, BlackRock)?
0:59–1:30
5
What does the latest PPI report say about wholesale inflation and Fed rate odds?
1:30–1:53
6
Why is CoreWeave considering derivatives to hedge memory-chip price risk and what does that mean for the chip trade?
1:53–4:03