Weak Share Buybacks and Pension Funds' Rebalancing Could Upset the Market!! The market faced short-term pressure this week as some cautious investors are becoming concerned about potential large-scale stock sell-offs by pension funds due to quarterly rebalancing, coupled with the weakening purchasing power of corporate buybacks, a key force in the market. Hence, we need to understand why are pension funds selling now and what are the potential implications? Pension funds and other institutional investors conduct quarterly and monthly checks on their market risk exposure to ensure that their asset allocation aligns with established targets while controlling portfolio risk. This typically involves reallocation between stocks and bonds. In general, if the stock market performs well, the propo
$Blackstone Group LP(BX)$ Largest alternative asset management with more than 1 trillion AUM! I love businesses that can generate increasing revenues!! It focuses on alternative investment and currently had US$1.04 trillion AUM. Based on their last earning report, they have 4 core pillars; real estate (US$336.9 billion, up 3.3% yoy), private equity (US$304 billion, up 5.2% yoy), credit and insurance (US$318.9 billion, up 13.9% yoy), hedge fund solutions (US$80.3 billion, up 0.75% yoy). ▪Total AUM increased to $1,040 billion, up 7% year-over-year, with $52.7 billion of inflows in the quarter and $148.5 billion for the year ▪Fee-Earning AUM of $762.6 billion was up 6% year-over-year, with $44.6 billion of inflows in the quarter and $119.4 billi
Impending short squeeze?! First of all, what is a short squeeze?? It is a situation in which the price of a stock rises to such an extent that investors who have sold short purchase the stock in order to limit their losses, causing the price to rise further. The share price of $Faraday Future Intelligent Electric Inc.(FFIE)$ has dropped around 90+% YTD since the beginning of year 2024. Its market cap is currently at ~$4million and has a high short interest of ~86% (36.3 mil out of 42 mil shares,were shorted as of 15 Feb 2024). https://www.nasdaq.com/market-activity/stocks/ffie/short-interest Although it only sold 10 cars to date, the company is selling highly niche ultra-luxury cars. One FF 91 2.0 Futuris
Impending short squeeze?! First of all, what is a short squeeze?? It is a situation in which the price of a stock rises to such an extent that investors who have sold short purchase the stock in order to limit their losses, causing the price to rise further. The share price of $Faraday Future Intelligent Electric Inc.(FFIE)$ has dropped around 90+% YTD since the beginning of year 2024. Its market cap is currently at ~$4million and has a high short interest of ~86% (36.3 mil out of 42 mil shares,were shorted as of 15 Feb 2024). https://www.nasdaq.com/market-activity/stocks/ffie/short-interest Although it only sold 10 cars to date, the company is selling highly niche ultra-luxury cars. One FF 91 2.0 Futurist Alli
Semiconductor stocks benefitting from CHIPS ACT Funding? Recently, there's several news of semiconductor companies being awarded grants amounting to billions of US dollars to set up manufacturing plants in US. The key motivation behind the huge generosity from the US government is due to the severe semiconductor supply chain disruption and culmination of years of political wranglin to bolster US competitiveness in the semiconductor industry, which is viewed as essential to national and economic security. Particularly, US semiconductor manufacturing capacity has dropped from nearly 40% of global supply in 1990 to 12% today. This act is basically to limit China's rise in power; the funding recipients are prohibited from expanding semiconductor manufacturing in China or any countries t
Bitcoin to the moon!! Bitcoin has achieved a new all-time high and has been hovering around US$70,000 mark. So is it time to take profit $Coinbase Global, Inc.(COIN)$ ?? The advent of Bitcoin ETFs has resulted in huge inflows into Bitcoin, driving the price up. Furthermore, another pivotal event on Bitcoin's blockchain is the halving, when the reward for mining is cut in half. After the network mines 210,000 blocks—roughly every four years—the block reward given to Bitcoin miners for processing transactions is cut in half. This event is called halving because it cuts the rate at which new bitcoins are released into circulation in half. The next halving is expected to occur in early-to-mid 2024, when
What is the influence of CHIPS ACT Funding? Recently, there's several news of semiconductor companies being awarded grants amounting to billions of US dollars to set up manufacturing plants in US. The key motivation behind the huge generosity from the US government is due to the severe semiconductor supply chain disruption and culmination of years of political wranglin to bolster US competitiveness in the semiconductor industry, which is viewed as essential to national and economic security. Particularly, US semiconductor manufacturing capacity has dropped from nearly 40% of global supply in 1990 to 12% today. This act is basically to limit China's rise in power; the funding recipients are prohibited from expanding semiconductor manufacturing in China or any countries that
Impending short squeeze?! First of all, what is a short squeeze?? It is a situation in which the price of a stock rises to such an extent that investors who have sold short purchase the stock in order to limit their losses, causing the price to rise further. The share price of $Faraday Future Intelligent Electric Inc.(FFIE)$ has dropped around 90+% YTD since the beginning of year 2024. Its market cap is currently at ~$4million and has a high short interest of ~86% (36.3 mil out of 42 mil shares,were shorted as of 15 Feb 2024). https://www.nasdaq.com/market-activity/stocks/ffie/short-interest Although it only sold 10 cars to date, the company is selling highly niche ultra-luxury cars. One FF 91 2.0 Futurist Alli
HODL or take profit?? The introduction of AI has resulted in huge rally in most semiconductor-related stocks. Notably, $NVIDIA Corp(NVDA)$ was one of the biggest winners gaining ~230+% in a year due to the significant improvement in its quarterly revenue. However, the AI competition is getting more intense and do they still deserve a premium to their current valuation?? For instance, OpenAI is exploring making its own AI chips and also considering options to diversify its suppliers beyond Nvidia. Furthermore, their close competitors such as $Advanced Micro Devices(AMD)$ and Intel are developing their own AI chips (M
Is EV still a growing industry?? Let's have a quick overview of its annual deliveries. BYD: 3,024,417 vehicles (up 61.9% yoy) Tesla: 1,810,000 vehicles (up 38% yoy) Li auto: 376,030 vehicles (up 182.2% yoy) Nio: 160,038 vehicles (up 30.7% yoy) Xpev: 141,601 vehicles (up 17% yoy) Rivian: 50,122 vehicles (up 146.5% yoy) Growth in the global EV market is set to slow to 27.1% in year 2024 as a reduction in state subsidies makes the cars less appealing to buyers. Furthermore, limited product choices and inconvenient charging experience have hampered demand, impacting the market growth of EVs. This is clearly evident as the overall slowdown in the EV transition has prompted several legacy automakers, such as Ford, to scale back their EV production expansion plans. Using Xpeng as an example, 2024