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AI race in full swing as Google (GOOG) (GOOGL) goes into overdrive to power Gemini. (00:31) Trump SPAC Digital World (DWAC) jumps amid settlement with SEC. (01:57) Biden said to form team to avert future debt-limit standoffs. (03:02)
This is an abridged transcript of the podcast.
Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is reportedly rounding up the old guard as it looks to respond to recent developments that could threaten its market dominance and $150B per year Search business.
The pressure centers around artificial intelligence and the need to put the technology at the center of its product strategy.
Last November proved to be a big wake-up call with the release of ChatGPT by the Microsoft-backed (NASDAQ:MSFT) research company OpenAI.
However, since then there have been many other offerings, not to mention the disruptive force that has even seen Meta Platforms (NASDAQ:META) pivot away from the metaverse.
The Gemini Project:
Google’s co-founders Larry Page and Sergey Brin have reportedly upped their visits to the company’s headquarters to ensure that AI is front and center in its plans. Reports suggest that Brin has even taken it upon himself to hire the most sought-after researchers in the field, building his own pool of intelligence as the competition intensifies.
We know that Google (GOOG) (GOOGL) has released its own chatbot called Bard that’s powered by LaMDA (Language Model for Dialogue Applications), put AI reinvention at the center of its I/O developer conference in May, and is even said to be testing an AI tool to write news stories and assist journalists.
If you’d like a deep dive into this topic check out the Wall Street Breakfast newsletter. I’ll leave a link to where you can find it in show notes.
Digital World Acquisition (NASDAQ:DWAC) is up 22% premarket after a settlement with the Securities and Exchange Commission’s Enforcement Division in connection with its probe into the SPAC’s deal to take Donald Trump’s social media company public.
Digital World (DWAC) will have to pay an $18 million fine if it completes its merger transaction.
The SEC concluded that DWAC misled investors and the SEC by failing to disclose that it had formulated a plan to acquire and was pursuing the acquisition of Trump Media & Technology Group prior to DWAC’s IPO.
Three investors were arrested last month for alleged insider trading, as they earned over $22M in illegal profits after buying Digital World Acquisition (DWAC) shares when they secretly learned about the SPAC’s plan to buy Trump’s media firm.
The Trump SPAC now has until Sept. 8 to complete its deal with Trump Media. If the deal isn’t completed by the deadline, the SPAC will have to return the money it raised to investors.
According to the SEC settlement order, if DWAC dissolves the SPAC and returns the money in trust to the shareholders before January 2025, the SEC will forgo the $18 million penalty.
Two months after the U.S. neared its first-ever debt default, President Joe Biden has created a team to assess ways to avert future standoffs over the country’s debt ceiling.
Bloomberg reported that the working group, consisting of administration officials and without any Republican members, will be led by White House Counsel Stuart Delery and National Economic Council Director Lael Brainard.
The nation was taken to the edge two months ago, when Biden and House Speaker Kevin McCarthy struck a last-minute deal to avoid a debt default.
Of course this would’ve been a major blow to the economy as Treasury Secretary Janet Yellen (also a member of the president’s new group) warned earlier this year.
The White House statement cited in the report said, “Now that the latest debt ceiling crisis is behind us, it is necessary to explore all legal and policy options to prevent Congress from ever again holding hostage the full faith and credit of the United States.”
There’s yet to be a deadline for the group to finish its work and there’s no date for its first gathering.
Other headlines to look out for on Seeking Alpha:
Codexis streamlining operations, reducing headcount
SAP slumps after unveiling Q2 results, tweaking 2023 outlook
Tesla skids 10% after earnings disappoint; other EV stocks go in reverse
Sirius XM, heavily shorted, jumps 27% and triggers halts (updated)
On our catalyst watch for the day, It is the last trading day before the special rebalance of the Nasdaq 100 index takes effect. The rebalancing is expected to lower the degree to which the Nasdaq 100’s performance is determined by tech giants Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Tesla (TSLA), and Meta Platforms (META).
U.S. stocks ended mixed on Thursday.
The Nasdaq (COMP.IND) closed 2.05% lower. The S&P 500 (SP500) lost ground by 0.68%. The Dow (DJI), on the other hand, added 0.47%.
Of the 11 S&P sectors, seven ended trading in the green, led by Utilities and Health Care. Consumer Discretionary and Communication Services topped the losers.
The 10-year yield (US10Y) was up 11 basis points to 3.85%, while the 2-year yield (US2Y) was up 7 basis points to 4.83%.
Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are in the green. The Dow is up 0.2%, the S&P 500 is up 0.3% and the Nasdaq is up 0.5%. Crude oil is up 1.3% at more than $76 a barrel. Bitcoin is down 1.7% at less than 30,000.
In the world markets, the FTSE 100 is up 0.02% and the DAX is down 0.4%.
On today’s economic calendar, at 1pm the Baker Hughes rig count.
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