Nvidia says U.S. government allows A.I. chip development in China (3 min read)

Nvidia said on Wednesday that the US government has banned sales of high performing AI chips to China and Russia. However, on Thursday, Nvidia updated that the US government will still allow the development of AI chips in China. The new restriction was imposed because of fear Chinese companies might use it for military purposes. These AI chips are one of the fastest growing parts of Nvidia and an export ban can potentially cost the company $400 million of revenue in the current quarter. Nvidia’s stock dropped 9% on Thursday after the news.

S&P 500 Retains Negative Bias Despite Better-than-Expected ISM Manufacturing Data (2 min read)

Report from the Institute for Supply Management (ISM) shows the August manufacturing PMI is higher than expected and exactly where it was last month at 52.8. Number above 50 means growth and lower means a slowdown. Other results in the report were positive as well with employment standing out, reinforcing that the labor market remains hot. This indicates that the economy is still strong despite the Fed rising rates. If this trend continues, the Fed will have no choice but to continue the hawkish stance. The S&P 500 dropped on consecutive days since the Fed’s speech on Friday and maintained negative even after the better than expected ISM report was released.

Michael 'Big Short' Burry Makes Another Dire Prediction (3 min read)
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Michael Burry said the worst for the economy is yet to come and a market crash is inevitable. He pointed out several potential red flags in the economy now. Net consumer-credit balances are increasing which shows people are rapidly spending instead of cutting back despite inflation at all time high. Consumer borrowing also went up by $40.2 billion in June from the previous month, which is the second highest increase ever. He claims that this speculative bubble has been created since summer last year when investors were heavily piling into MEME stocks and cryptocurrencies. Based on major crashes in history, he predicts S&P 500 could fall to 1,862 points, roughly 52% from where it is on Thursday.

ETF Focused on Korean Entertainment Debuts (1 min read)
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The KPOP and Korean Entertainment ETF (KPOP) was launched Thursday on the NYSE. This ETF tracks an index that targets entertainment companies listed on the Korea stock exchange. Companies included must be at a minimum size and involve full aspect in South Korea's entertainment and interactive media industry. Holdings are market-cap weighted with a cap for individual companies at no more than 9.85%. Entertainment industry is targeted to be 70%-80% of the index while interactive media to be 20%-30%. The management fee is 0.75%.

Fixed Income ETFs Take Center Stage After Jackson Hole (2 min read)
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Investors are shying away from equity products and more towards fixed income as they prepare for rate hikes to continue. US Fixed income ETFs had an inflow of $2.4 billion last week while US equity ETFs only had $981.2 million, which is a major drop from $12 billion it had the week prior. Most of the fixed income inflows are in short duration or floating rate. This type of asset class is less sensitive to rate movement and more closely tied to what the Fed does. ETFs with the most inflows last week were Vanguard Short-Term Bond ETF (BSV), SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) and Vanguard Short-Term Treasury Index ETF (VGSH).

4 Things to Know Before You Take Financial Advice From TikTok (4 min read)

Before taking financial advice from anyone on TikTok, there are a few things to keep in mind. First, creators are not vetted on TikTok so literally anyone can call themselves a financial expert. It’s best to do some research on the creator beforehand. Second, watch out for wild claims. They might be doing it to attract more views or a “pump and dump” scheme if promoting an investment. Third, some creators might be giving advice out of good intention but have little knowledge on the subject and viewers do not realize it. And lastly, the advice might not even fit your circumstances as there is no one size fits all. TikTok is fun but it is important to distinguish what is entertainment and what is real.

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Thanks,
Thomas

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