NVIDIA's meteoric stock rise to a trillion-dollar company this year has sparked rumours and scepticism about the authenticity of surging AI chip demand. Detailed analysis by independent analysts reveals questionable financial engineering between NVIDIA, AI startup CoreWeave, and Wall Street firms to inflate GPU sales. However, CoreWeave's operations and clients do not seem to justify its soaring valuation or need for massive computing power. The questionable financial arrangements and weak fundamentals raise concerns about NVIDIA's stock being overvalued and having an inflated impact on the tech sector. If even a fraction of the rumoured financial engineering is true, NVIDIA could collapse and drag down the whole tech sector.
EQUITY
Stocks fell moderately Wednesday, with major indexes posting 1-week lows, as stronger-than-expected economic data reinforced expectations for more Fed interest rate hikes. Apple led Dow declines, falling over 3% on restrictions for China's officials, while glucose monitor system Dexcom surged 6%, although concern over obesity drugs may affect sales.
GOLD
Gold prices have lingered near a one-week low this week as the US dollar strengthened on the back of upbeat economic data that suggests the Fed may continue raising rates. Subdued demand from China amid an economic slowdown has also pressured prices, though investment demand via ETFs has provided some support.
OIL
Oil prices are trending higher, although limited at around $91 as tightening continues and demand typically declines seasonally after the summer. However, producers have promised flexibility to review output monthly, which could increase supplies if any shocks emerge. At the same time, declining US crude stockpiles point to tightening near-term supplies.
CURRENCY
The greenback hit highs against the yen and euro as upbeat US services data indicated stubborn inflation and rates could persist at higher levels, though dovish rhetoric from the ECB and BoE contrasted with the hawkish Fed. Gloomy trade numbers out of China kept the yuan under pressure as the economy lost steam, while the Canadian dollar held steady, although the BoC paused rate hikes.
