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Public.com presents the rundown, your daily market update in under 10 minutes. My name is Zaidad Mani and Today is Wednesday, December 10th. In today's episode, we'll tell you what the markets are expecting from the Fed meeting. We'll also tell you about the wild story of Deep Seek smuggling in Nvidia chips into China. Then stick around to the end of the show to learn about a wild stat about retail investors. We got a great show for you today. Let's go.
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Yesterday was another slow and low volume day on Wall Street. The S&P 500 barely budged, dropping just 0.1%. While the NASDAQ did squeeze out a 0.1% gain, small caps continue to outperform the markets. The Russell 2000 was up 0.2% yesterday and close to record highs. You know, the markets have been relatively quiet for the past week or so, but that might change today because it's Finally Fed Day. 2pm Eastern. Today the Fed will announce their interest rate decision followed by a Jerome Powell press conference at 2:30. Now, markets are overwhelmingly expecting a 25 basis point cut, which would make this the third straight rate cut for the Fed. But at this point, investors are trying to get a signal for what the Fed might do in 2026. Obviously, Jerome Powell's comments will play some role in that. But remember, Jerome Powell's term as Fed Chair is ending in May and Jerome Powell's likely successor, Kevin, has it said yesterday that he sees plenty of room for rates to move lower beyond just today's expected rate cut. So it'll be interesting to see what Jerome Powell says in the press conference. You know, we only have like four of these meetings left with Jerome Powell as Fed chair, including this one. So we got to cherish these moments. Now I'm actually going to be watching this press conference on my way to the airport because I'm flying to New York City today to hang out with Mike and Connor this week. So follow us on Instagram because you might see me do an instant reaction to the Fed meeting as I'm going through the TSA line. Now, beyond the Fed meeting, we're also getting earnings from Oracle today after the closing bell. You know, a lot of investors are going to be paying close attention to what Oracle reports because Oracle has been taking on a ton of debt to build out all their AI infrastructure and data centers and the level of debt is making the markets nervous. In fact, Oracle stock is down 30 from its peak back in September. So their earnings are going to be critical and it'll be interesting to see what their management has to say. If they end up missing on earnings, it could result in a sector wide sell off of AI stocks. So despite a slow start to the week, things are starting to pick up. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines, starting with Deep Seek. The Chinese AI startup deepseek has apparently been training their next AI model on Nvidia's Blackwell chips that were smuggled into China. This is according to reporting from the Information. Remember, the US Government has banned the export of Nvidia's most powerful chips, which includes the Blackwell chips, from being exported to China. But Deep Seek found an elaborate workaround that sounds like the plotline to the next Ocean's Eleven movie. The way this works is that Nvidia's chips get ordered by companies in countries where the chips aren't banned by like Singapore. The chips get installed in data centers in that country and it gets inspected by Nvidia and their partners. So everything looks legit on paper. But after the inspectors leave, the servers get dismantled and the chips are boxed up and smuggled into China piece by piece. Then the chips are reassembled in a data center by China and used by Deep Seek in this case to train their AI model. That is a wild story, but it's a perfect example of why it's so hard to enforce export restrictions for on things like AI chips. They're small enough and portable enough to where they can get moved around. Now what's wild here is that the Chinese government has also banned Nvidia's chips from being sold in China to prop up their domestic Chinese chip makers like Huawei. So Deep Seek is taking a pretty big risk here by breaking Chinese law as well. I guess they don't think that the Huawei chips are good enough to get the job done when it comes to training their next model. Now if you guys remember, Deep Seek became a household name earlier this year after their open source AI model was comparable to OpenAI's model for but cost much less to train. And when the Deep Seek model came out, it caused Nvidia stock to drop like 15% in a single day. So Deep Seek is now working on their next model. They're hoping to release it by early next year. And I guess they needed the latest Blackwell chips to train their model. So yeah, pretty interesting development here. And it comes at a time where the US just approved the sale of Nvidia's H200 chips to China this week. We actually covered that on yesterday's episode, so go check that out if you missed it. Now, the H200 chips are still one generation below Blackwell, but now that those are allowed to be sold to China, that could reduce the amount of Blackwell chips that are smuggled. Now, the Chinese government still has to approve the sale of the H200 chips, which hasn't happened yet. So, yeah, I can't say that I'm super surprised that this is happening, but I do wonder what the response from the Chinese government will be. Are they going to really clamp down on their tech companies from using Nvidia chips so they can prop up their domestic chip makers, or are they going to be okay with it because they don't want their AI models to fall behind? Let's stick with the AI theme and talk about OpenAI, because they just announced a partnership with Adobe to bring Photoshop and other creative software directly into Chat GPT. With this new integration, you'll be able to edit photos and tweak PDFs all within a chat GPT chat. Now, OpenAI has been making deals all year with various companies to integrate their services inside ChatGPT. I think OpenAI wants to turn ChatGPT almost into an operating system. You know, with all these integrations now within ChatGPT, you can shop and create and edit images and book travel, even look for homes with the Zillow integration. And I'm sure more integrations are going to be coming soon. You know, ChatGPT has over 850 million weekly active users, so for companies like Adobe and others, it's a great way for them to get their product in front of a massive audience. And OpenAI is hoping that these integrations will lead to revenues down the line. Now, Speaking of revenue, OpenAI also just announced that they hired Denise Dresser, the former CEO of Slack, to be their new Chief Revenue officer. And her job is mainly going to be expanding the adoption of Chat GPT into the enterprise and everyday workplace tools. I mean, let's be honest, all of us are using Chad GPD for work anyways right now, and OpenAI is trying to monetize that somehow. But, you know, OpenAI has definitely lost a lot of hype and this Adobe partnership is a great example of that because Adobe stock is actually down following this announcement. You go back like three months ago, if Open AI showed a logo of your company on their slide deck, your stock was going up 5 to 10%. But that doesn't seem to be the case anymore. Let's talk about some stocks making moves today. The first one isn't a stock, but a metal. The price of silver is hitting record highs, crossing over $60 an ounce for the first time ever. I know that gold has gotten a lot of attention this year, but silver has actually outperformed it with a price rising 90% this year. And a big reason for price increase has been the global supply squeeze. See, the demand for silver has been booming, especially for industrial use like electronics and solar panels. Meanwhile, miners can't keep up because silver is mostly produced as a byproduct of other metals. So unlike gold, you just can't decide to mine more silver. Also adding the fact that the US Government recently added silver to its critical minerals list this year, basically upgrading it from a precious metal to a national necessity. So all those factors are pushing silver prices to record highs. Now, on the flip side, gamestop stock is falling this morning after the company reported another quarterly sales decline. Revenues last quarter dropped 4 1/2% to $821 million. That's a big reverse from the 22% increase in revenue they saw in Q2. Now, the increase in Q2 was because of hardware sales like the Switch 2 that didn't carry over to Q3. It also doesn't help that gamestop bought bitcoin as well. With bitcoin down more than 20% from its peak, it's another negative factor weighing down gamestop this morning with the stock down 4% at the time of this recording. Let's wrap the show with a fun fact. Retail investors now make up more than 20% of all U. S stock trading volume. And that percentage is even higher for stocks under $5. And what's crazy is the share of retail investing has more than doubled since 2010. You know, some people thought that the rise of retail traders was just a Covid thing or a gamestop phenomenon, but no, the interest from retail investors is legit and it's growing thanks to the rise of zero commission trading apps like Public.com and all the content on social media. So with retail investors being a permanent fixture of the markets, I wonder what that's going to mean for market dynamics. It probably means we're going to see more random meme stocks pop up every few months. But I also wonder, with this buy the dip culture that we have, are we ever going to see a major market crash anymore? Because every time the market has a dip, it seems to get bought up. Now let's just hope that and jinx that. Ultimately, I'm just glad to see this trend. Yes, it's better for content, but I'm just happy that more and more people are investing. Just, you know, maybe stay away from the triple levered ETFs and zero day options. Well all right guys, that's the rundown for today. Hope you guys enjoyed today's episode. If you did and you have like five extra seconds, consider giving us a five star rating on Apple, Spotify, YouTube, wherever you listen to your podcast. If you are listening on Spotify, don't forget to vote in today's Spotify poll. Leave us a comment on Spotify. All that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening, watching and commenting. Shout out to Mike and Connor for all the work behind the scenes and we'll see you guys back here tomorrow.
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