In this issue of the peel:

• 💻 Nvidia dragged the market down on reports that the chipmaker is being investigated for violating anti-monopoly laws.

• 📉 China’s export growth slows, and imports continue to shrink ahead of Trump’s tariffs.

• 🇦🇺 Australia is the latest country to take a dovish monetary policy stance at the final RBA meeting of the year.

Market Snapshot

Banana Bits

• Alleged United Healthcare CEO shooter is arrested in Pennsylvania and charged with murder.

• Trump lays out his 100-day agenda in the first post-election interview.

• Chinese stocks got a boost from loosening monetary policy, the first such move in over a decade.

• The family of Rupert Murdoch is having their own “succession” like debacle that is playing out in public.

• The Oakland Raiders are turning to Tom Brady for answers. Could this be a foreshadowing of Brady becoming the next owner?

This smart home company grew 200% month-over-month…

No, it’s not Ring or Nest—it’s RYSE, a leader in smart shade automation, and you can invest for just $1.75 per share.

RYSE’s innovative SmartShades have already transformed how people control their window coverings, bringing automation to homes without the need for expensive replacements. With 10 fully granted patents and a game-changing Amazon court judgment protecting their tech, RYSE is building a moat in a market projected to grow 23% annually.

This year alone, RYSE has seen revenue grow by 200% month-over-month and expanded into 127 Best Buy locations, with international markets on the horizon. Plus, with partnerships with major retailers like Home Depot and Lowe’s already in the works, they’re just getting started.

Now is your chance to invest in the company disrupting home automation—before they hit their next phase of explosive growth. But don’t wait; this opportunity won’t last long.

Invest today before their share price changes next week.

Macro Monkey Says

CPI: The Final Boss

The Consumer Price Index (CPI) report is dropping this Wednesday, December 11th, and it reminds me of the final boss in your typical first-person story mode game. 

It’s the only thing standing in between us and our sweet Jerome Powell, along with his precious money printer. Why? Because it’s basically the Fed’s gossip column for inflation trends. The numbers will determine whether the Federal Reserve slides into a chill mode or keeps its foot on the economic brakes.

This isn’t just for economists in suits. If the numbers look tame, markets might bet on a rate cut by March—yes, lower interest rates mean your loans don’t suck as much. 

But if inflation stays sticky, brace yourself for higher costs, whether it’s tuition or Taco Bell runs. The Fed isn’t just crunching numbers for fun. 

Too-high inflation? Consumers cut back, and businesses freak out. Too-low inflation? Stalling economy. It’s a balancing act, and everyone’s watching.

The Numbers

Headline CPI: This covers a larger basket of products and goods and is seen as the more raw number. It is expected to rise by 3.2% year-over-year, slightly up from 3.1% last month. Monthly growth? A mild 0.2%.

Core CPI: This measurement excludes food and energy prices, which never made sense to me because aren’t those two things the biggest expense items for the average person? 

Yes, but according to the Fed, they are also the most volatile components, and therefore, excluding them provides a better indicator of long-term inflationary trends. 

The forecasts call for a 3.8% annual increase, which would be the lowest since 2021. Monthly? A steady 0.3%. Core CPI is like the GPA of inflation—it’s what really matters.

How is this number calculated in practice? Thanks, I thought you’d never ask! There are a few steps involved:

• Basket Composition: Items are grouped into categories like housing, food, and transportation based on their importance in consumer spending.

• Price Collection: Prices for these items are gathered monthly from urban areas.

• Weighting: Each category is weighted to reflect its share of the average household budget.

• Calculation: Changes in price levels are compiled into an index.

The Federal Reserve will analyze this data faster than you can binge your favorite Netflix series. If inflation keeps cooling, a rate cut could be on the table by March, giving your wallet some much-needed relief. A higher-than-expected CPI? More interest rate pain ahead.

The Takeaway

Wednesday’s report is more than just a number—it's the showdown between economic stability and potential turmoil. 

With projections indicating slight changes in headline and core CPI, the Fed's response could set the tone for the months to come. A tame CPI could signal a shift towards rate cuts, offering relief to consumers and businesses alike. 

However, a stubbornly high CPI means the Fed will likely keep its foot on the economic brake, risking tighter financial conditions and higher costs across the board. 

The CPI isn’t just for the economists in the boardrooms; it’s a bellwether for how we all feel the pulse of the economy. Will we get the reprieve we hope for, or will the battle with inflation continue? All eyes are on the numbers.

Career Corner

Question

I just had a great conversation with an executive director banker. I asked for a referral, and he offered to refer me, but I have found trouble getting responses on my thank yous/follow-ups/ referrals. It’s Friday. Should I schedule one for Monday morning?

Answer

When was the last time you reached out to them? I’d generally advise you to wait until Tuesday morning or noon to schedule a follow-up—I have seen the highest frequency of responses.

A good rule of thumb is to wait at least 4-5 working days before following up (unless ofc you’re against a time-sensitive application process, in which case you can breach this rule)

Head Mentor, WSO Academy

Check out WSO Academy

What's Ripe

Bilibili, Inc. (BILI) 21.65% 

• Bilibili, the equivalent of YouTube in China, saw its stock get launched today along with several other Asia-based companies. US-listed Chinese stocks performed broadly well following reports that officials would embrace a “moderately loose” monetary policy.

• The prominent video streaming and entertainment platform would definitely benefit from a resurgence in the economy, which has struggled to get back on track post-COVID. Improving economic sentiment would spark growth in Bilibili’s user engagement and subscription levels and ultimately translate to higher revenue.

• Bilibili’s business is heavily reliant on younger, tech-savvy consumers. Their ambitious expansion plan, which involves breaking into gaming and live streaming, stands to benefit directly from China’s policy shifts in the technology and digital spaces.

ResMed (RSMDF) 28.53% 

• ResMed is a top player in the design, manufacturing, and distribution of medical equipment and products such as masks, generators, and other accessories for respiratory disorders. More importantly, it has been one of the best-performing stocks, up 40% YTD.

• They’ve seen a heroic recovery in their business, which has benefitted from facemask resupply programs that helped to improve the supply of their cloud-connected platforms. They’ve also had a strong uptake of the myAir app, which analysts believe will drive higher patient adherence.

• The company has seen consistent, year-over-year cash flow growth of 18.1%, largely as a result of bringing in more revenue with not much additional cost. This should, in theory, beget more success, especially for machine-heavy businesses that are capital-intensive and require larger cash outlays to survive.

What's Rotten

AppLovin (APP) 14.68%

• AppLovin was so close, yet so far. The stock got rejected today after failing to gain entrance into the S&P 500. Forget about the club you were denied access to because of your outfit. This type of pain stings much more. 

• Quarterly rebalancing in the stock market refers to the process of adjusting the composition of indexes to reflect the changing market caps of individual stocks. Gaining entry into the S&P 500 is kind of like a free promo for a company’s stock. Companies gain the eyes and attention of larger fund managers who may only look for companies within a major index.

• While APP was down a bit today, the stock is up 775% this year. That’s probably why investors were so confident that it would get upgraded to the S&P and so shocked when it didn’t happen. We all know the markets are about “what have you done for me lately,” but I would hope that investors wouldn’t turn their backs on a stock that’s given them an almost 800% return in 2024 alone. But perhaps that is the best time to sell. We’re just going to have to wait for Father Time to tell us.

Riot Platforms (RIOT) 13.44%

• Riot Platforms, a big player in B*tcoin mining, saw its stock tumble as the cr*pto market wobbled, largely thanks to the ups and downs of B*tcoin prices and the chaos surrounding major exchanges like Binance pausing withdrawals.

• B*tcoin’s power to drive miner stock prices is like a rollercoaster, and with recent uncertainties—like tech glitches on Binance—it’s no surprise that stocks like Riot’s are taking a dive.

• Even with B*tcoin on a decent rally, smaller mining operations face the heat when energy prices spike and newer tech investments don’t pan out. For Riot, keeping up with efficiency is more than just a flex; it’s survival.

Thought Banana

The Great GPU Showdown

Nvidia, the superstar of the tech world and reigning king of AI chips, has found itself in the spotlight—but not in a good way. 

China’s State Administration for Market Regulation (SAMR) just launched an anti-monopoly investigation into Nvidia, alleging the company might be throwing its weight around unfairly in the market. 

If this sounds like a tech soap opera, buckle up—we’re diving into the juicy details.

What Happened? 

The probe centers around Nvidia’s $6.9 billion acquisition of Mellanox Technologies in 2020. Mellanox specializes in high-performance networking solutions, and this deal made Nvidia a powerhouse in the data center space. 

However, Chinese regulators are sniffing around to see if Nvidia has been naughty by violating anti-competitive rules, like bundling products unfairly or strong-arming customers into exclusivity. 

The company has almost 90% of the shares of the GPU market, with AMD in second place. 

The Numbers

First off, Nvidia’s chips are the backbone of the AI revolution. From training ChatGPT to simulating the next Marvel blockbuster, their GPUs are everywhere. A regulatory smackdown in China could rattle the industry and send shockwaves through supply chains.

On the other hand, China accounts for approximately 5% of Nvidia’s data center revenue and about 10% of its total revenue. 

It’s not zero, but it’s also not a significant portion, even as exposure to the region has increased annually. When faced with the worst-case scenario of a complete sales ban, investors don’t seem worried but locked in. 

This investigation comes amid rising U.S.-China tensions over tech. Uncle Sam recently slapped export restrictions on AI chips to China, aiming to curb their AI ambitions. 

In retaliation, China might be saying, "Fine, but two can play this game." It’s less about what Nvidia is doing in China and more about a power play between two global giants.

How did the company and investors respond? In proper Jensen Huang style, Nvidia played it cool. A company spokesperson said they’re happy to “answer any questions regulators may have about our business.” Translation: “We’re not sweating, you’re sweating.”

Nvidia’s stock dipped 2.6% on the news, though that’s barely a scratch on its 190% rise this year. In other words, Investors aren’t that concerned about it. 

The Takeaway

The investigation is ongoing, and no one knows how far China will go. Will they impose fines? Restrict Nvidia’s operations in China? Force it to sell Mellanox? 

Either way, Nvidia’s genius management team will likely find a way to navigate these choppy waters—they’ve survived plenty of challenges before. 

For now, keep an eye on the headlines and watch how this saga unfolds. It’s a reminder that even tech titans aren’t immune to the Game of Thrones playing out on the world stage.

The Big Question: How might the Chinese antitrust probe and broader U.S.-China tech tensions reshape Nvidia's global operations and revenue streams?

Banana Brain Teaser

Previous

The price of gasoline at a service station increased from $1.65 per gallon last week to $1.82 per gallon this week. Sally paid $26.40 for gasoline last week at the station. How much more will Sally pay this week at the station for the same amount of gasoline?

Answer: $2.72

Today

City X has a population 4 times as great as the population of City Y, which has a population twice as great as the population of City Z. What is the ratio of the population of City X to the population of City Z?

Send your guesses to [email protected]

How Would You Rate Today's Peel?

Happy Investing,
David, Vyom, Ankit & Patrick

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