All About The 14
It's been spices, opium, rocketry, once it was fire, now the edge comes from silicon.
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A Different Kind Of Arms Race
In the battle for global hegemony, the US remains out front. By dint of population growth and economic might, China has a shot at running the world within the next 50 years if many things go right, but the US is presently putting up a fierce rearguard action.
With echoes of the 1960s US vs. USSR who-can-gather-up-the-most-nuclear-weapons-and-moonrockets playbook, the Great Powers’ attention is now laser focused on silicon. The US is joining the arms race late, again, but means to win. This time the weaponry of choice is silicon semiconductor. On the positive-action side, the CHIPS Act is a protectionist charter designed to channel great gobs of capital into the US semiconductor industry - particularly the fabrication of chips. And on the negative side, the Federal government is doing all it can to block critical technology exports to China - the latest of which is semiconductor devices capable of computing AI loads efficiently. The poster child company for this is, of course, Nvidia ($NVDA) which is currently trying and potentially failing to navigate US export controls on some of its key chips. Overnight news that one of the company's workarounds has been blocked has caused $NVDA stock to make a further small move downwards, after its dizzying rise of late.
If NVDA retraces even a normal technical amount after its huge run-up, expect to see narratives about the end of the 2023 bull market, how it was just a bear market rally after all, and so on and so forth. We don't see it that way - but we do think $NVDA selling off could be a catalyst alongside June 30 valuations and rotation out of tech and into value laggards that leads to a standard correction in the Nasdaq and maybe the S&P too.
And with that ... onto our usual charts.
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Now the charts already!