A daily market update from FS Insight — what you need to know ahead of opening bell

“Permanence, perseverance, and persistence in spite of all obstacles, discouragements, and impossibilities: It is this, that in all things distinguishes the strong soul from the weak.” — Thomas Carlyle

Overnight

U.S. consumers more upbeat on economy, inflation Semafor

Nvidia earnings now rival U.S. jobs report for impact on markets FT

Nvidia earnings: stock slips as revenue outlook beats, but not by enough MW

Nvidia announces $50 billion stock buyback CNBC

Super Micro slides on 10-K delay following Hindenburg report BBG

CrowdStrike releases its first earnings results since a faulty update triggered a global outage IP

Salesforce’s CFO will step down, but its stock tops July quarter forecasts Barron’s

Investors jump into U.S. government bond ETFs ahead of Fed interest rate cut FT

Berkshire Hathaway market capitalization tops $1 trillion for the first time FT

Treasury loosens final anti-money laundering rules for investment advisers, real-estate agents WSJ

SEC retreats from ‘swing pricing’ mandate for mutual funds after stiff opposition BBG

Abercrombie & Fitch lifts sales forecast on trendy apparel demand; lofty expectations hit shares RT

OpenAI in talks to raise fresh funds at a valuation of more than $100bn FT

Chicago airport, San Antonio electric and gas, Utah transit price amid steady market BB

Keir Starmer launches U.K.-German treaty bid in meeting with Olaf Scholz FT

AllianceBernstein closes U.K.-domiciled Concentrated Global Equity fund IW

Credit scores without debt? Fintech cards baffle credit industry WSJ

HSBC’s incoming CEO weighs cutting layers of middle management BBG

Citigroup sees revenue boost in pursuit of small-business clients FT

Why founders and VCs keep funding deals quiet more often than we realize CB

The number of 401(k) millionaires at a record high means the ‘slacker’ generation is finally getting its act together MW

China has another firm in its crosshairs over its epic property bust: PwC WSJ

BYD’s earnings growth slows sharply as China price war bites FT

Feuding founders of Two Sigma hedge fund stepping down WSJ

Pair in 1MDB fraud sentenced to years in Swiss prison WSJ

Lego’s costly move to recycled plastic underpinned by surging profits FT

Chinese EV maker Xpeng unveils $22,000 car with self-driving features FT

A growing share of Americans think government climate action is harmful to the economy Semafor

Huge cut in overseas fossil fuel funding even as U.S. fails to comply FT

Arizona deal is the latest sign of booming demand for sites to power AI WSJ

Supreme Court won’t reinstate Biden’s new student-debt plan TH

Yelp sued Google on Wednesday, alleging it used its monopoly to dominate local search and advertising markets CNN

Musk’s legal fights boost longshot Texas bid to become court hub BBG

Is X about to launch a video conferencing tool? TR

92 U.S. citizens recently added to Russia’s ‘stop list’, banning them from entering Russian territory, join Barack Obama, Stephen Colbert, and a number of U.S. senators already on the list CNN

Nearly 4 million people in southern Japan have been urged to evacuate as Typhoon Shanshan made landfall today, leaving thousands of residents without power CNN

Chart of the Day

MARKET LEVELS

MORNING INSIGHT

Good morning!

Will NVDA weak reaction post-EPS trigger rotation or risk-off? Given AI-related spend intact, case stronger for rotation into cyclicals and small-caps, not risk-off.

More in today’s Macro Minute Video linked HERE.

TECHNICAL

NVDA’s earnings failed to exceed the highest sales estimates, though the after-market reaction as of 5pm EST proved fairly muted ahead of the conference call. Our technical take is the lack of a meaningful decline in the after-market could lead to a rebound once Jensen Huang addresses earnings numbers on the conference call. Without making any kind of deep-dive into the numbers, it’s insightful that NVDA beat on revenues and sales, and announced a stock buyback, yet the stock fell only marginally in after-market trading. 

Looking back at Wednesday’s -0.60% SPX decline, this failed to do much damage ahead of NVDA earnings, and Technology proved to be the only major sector out of 11 which fell more than 1% in trading. Three sectors were higher on the day: Financials, Utilities, and Healthcare. Much will depend on the ability of NVDA to trade higher on Thursday for Technology and the broader market to begin rebounding sharply back to new highs. Technically speaking, given a muted reaction to earnings, we feel that such a move should get underway this week into end of month.

Click HERE for more.

CRYPTO

NFT marketplace, OpenSea, has received a Wells Notice from the SEC, according to its CEO, Devin Finzer. A Wells Notice indicates the SEC is considering pursuing regulatory action against a company, in this case regarding NFTs on OpenSea constituting securities. In a statement from Finzer, he expressed his disbelief in the SEC’s actions, which make broad allegations against NFTs, which are largely seen as digital collectibles or art. Finzer argues that digital art should not be regulated in the same manner as collateralized debt positions. The consequences of such a classification would be hundreds of thousands of online artists and creators being responsible for sales of securities, which would be impractical and stifle innovation. It is important to note that OpenSea will have time to present a counterargument to the SEC’s allegations, hopefully providing further information that results in no legal action from the SEC. In addition to OpenSea pushing back against the SEC, Finzer announced that they are pledging $5 million to help cover legal fees for any NFT creators and developers that receive a Wells Notice from the SEC. NFT marketplace tokens have dropped on the news, with BLUR and LOOKS both declining over 10% in the last 24 hours.

BNB Chain has launched its official cross-chain bridge, partnering with Stargate, Celer, and deBridge to improve interoperability within the BNB ecosystem and attract more developers to the network. BNB Chain Bridge integrates with Stargate’s cross-chain liquidity system, Celer’s state-channel-based cross-chain network, and deBridge’s interoperability framework. The bridge will support networks including Ethereum, Base, Arbitrum, Blast, and Linea, among others, aiming to provide users with a simpler and more efficient bridging experience compared to sole-provider solutions. BNB Chain is also creating a liquidity pool to streamline transfers from other chains in an effort to grow its stablecoin ecosystem. BNB is showing modest gains following the announcement, currently trading at approximately $534.

Click HERE for more.

First News

Pickaxes for Gold Miners. Tech giants are getting more creative about how they source clean power. Meta, the parent company of Facebook, has made a significant move in the renewable energy sector by agreeing to buy 150 megawatts of power from an upcoming project by Sage Geosystems, a leading geothermal energy company, slated to start supplying Meta’s data centers in the western United States as soon 2027.

The agreement marks a major endorsement for geothermal energy, a promising clean-power source known for its reliability compared to wind and solar alternatives. The deal also positions Meta to counter criticisms about the environmental impact of AI technologies, a concern increasingly directed at tech companies. Meta’s investment also follows a similar move by Google, which made a substantial investment in geothermal energy last year. In a parallel development, Microsoft has committed to purchasing the entire output from Singapore’s largest solar project, which will span over 1,000 government and public housing buildings.

Of course, the surge in AI rollout adoption has dramatically increased the need for data centers. Per CBRE Group, a commercial real-estate services firm, data centers across the U.S. provide ~6.7 gigawatts of capacity. This capacity is set to grow markedly, with CBRE projecting that by next year, facilities offering over 4.5 gigawatts of additional capacity will be under construction. To put this in perspective, a single gigawatt can supply electricity to roughly 750,000 homes.

While traditional data-center hubs like Northern Virginia, Atlanta, Phoenix, and Silicon Valley continue to expand, development is moving into secondary markets such as northern Indiana, Idaho, Arkansas, and Kansas. Not only is there rising community opposition due to concerns about noise, aesthetics, and competition for power and infrastructure resources; developers are also grappling with uncertainty about whether future electrical production can meet the needs of planned projects, especially as both developers and tenants increasingly demand power from renewable sources like wind and solar.

And so, the AI boom is giving rise to a new type of real estate upstream speculator: those who focus on acquiring and trading land for data centers. A recent example of the trend is a significant transaction involving a startup data-center land-development firm. This week, the company invested $136 million in a 2,100-acre plot near Phoenix, Arizona. Their ambitious 15-year plan aims to transform this site into one of the nation’s largest data-center complexes.

The firm behind this acquisition is Denver-based Tract, which already owns or has contracts to purchase over 20,000 acres of land across the United States. Per Tract, the newly acquired land in Buckeye, Arizona – currently agricultural and undeveloped – has the potential to support data-center development worth up to $20 billion, excluding the cost of the servers that would eventually fill these facilities.

A decade ago, companies sought 15 to 20 acres for a data center; now they’re looking at 500- to 1,000-acre campuses. Founded in 2022 by former Level 3 Communications executives, Tract specializes in acquiring strategically located raw land, securing necessary zoning and permits, and developing essential infrastructure including roads, utilities, and fiber connections. The company then aims to sell these prepared sites to data-center developers or major tech companies like Amazon, Google, and Microsoft. Tract typically invests $100 million to $150 million in site preparation before sale, tapping into the growing demand for large-scale data center facilities driven by the AI revolution.

Relatedly, a growing share of Americans think government climate action is harmful to the U.S. economy, per a new poll by Stanford University and the think tank Resources for the Future. The poll, which had ~1,000 respondents and has been repeated over the last decade, shows that the Biden administration’s key message on climate — that investing in clean energy is good for the U.S. economy — is losing, rather than gaining, traction. And less than half of respondents support tax breaks for EVs, down from 60% in 2015. Support is growing for carbon-based border tariffs. No word on whether respondents care if data centers use renewable energy. WSJ