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Nuclear fusion, starting 2028.

Helion gets support from Microsoft, courtesy Sam Altman.

May 11, 2023

Fake it till you make it. No, seriously Reddit actually did this. When Reddit launched in 2005, their user numbers were so small the founders created a bunch of fake accounts to show that the website was buzzing with activity. And you thought just real estate agents stage open houses with fresh baked cookies didn’t you?

Alright so today we have:

  • Microsoft is giving fusion a shot.

  • US cars are as green as they get.

  • Over 200 Chinese companies listed on Nasdaq are in some accounting trouble.

    Let’s go.

The Big Picture

After the Federal reserve raised interest rates by 0.25%, the Consumer price index in April adjusted to 4.9% compared to 5% in March. This is good, but wait what is a consumer price index? It’s a measure of average change over time, for prices paid by consumers on a wide basket of goods and services.

U.S. Consumer price index Source: tradingeconomics.com | BLS

So basket of goods and services includes food, beverages, housing, apparel, transportation, medical care, recreation, college tuition etc. It covers almost everything people consume. So higher the change in average cost of the basket, higher is the inflation. The Fed was looking to curtail demand by increasing interest rates, and contain inflation. Federal reserve target is 2%. As of now, the federal reserve is considering pausing interest rate increased despite the glowing job growth report in April.

Sector Sweep

Tech

  • Helion, nuclear fusion startup backed by Sam Altman, founder of Open AI, just got it’s first major contract - Microsoft. The company committed to produce electricity via fusion and provide 50MW of power to Microsoft by 2028. Remember, fusion is when 2 lighter nuclei merge to make a heavier nucleus releasing a high amount of energy.

  • Post Samsung smart flip phones, Google pixel is launching a foldable smartphone: Google Pixel Fold. Pixel is 12.1mm thick compared to Samsung Galaxy Z Fold’s - 15.8mm.

  • With 60% of electricity in US coming from fossil fuels, 18% from nuclear power and 22% from renewable energy; electric cars in America are turning out to be cleaner than China, Japan and Germany.

  • LinkedIn, owned by Microsoft, cut 700 jobs and is shutting down their China apps due to slower revenue growth. A whopping 350,000 people in tech have lost their jobs post 2022.

Energy

  • Even as West moves towards nuclear power and tries to phase out dependency on Russia, there is a need for enriched uranium. Nuclear fuel imports from Russia(uranium) is not banned by US, Europe as they scale up share of nuclear power towards their total grid capacity.

Markets

  • PCAOB(The Public Company Accounting Oversight Board) found major auditing deficiencies done on Chinese companies by the likes of KPMG and Pricewaterhousecoopers. About 200+ Chinese companies are in the fear of being delisted from Nasdaq if they don’t audit satisfactorily with PCAOB for 3 consecutive years.

Natural resources

  • Australia’s lithium producers, Livent and Allkem stated that they have agreed to a merger to create a mining behemoth worth $10.8 billion. With the rise of regulations supporting EVs, lithium companies are experiencing a boom in their business.

Finance bro term of the day: Put options

Put options is a contract which gives a buyer/investor the right to sell a particular security at a specific price at a specific time. In the stock market crash of 1987, hedge fund manager Paul Tudor Jones reportedly made a profit of around $100 million by purchasing put options on stock index futures before the crash.

That’s all for today folks. Do keep a lookout for our weekly email about stock deep dives and personal finance strategies this Saturday.

BTW, do tell us how we did. Just hit us with a reply.

Cheers!

Memetic Universe

Have you heard of the legend, Jim Cramer?

Looks about right.