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Industry Investment Rating - The report highlights a significant pivot in venture funding from blockchain protocols to AI start-ups, with blockchain funding down 75% while AI funding has doubled from 2022 lows [6][7] Core Report Insights - Bitcoin's price is 6% below its 2021 high and 15% below its all-time high, yet venture funding for blockchain protocols has dropped by 75% [6] - AI start-up funding now constitutes over 40% of all venture/growth funding, indicating a strong shift in investor focus [8] - AI funding has a stronger correlation to Bitcoin prices than blockchain funding, a trend only seen once before in 2020 [8] Blockchain Industry Analysis - Blockchain faces challenges with product-market fit and user engagement, with venture-backed investments unlikely to return significant funds compared to previous cycles [2] - Institutional interest in blockchain, driven by ETFs and the recent halving, has supported prices but not on-chain activity levels [6] AI Industry Analysis - AI start-ups have seen better adoption statistics compared to blockchain, but exit challenges remain in the private market [7] - AI funding has surged, with deal flow dominating other verticals, including blockchain-focused companies [8] Crypto Mining to AI Data Center Conversion - There is a growing opportunity for Bitcoin miners to convert mining facilities into AI data centers, with potential valuations up to $10/watt for powered shell conversions [11] - The conversion of a 150 MW crypto facility to an AI data center could yield significant financial benefits, with an indicative enterprise value of $411 million [13] Venture Funding Trends - Venture funding for AI start-ups has doubled from 2022 lows, aligning with the stock performance of key listed AI companies [7] - AI funding now makes up over 40% of all venture/growth funding, significantly outpacing other sectors [8] Market Performance and Correlations - AI funding shows a stronger correlation to Bitcoin prices than blockchain funding, a trend not seen since 2020 [8] - The report includes detailed correlation data between Bitcoin prices and AI/ML capital invested from 2014 to 2024 [9] Largest Deals and Funding Rounds - The report lists significant VC and PE deals, including Grafana Labs' $328 million 6th round and Borealis Biosciences' $150 million 1st round [17][18] - Notable AI-related deals include Story Protocol's $83 million 3rd round and Slingshot AI's $30 million 2nd round [17]

ab 28 August 2024 Global Research and Evidence Lab China Economic Perspectives Home Destocking Debate and Property Forecast Downgrade Economics China Where are we now in the property downturn? China's property activities have not bottomed since the unprecedented sharp downturn in 2021. The decline in urban housing prices has accelerated since H2 2023 amid elevated inventory pressure, weighing on household home purchase intention, consumption confidence and local government finances. China has eased property ...

M Global Idea Thematics August 28, 2024 03:00 AM GMT What to Buy & Sell Morgan Stanley & Co. International plc+ Edward Stanley Equity Strategist Edward.Stanley@morganstanley.com +44 20 7425-0840 Matias Ovrum Equity Strategist Matias.Ovrum@morganstanley.com +44 20 7425-9902 The market is fidgeting to find the "next big theme" despite the current ones (1) having attractive fundamentals, (2) performing in line with prior multi-year themes, (3) seeing upgrades to consensus estimates and (4) remaining reasonably ...

Investment Rating - The report indicates a positive outlook for the U.S. economy, with expectations of a 50 basis point rate cut by the Federal Reserve in September, contingent on upcoming employment data [7][8]. Core Insights - The U.S. economy is showing signs of robust consumer spending, with real consumer spending increasing by 0.4% in July and an upward revision of 2Q GDP growth to 3.0% from 2.8% [3][4]. - Business spending remains cautious, with nominal shipments of nondefense capital goods declining for three consecutive months, indicating a potential slowdown in business investment [4][5]. - The core PCE price index, the Fed's preferred inflation measure, rose only 0.16% month-over-month in July, suggesting moderating inflation risks [2][9]. - The personal saving rate has dropped to 2.9%, nearing post-COVID lows, raising concerns about future consumer spending sustainability [9][11]. - The labor market shows signs of cooling, with payroll gains expected to be modest at 150,000 for August, maintaining the unemployment rate at 4.3% [6][41]. Economic Growth and Consumer Spending - The report revises the 3Q GDP growth estimate to 1.5%, up from 1.3%, reflecting stronger consumer spending forecasts [3]. - Consumer confidence has improved slightly, with the Conference Board index rising to 103.3 in August from 101.9 in July [11][50]. Business Investment and Employment - Equipment spending forecast for 3Q has been raised to 5.0% from 1.0%, driven by strong aircraft shipments and capital goods imports [5]. - Business sentiment remains cautious, as indicated by downbeat regional Fed surveys, suggesting potential challenges ahead for business investment [4][6]. Housing Market - Housing data remains weak, with pending home sales declining 5.5% month-over-month in July, reaching an all-time low [11][60]. - The report anticipates a significant drop in real residential investment for 3Q, revised down to -10% from -5% [12]. Labor Market Dynamics - The labor market differential from the consumer confidence survey has decreased, indicating a growing perception of job scarcity [45]. - Job openings in the JOLTS report are expected to remain stable, with a slight increase anticipated for August [26][28]. Inflation and Consumer Behavior - The core PCE inflation rate remains above the Fed's target at 2.6% year-over-year, but recent trends suggest a moderation in inflationary pressures [2][61]. - The report highlights a disconnect between consumption and income growth, with real disposable income growth slowing [9][61]. Trade and International Factors - The nominal goods and services trade balance widened to -$80.1 billion in July, reflecting a significant increase in the goods deficit [23]. - The report notes that service imports may receive a boost from payments related to the Paris Olympics, impacting the trade balance [23].

Investment Rating - The report indicates a neutral investment rating with the BofA Bull & Bear Indicator at 6.2, suggesting a balanced market sentiment [29]. Core Insights - The report highlights a structural shift back to a 5% inflation environment, driven by factors such as globalization reversal, low debt, and demographic changes, indicating the beginning of a commodity bull market [3][10]. - It notes that China is increasingly relying on exports as domestic consumption slows, with retail sales growing only 3% annually since 2020 compared to 13% in the previous decade [3][10]. - The report emphasizes the importance of monitoring US hiring trends, as historical data shows that a decline in private sector job share below 40% often precedes a recession [3][4]. Summary by Sections Market Performance - Year-to-date performance shows gold at 22.4%, stocks at 15.4%, and cryptocurrencies at 14.3%, with cash and government bonds yielding minimal returns [2]. - The report notes significant inflows into cash ($24.5 billion) and bonds ($20.7 billion), while equities saw inflows of $13.7 billion [6][18]. Economic Indicators - The report suggests that if the ISM manufacturing index exceeds 49, it could lead to a rise in long-term bond yields, indicating better opportunities in Q4 [2][8]. - The ratio of new orders to inventories is highlighted as a leading indicator for ISM manufacturing PMI, with expectations of an ISM reading of 52 by October 2024 [8][14]. Sector Analysis - The report indicates that the financial sector experienced the largest inflow in six weeks, while utilities faced the largest outflow in ten weeks [7][18]. - It also notes that BofA private clients are reallocating their investments, with significant purchases in REITs and financials while trimming positions in T-bills [7][22]. Global Trade Dynamics - China’s GDP growth is reported at 5%, but domestic growth is sluggish, with consumer confidence at all-time lows [10]. - The report discusses the impact of trade restrictions on global imports, particularly in key industries like electric vehicles and steel, which could limit deflationary pressures [3][10]. Commodity Outlook - The report asserts that commodities are expected to outperform bonds in the coming years, with total returns for commodities significantly higher than those for long-term U.S. Treasuries over the past four years [10][26]. - It emphasizes that the current commodity bull market is just beginning, with annualized returns projected between 10-14% [10].

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The report highlights significant changes in futures positions among various market participants, indicating a shift towards flattener positions in the back end and steepener positions in the front end [5][22][19] - There were notable inflows in equities, particularly from private investors, with Japan and the Caribbean being the top Treasury buyers in June [1] - Large commercial banks saw an increase in deposits and cash assets, while their holdings in UST/Agency and MBS also rose [42] Summary by Sections CFTC Non-Commercial Futures Positions - Non-commercials removed $20.6 billion in the front end and added $5.6 billion in the back end, resulting in a total of $26.2 billion of a flattener position [5][9] - The breakdown of front-end positions included SOFR (-$2.4 billion), TU (-$2.1 billion), and FV (-$2.1 billion) [9] Traders in Financial Futures - Asset managers put on $8.8 billion of a steepener position, increasing their net longs in FV contracts to the highest level in six months [2][16] - Leveraged funds added $9.0 billion of a steepener position, increasing their net shorts in TY contracts to the highest level in six months [2][19] Primary Dealer Positions - Dealers added $2.7 billion in the front end and $22.3 billion in the back end, resulting in a total of $19.6 billion of a flattener position [22][26] - Dealers decreased their net shorts in TY contracts to the lowest level in six months [26] Large Commercial Bank Positions - Deposits increased by $45.7 billion, and cash assets rose by $6.3 billion, with UST/Agency holdings increasing by $18.0 billion and MBS holdings by $16.4 billion [42] Foreign Central Bank Positions - Foreign Central Bank UST holdings decreased by $16.9 billion, while Agency/MBS holdings decreased by $0.4 billion [47]

Global Quantative & Derivatives Strategy August 27, 2024 This material is neither intended to be distributed to Mainland China investors nor to provide securities investment consultancy services within the territory of Mainland China. This material or any portion hereof may not be reprinted, sold or redistributed without the written consent of J.P. Morgan China Equity Flow Monitor Xipu HanAC +852 2800 1029 xipu.han@jpmorgan.com Haoshun Liu +852 2800 7736 haoshun.liu@jpmorgan.com Data as of August 23, 2024 T ...

ab 26 August 2024 Global Research and Evidence Lab US Equity Strategy Earnings Brief 2Q24: August 26 NVDA (6.6% of S&P 500 market cap) reports earnings on Wednesday. EPS is expected to grow 137% (vs. 462% in 1Q24, and expectations of 76% in 3Q24). Reported earnings have beaten estimates for the past 5 quarters. 90.2% of the S&P 500's market cap has reported. 2Q expectations are for revenues to grow 5.1% and EPS by 11.3%. Growth among groups varies significantly, as shown in the table below (a blend of conse ...

ab 30 August 2024 Global Research and Evidence Lab APAC Economic Perspectives Asia by the Numbers (August 2024) Downgrading China's GDP growth forecast to 4.6% in '24 and 4.0% in '25 Despite new easing measures in July, China's property downturn has persisted. Given lingering inventory pressures, we downgraded our property market forecasts, and expect sales, new starts, and investments to continue falling in 2025, albeit at a slower rate. The weakness in property activities and prices has further weighed on ...