🤖 A $600 billion bet

The globe-spanning troubles that could push prices up, TSMC's on an AI roll, and CO2 butters up Bill Gates | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for July 19th in 3:10 minutes.   🥳 They say more is merrier. So join us for [Make More Out Of Your Portfolio With US-listed Options]( at 5pm on August 15th. [Grab your free ticket]( Today's big stories - Global shipping snarls and tariff threats revived old worries about inflation, in a déjà vu no one wanted - The skepticism folks have about the AI spending boom isn’t unfounded – [Read Now]( - Chipmaking heavyweight champ TSMC unveiled its AI-powered results Out To Sea [Out To Sea] What’s going on here? Global shipping troubles and threats of fresh tariffs are [casting]( new doubts over whether inflation will keep its cool. What does this mean? A string of attacks by militants off the Horn of Africa has ships zigzagging around, adding weeks to their trips and causing the worst traffic jam at the Port of Singapore since the pandemic crisis. This Red Sea ruckus has jacked up freight costs and insurance bills, and that’s sent the price of a 40-foot container up nearly 300% in the past year. And although trade is still crossing oceans, the problems could swell up and spill over into land-based logistics. Already, US producer prices and UK inflation rose more than expected in June. That’s leaving some wrinkles in the back-to-school and holiday shopping seasons, with the added worry of higher tariffs on Chinese goods threatening to cause further crumples. Why should I care? Zooming out: On fairer shores. We’re not quite at pandemic levels of bad, but these disruptions aren’t nothing – and importers are warning that higher costs will soon hit folks in the wallet. That’s a strong case for moving production closer to home. Some European companies have already been feeling the pinch: electronics store Curry’s reported soaring shipping costs that hurt its bottom line. To make matters worse, the International Monetary Fund has warned that new tariffs and trade barriers from the US and Europe could drive inflation up everywhere, forcing central banks to keep interest rates at their current, economy-stifling levels. The bigger picture: Let’s talk politics. With half the world’s population set to elect new leaders this year, change may be a-coming to lots of places. And big spending is often the key to winning political support. But with government debt and deficits sky-high in the US and Europe, leaders might find it hard to make changes within their budgets. And that could add fuel to the inflation fire, forcing interest rates higher for longer. You might also like: [This little-known theory will turn your inflation world upside-down](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Out To Sea&utm_campaign=daily-global-19-07-2024&utm_source=email) Analyst Take Doubts Are Starting To Creep Up About AI’s $600 Billion Bet [Doubts Are Starting To Creep Up About AI’s $600 Billion Bet]( By Russell Burns, Analyst AI may not have reached world domination (yet), but it certainly dominates the [stock market](. Nonetheless, some folks are starting to wonder whether all the corporate spending on this new technology is worth it when you consider the amount of profit it’s actually generating. And that’s a [reasonable question](. To [answer]( it, I had a look back at Goldman Sachs’ four phases of AI and a model from venture capital giant Sequoia. And, well, it [didn’t go great]( for the bots. That’s today’s Insight: [$600 billion seems like a lot of money… because it is](. [Read or listen to the Insight here]( Bulls have horns for a reason Change might scare some of us – but it excites plenty, too. Case in point: when financial markets start moving as quickly as they are today, many investors take the opportunity to go against the grain or seek quick turnaround trades. That’s where [leveraged and inverse ETFs]( come in. The first lets traders amplify their high-conviction trades, while the latter lets traders bet on price dips without having to “short” assets. That means you could put a bigger bet on a market move or technical signal without accessing more capital. So if you’re a risk-tolerant trader, you’ll want to [find out how to use them safely and effectively](. Our free guide with Direxion – a platform that specializes in tools for decisive investors – has the lowdown: [discover how you could use leveraged and inverse ETFs to amplify your trades](. [Read The Guide]( See Direxion's disclaimers in their guide [here](. When The Chips Are Up [When The Chips Are Up] What’s going on here? Taiwan-based chipmaker TSMC [flashed]( a winning hand and doubled down with a glittering full-year forecast, as the AI boom continues. What does this mean? TSMC reported profit of $7.6 billion in its latest quarter – a 36% jump from the period before, and better than its own glowing expectations. The firm also upped its full-year forecast, betting on revenue growth of over 25%. Some of the improvement along its bottom line is thanks to higher prices on TSMC’s advanced chips – a cost bump that customers appear to be more than willing to pay. To be fair, there aren’t many options: the company makes more than 90% of the world’s most advanced chips, slinging them left, right, and center to the likes of Apple, Tesla, Nvidia, and the US military. Why should I care? Zooming in: The chip dip. US threats of new restrictions on exports to China and potential tariffs have had traders running scared this week, leading to an AI stock dip. But TSMC’s results – and the fact that it doesn’t expect to meet the market’s staggering demand until 2025 (at the earliest) – may have slammed things back into perspective. What’s more, TSMC said it’s continuing with plans to build three big semiconductor factories in Arizona by 2028. And those chips, made in the good ole USA, wouldn’t be subject to tariffs. The bigger picture: Next big things. The good times might keep on rolling for TSMC and AI kingpins like Nvidia – at least for now. But investors can be fickle: when they see a better, less risky opportunity come along, they’ll generally try their hand. The Magnificent Seven and other AI-linked stocks have been running the tables for a while now – but if other stocks get on a hot streak, that’ll shift folks’ attention. You might also like: [The new investing power couple: AI and energy](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=When The Chips Are Up&utm_campaign=daily-global-19-07-2024&utm_source=email) 💬 Quote of the day "Music doesn't lie. If there is something to be changed in this world, then it can only happen through music." – Jimi Hendrix (an American musician, singer, and songwriter) [Tweet this]( Take a seat on the summit’s main stage Thousands of retail investors tuned into our [Modern Investor Summit]( sessions last year. Eager to discover the smartest tools and savviest tricks, they piled into fireside sessions, Q&A panels, and keynote speaker slots with the likes of Jamie Dimon. Now’s your chance to secure a spot at the next one. Our [Summit]( is slated for December this year, and we’re on the lookout for speakers with big ideas and serious know-how. 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