GM and BRRR.

There are a few market narratives worth exploring today - namely China’s improved economic data, Uranium’s continued surge and Softbank-backed $ARM’s successful IPO.

We explore these themes in our featured coverage today.

Elsewhere we see union workers at three of the largest automakers (GM, Chevy, & Chrystler) making waves - staging a coordinated walkout as a negotiation tactic.

Workers are demanding a 40% pay bump while the companies have only signaled willingness to bump them by 20%. Watch the two sides split the difference.

There are many reasons Tesla is the only automaker we have exposure to. This is one of them.

As a reminder, for just $2/month or $12.99/yr, you’ll unlock trade notifications and a full view of our actively managed portfolio (+25.6% since inception in March) and watchlist as a premium subscriber.

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Market News

Stocks Fizzle As Rally Flames Out

US stock markets opened with a decline this morning, failing to capitalize on the Thursday's rally. The S&P 500, Dow Jones, and Nasdaq Composite all experienced drops, despite seemingly positive economic news from China.

On a positive note, Arm Holdings, the British chip designer, saw its shares surge in its Nasdaq debut Thursday. The stock climbed on its first day of trading, valuing the company at over $72 billion. However, Arm faces risks around its China exposure and rising competition in the semiconductor industry.

• Perfect Storm Drives Uranium Prices: Surging uranium demand (+30% since 2022) colliding with constrained supply amid escalating geopolitical risks have propelled yellowcake to $65.50/lb, the highest level since 2011, and up 12% in just the past month. The ongoing military coup in Niger (5% of global supply) and Russia sanctions (40%+ of global supply) has pressured production.

• Arm's Market Performance: After its public debut on Thursday, British chipmaker Arm witnessed a significant 25% rise in its stock value. Pricing its IPO at $51 per share, the momentum continued into Friday, with an additional 5% increase in early trading, highlighting the market's confidence in the company.

• Oil Market Fluctuations: The oil market has been a significant influencer of recent inflation trends. WTI crude and Brent futures, after achieving their highest levels in 2023, saw a downturn. This dip in oil futures is noteworthy considering the broader impact of oil prices on global economic indicators.

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Macro News

China's Economy: Silver Linings, Dark Clouds

China's economic landscape in August showcased a blend of growth and challenges. The National Bureau of Statistics reported that retail sales and industrial production both exceeded expectations, indicating a “strong” economic performance.

Retail sales grew by 4.6% year-on-year, surpassing the anticipated 3% growth and showing an improvement from July's figures. Industrial production also saw a rise, indicating a strengthening manufacturing sector.

Amidst these developments, the People’s Bank of China took a significant step by reducing the cash reserve requirements for banks, aiming to inject more liquidity into the system. This marks the second such reduction this year, reflecting the bank's proactive approach to managing the country's economic health.

• Green and Automated Surge: The output of specific industrial products saw remarkable growth, with solar cells and service robots witnessing a surge of over 70% from the previous year. Potentially, this indicates a shift towards green energy and automation in China's industrial sector.

• Real Estate Stabilization: The real estate market, a significant pillar of China's economy, is undergoing an "adjustment" phase. In the initial days of September, there was a 19.3% year-on-year decline in average daily new home sales. However, this was an improvement from the 24% drop observed in August, suggesting some stabilization in the market.

• Private Sector Caution: The private sector's investment sentiment seems to be on a decline, with private, non-state investment falling by 0.7% in the first eight months of the year. This decrease is more pronounced than the 0.5% decline seen in the first seven months, amid growing concerns about the future economic landscape.

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Today’s Reader Poll

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