🤯 World Goes Nuts for Copper

MARKET UPDATE

Good Morning Investor! The age old adage “what goes up, must come down“ proves correct yet again after meme stocks including Gamestop (GME) and cinema chain AMC (AMC) have fallen back down to earth just as fast as they shot up due to both companies choosing to dilute share holders to raise capital. Meanwhile, earlier this week shares of game producer Ubisoft (UBSFY) shed 16% after the company forecasted a 27% lower quarterly bookings outlook for the coming quarter.

TODAY’S BIG HEADLINES

• The World is Going Nuts for Copper

• OpenAI Teams Up With Reddit

• Canada Goose Leaves Its Rivals in the Dust

COMMODITIES

The World is Going Nuts for Copper🤯

Commodities Rule: 2024 has been a wild ride on the commodity roller coaster. Gold, that shiny rock we all love, has been reaching for the stars. And cocoa? Well, it’s been partying like it’s 1637 during the Tulip Mania. But wait, there’s a new rock star in town - ladies and gentlemen, put your hands together for copper!

Versatile Rocks: Copper, the versatile virtuoso of the mineral world, is an essential component in everything from electric vehicles to production lines and AI data centres. With AI data centres popping up faster than mushrooms after rain, it’s no wonder copper is the belle of the ball. Just to give you an idea, copper futures have been climbing the charts, up over 30% year-to-date and a whopping 56% since their low note in July 2022.

Market Rescue: In a plot twist worthy of a Hollywood blockbuster, First Quantum Minerals (FM) , one of the world’s top copper producers, found itself in a bit of a pickle recently. But fear not, our heroes - the US government, Arab Emirates, Japan, and Saudi Arabia - are considering swooping in to save the day by taking sizable stakes in the company. The shares jumped up faster than a startled cat, gaining over 7% on Friday. The mission? To keep China from monopolizing copper production and further increasing its stranglehold over global precious metal production.

Making Moves: In other news, BHP Group’s (BHP) record $43 billion takeover bid of Anglo American (AAL) was given the cold shoulder and rejected. But this rejection has only served to turn the spotlight on the red-hot demand for copper. BHP Group should brace for a storm as rival bids are expected to rain down. Meanwhile, Anglo American has unveiled its own master plan, which involves saying goodbye to its diamond, platinum, and steelmaking coal businesses and putting copper in the limelight. The goal? To expand its copper empire, both organically and through strategic acquisitions. Stay tuned for more exciting updates!

ARTIFICIAL INTELLIGENCE

OpenAI Teams Up With Reddit🤝

The AI Coalition: In a continuation of the trend we’ve witnessed in recent times, where OpenAI have been striking deals with various media outlets in an effort to gain access to their resources for training the company’s large language models, OpenAI have finally come to an agreement with the forum hosting site Reddit (RDDT). And surprise, surprise, shares of Reddit pirouetted upwards on the announcement of this deal.

The Nitty-Gritty: The deal is like a backstage pass for OpenAI, giving them access to Reddit’s vast library of information to train its AI models. It’s a bit like the deal they struck with the Financial Times back in April, where OpenAI agreed to help Reddit create an AI feature set for its platform. And as a cherry on top, OpenAI will now become a Reddit advertising partner, bringing in some extra dough for the social media bigwig.

The AI Brotherhood: OpenAI isn’t the first to join this exclusive club. Google (GOOG) inked a similar deal with Reddit back in February, worth a cool $60 million. This allows Google to train its AI models, including Gemini, on the treasure trove of Reddit’s data.

The Inevitable Plot Twist: As the saying goes, it’s not what you know, it’s who you’re invested in! Acting CEO of OpenAI Sam Altman, a former board member of Reddit, currently owns a stake in the business worth an estimated $750 million. Now that’s what I call having skin in the game!

Wall Street Whispers: The announcement of this news sent Reddit shares into a crescendo, up almost 10%. This leaves the stock up a staggering 23% since its IPO back in March. Now that’s music to investors’ ears!

CONSUMER DISCRETIONARIES

Canada Goose Leaves Its Rivals in the Dust🧥

What Slowdown?: Canada Goose (GOOS), the Canadian winter fashion behemoth, known for their parkas that could make a polar bear jealous, recently reported their fourth fiscal quarter earnings. They didn’t just beat analyst expectations, they left them in the dust! While other fashion brands are feeling the chill of a consumer spending slowdown, Canada Goose is soaring into the stratosphere. I hope they packed a parachute!

Financial Medley: The maestro of parka makers orchestrated a top-line beat, a slight bottom-line miss, and some workforce remixing. Here’s the score:

• Revenue hit a high note at $358 million (CAD), significantly exceeding the $315.5 million expected. That’s a crescendo of a sensational 22% year-over-year growth.

• EPS came in at $0.05 (CAD), just shy of the $0.07 expected.

• Managment announced that it would be laying off 17% of its corporate workforce in an effort to cut costs. This generated additional proceeds of $20 million (CAD) for the business.

Geographical Jukebox: The difference maker? China. Despite same-store-sales playing the same tune year-over-year, the Chinese market’s demand hit a high note, boosting the company’s growth. The greater China region, including China, Hong Kong, Macau, and Taiwan, saw sales grow by 29.7%, while the North American region saw a solid 24.5% growth. Quite the contrast to the sad ballads being sung by many other fashion brands in the Chinese market, including Gucci-owner Kering (KER) and British fashion house Burberry (BURBY).

Peering Into the Magic 8-Ball: The company also provided a glimpse into the future, predicting mid-single-digit sales growth for the upcoming fiscal year, driven by its direct-to-consumer business. Meanwhile, same-store-sales are expected to grow by low single digits.

MORE NEWS

Additional market-moving events🌎

Bitcoin Futures: Crypto futures are about to become a whole lot more commonplace, as the world’s largest futures exchange CME is set to adopt Bitcoin trading. (Reuters)

AI on the Run: Microsoft has asked of its China-based AI workers to relocate as tensions between the US and China intensify. (WSJ)

Part-Time Soars: According to Bloomberg, the US is currently experiencing a part-time work boom, driven largely by mothers. (Bloomberg)

Cyber Shopping: Cyber security firm Palo Alto Networks are reportedly purchasing security assets from IBM for an undisclosed amount. This is expected to further expand the company’s customer base. (CNBC)

Record-Breaker: Turkish city Instanbul is planning to privatize their $10 billion Igdas gas grid in what could be Turkey's largest ever IPO. (Bloomberg)

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