That’s the message emanating from various key actors and assets, communicated in ways that range from subtle subtext, to somewhat fuzzy, to the extremely explicit.

(James Carbone/Getty Images)

 

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Hey Snackers,

A real-life mishmash of different Team Rocket wannabes is having a lot more success thieving “Pokémon” cards than Jessie and James ever did in their attempts to pilfer Pikachu throughout the anime series. Now, the massive boom in the value of “Pokémon” cards, with some seeing 3,000% returns on their collectibles, has spawned a string of “gotta steal ’em all” heists. To give a sense of what treasure the robbers are hoping to catch: the most valuable cards in the recently released Mega Evolutions set are going for over $1,000 each.

On Tuesday, US stocks tumbled and the VIX rose as investors worried about a broader pullback. The S&P 500 and Russell 2000 sank over 1%, while the tech-heavy Nasdaq 100 dropped more than 2% as negative reaction to Palantir’s earnings dragged down the sector, along with big names revealing bearish views on it as well as Nvidia. Unsurprisingly, tech was the worst-performing sector ETF.

 
BRAKE CHECKED

Stocks got speed checked

The stock market is facing a bit of a speed check.

That’s the message emanating from various key actors and assets, communicated in ways that range from subtle subtext, to somewhat fuzzy, to the extremely explicit.

  • Palantir was sold hard, falling 8% yesterday, on what are objectively good quarterly results: its ninth consecutive earnings beat and a boost to its Q4 guidance. The difficulty is, no matter how strong any results are, Palantir is always at risk of a “sell the news” event because of how darn expensive the shares are. 
  • We saw something similar — a sell-off despite very good financials — in the wake of Micron’s earnings report in late September. And bitcoin, another “id” asset, was down over 5% yesterday.
  • The CEOs of Goldman Sachs and Morgan Stanley gave some vague warnings about the potential for a material drawdown in the stock market at an unspecified point in the future.
  • The VanEck Semiconductor ETF saw a broad sell-off, finishing the day down 3.8%.

A retail favorite failing to build on momentum even when it “deserves” to, the heads of banks warning of a pullback, and the most important part of the stock market being told it’s overheating, along with a filing showing that prominent short seller Michael Burry has bet that Nvidia and Palantir will tumble. 

In and of themselves, any single one of these events probably doesn’t equal the S&P 500 being down over 1% on Tuesday. Collectively, under different circumstances, they might not be sufficiently potent for a sell-off of this nature. But the likes of Cboe and Goldman Sachs were flagging signs from the options market that traders were becoming perhaps a little overenthusiastic in their positioning.

THE TAKEAWAY

If you go over a speed bump while driving 100 miles per hour, there’s an extremely high risk of damage to the car even though the obstacle itself isn’t that daunting. Similarly, relatively inconsequential catalysts can cause more market damage at times when exuberance has started to creep in.

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AUTO AUTOS

Uber says it’s doing better in markets where it has autonomous vehicles

Uber’s earnings call yesterday saw the company reveal that markets where it has autonomous vehicles are outperforming markets without them.

Uber said it expects to have autonomous vehicle deployments on its network in at least 10 cities by the end of next year.

  • “The overall US market is strong, but we’re finding that, for example, growth in Phoenix, Austin, Atlanta was more than twice the rest of the US,” CEO Dara Khosrowshahi said on the call Tuesday morning.
  • He also noted that human driver earnings in those markets outpaced the rest of the US.
  • As of September, Google’s Waymo had more than 100 vehicles operating in Austin and “dozens” in Atlanta, where it has partnered with Uber to offer Waymo rides exclusively through the Uber app. 

While Khosrowshahi said it’s too early to tell how the AV business, which is not profitable, affects Uber’s business overall, the relative growth is a “good signal.”

THE TAKEAWAY

Data earlier this year from ride-share comparison app Obi found that consumers were willing to pay more for autonomous rides, citing a notable preference by users of driverless car services to be in a car without a driver.

“I attribute higher demand for AVs to two reasons: a) novelty and ridership enthusiasm for a new experience and b) once consumers have taken rides it’s easy to see that the user experience in an AV is far superior,” Obi CEO Ashwini Anburajan told Sherwood News. “It provides privacy, comfort and safety, and all in a really nice car. The premiums in price are being supported by consumer enthusiasm.”

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THE BEST THING WE READ TODAY

Michael Burry, of “Big Short” fame, makes massive ~$1.1 billion bet against Nvidia and Palantir 

Michael Burry, famous for predicting the 2008 housing crash, has placed massive bets against Nvidia and Palantir, according to a new regulatory filing that reveals the huge put options his fund has bought on the pair. Last week, Burry warned of market “bubbles” on X, writing that “sometimes the only winning move is not to play.” 

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