Quantum IONQ, QBTS, RGTI vs AI Chip, NVDA.
On Wed, 08 Jan 2025, US stocks were mixed in a choppy session dictated by swings in US Treasury yields.
Bond market had a hand in Wednesday’s trading (again !).
According to Tradeweb, the yield on the 10-year US Treasury note climbed as high as 4.728% intraday, its highest intraday level since April 2024.
In the end, it settled at 4.691%, vs Tuesday’s 4.684%, stabilized (in part) by a $22 billion auction of 30-year bonds that drew strong investors’ demand. (see above)
As for US market, after bouncing repeatedly between gains & losses, it closed as such: (see above)
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DJIA : +0.25% (+106.84 to 42,635.20).
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S&P 500: +0.16% (+9.22 to 5,918.25).
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Nasdaq: -0.06% (-10.8 to 19,478.88).
2nd Jobs Report.
Wednesday also saw the 2nd of 4 jobs report published. It is US’s private sector non-farm payroll report aka ADP jobs report. (see below)
In December 2024, US private sectors’ employers added 122,000 jobs vs Wall Street forecast of 139,000 job vs November 2024’s 146,000 jobs.
Hiring slowed in several industries. (see below)
In an ironic twist, employment in Manufacturing shrank for the 3rd straight month.
This is definitely a step in the “wrong” direction for the returning president and his “make America great again” (MAGA) campaign that aims to in-source manufacturing back into US again.
Looks like there’s a lot of work (cut out for the new administration) to bring manufacturing back to US where labour is highly regulated (by strong unions) and has become uncompetitive in the real world.
JOLTs vs ADP.
If a comparison is carried out between Tuesday’s JOLTs report (click here ! for details) and Wednesday’s ADP payroll report, both reports paint a somewhat contradictory picture of the US labour market.
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JOLTs showed an increase in job openings, suggesting continued employer demand.
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ADP jobs report however, indicated a slowdown in private-sector job growth.
Even if comparison is carried out between the latest JOLTs report and ADP November 2024 report (released on 04 Dec 2024), the outcome remains the same ie. ADP continued to show a slowdown in private sector employment.
Counter argument is both reports should not be compared because JOLTs' increase in job openings might not translate into hiring due to factors like skill mismatches or economic uncertainty etc...
Neither should ADP jobs report be compared against US’s non-farm payroll (NFP) report out this Fri, 10 Jan 2025. This is because :
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NFP Includes both private and public-sector employment data.
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NFP report compiled by US Bureau of Labor Statistics (BLS) through a survey of a larger sample of households and businesses vs ADP data pool of approx 400,000 businesses that are ADP’s clients.
ADP report can offer insights into private sector hiring trends, it's crucial to consider the NFP report for a comprehensive understanding of overall US employment situation.
Quantum Stocks Tumbled.
On Wednesday, quantum computing stocks literally crashed as a result of $NVIDIA(NVDA)$ CEO’s irresponsible comments in areas of technology where:
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He is not a subject matter expertise on quantum computing.
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He is not qualified to even comment in the first place.
How Bad Was It ?
When trading ended on Wednesday, the Top 3 quantum stocks fell big time: (see above)
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$IONQ Inc.(IONQ)$ fell by -39%, back to 12 Dec 2024 pricing.
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$Rigetti Computing(RGTI)$ fell the most by -49%, back to 23 Dec 2024 pricing.
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$D-Wave Quantum Inc.(QBTS)$ 3rd hardest hit, fell by -36.12%, back to 19 Dec 2024 pricing.
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$The Defiance Quantum ETF(QTUM)$ that includes quantum stocks fell by nearly -5.0%.
Clapped Back.
Thankfully, the CEOs of respective company are fighting back.
On Wednesday, QBTS CEO Alan Baratz fired the first salvo:
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Declared that Jensen Huang is “dead wrong” about quantum computing.
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He is wrong because at D-Wave are commercial already today.
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Companies including Mastercard & Japan’s NTT Docomo are using QBTS’s quantum computers in production to benefit their business operations.
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Not 30 years from now, not 20 years from now, not 15 years from now but right now today.
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Baratz did qualify that “gate-based” quantum computing may be decades away.
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But “annealing approach“ quantum computing is here and now.
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QBTS systems can solve problems beyond the capabilities of the fastest Nvidia-equipped systems.
Even DA Davidson, financial services firm offering a range of financial services and advice to individuals, corporations, institutions and municipalities nationwide, offered their take on Jensen Huang’s comments.
DA Davidson, Hd of Technology research, Gil Luria said:
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Mr. Huang's comments may have been somewhat self-serving.
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Quantum computing will be a major trend in tech in as early as 5 years.
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It poses a serious threat to Nvidia.
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When quantum computing becomes powerful enough, it will likely replace some of the uses of GPU data centers with a much smaller footprint & much faster computation,
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In short, quantum computing is an existential threat to Nvidia, which it would want to wish away.
DA Davidson initiated coverage on IONQ in December 2024, saying it represents a compelling pure-play investment positioned to capitalize on quantum computing's rapid growth, driven by increasing inadequacy of classical computing for solving complex problems.
CES, 9 January 2025 - 9am PST.
IONQ will be part of the panel discussion on the subject 'Quantum is Here: Computing Applications & New Industries.
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It will be a CES’s half-day track on January 9, 2025.
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Featuring thought leaders discussing rapid advancements in quantum, adjacent technologies like optics and sensors, and how AI and machine learning drive business opportunities across industries.
Hopefully, IONQ’s Chief marketing officer (CMO), Margaret Arakawa will take the opportunity to refute the willful claims made by Jensen Huang and put to rest the accusation, once and for all.
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Do you think Friday’s US non-farm jobs report will be in-sync to ADP non-farm jobs report ?
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Do you think Quantum computing stocks will stage a recovery of sort when trading resumes on Friday ?
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