California AI Bill Vetoed, Mortgage Rates Surge, and SpaceX Rescue Success

September 30, 2024

California Governor vetoes AI regulation bill.

SpaceX Crew Dragon successfully rescues stranded astronauts.

Social Security Cost of Living Adjustment (COLA) estimated at 2.5%.

Mortgage rates rise above 7%, impacting housing market.

Exxon Mobil options trading shows bullish sentiment.

Tech

AI Regulation

California Governor Vetoes AI Bill: California Governor Gavin Newsom vetoed a bill designed to regulate AI, citing concerns that it could stifle innovation. The bill, SB 1047, would have imposed stringent rules on the development of powerful AI models, including a kill switch to prevent potential harm.
Industry Opposition: Major AI companies like Google, OpenAI, and Meta opposed the bill, arguing that premature regulation could hinder AI development and jeopardize California’s leadership in the field.
Musk’s Support: Tesla and SpaceX CEO Elon Musk publicly endorsed the bill, stating it was necessary for California despite being a tough call.
Limited Regulation: Earlier in September, Newsom signed three bills to curb the use of AI in creating misleading images or videos in political advertisements, indicating a selective approach to AI regulation.
Music Collectibles
Vinyl Group Acquires Serenade: Vinyl Group, Australia’s only listed music company, acquired the assets of London-based Serenade, a platform focused on digital and physical collectibles, in an equity-based deal valued at up to US$1.6 million.
Expansion into UK and Europe: The acquisition marks Vinyl’s expansion into the UK and European markets and enhances its offerings in the digital collectibles space.
Performance-Based Earn-Out: Vinyl made an upfront payment of $553,000 in shares with an additional $1 million contingent upon revenue and earnings targets. The combined business needs to achieve $2.76 million in revenue and $345,000 in earnings before interest and taxes within 12 months of the acquisition.
NFC-Enabled Smart Formats: Serenade operates a marketplace for both physical and digital collectibles and has previously supported over 200 global artists, including high-profile names like Liam and Noel Gallagher, Muse, and Sum 41. The company also has partnerships with major record labels. Its key product, NFC-enabled digital “Smart Formats,” built atop Polygon’s infrastructure, has seen 56% month-on-month sales growth since its launch in January.
SpaceX Rescue Mission
Crew Dragon Docked at ISS: SpaceX’s Crew Dragon capsule successfully docked at the International Space Station, bringing back two Boeing astronauts who were stranded in space for months.
Boeing Starliner Malfunction: The Boeing astronauts were stranded due to a malfunction of the Starliner capsule on Jun. 5. The Starliner, on its maiden flight, experienced thruster failures and helium leaks, prompting NASA to return the capsule to Earth without the astronauts.
SpaceX’s Rescue Efforts: SpaceX launched a half-filled Crew Dragon spaceship into orbit specifically to rescue the stranded astronauts, highlighting the ongoing challenges faced by Boeing in its space endeavors.
Digital Textile Printing
Kornit Digital Stock Rally: Kornit Digital Ltd. (KRNT) shares ended the last trading session 5% higher at $26.45, driven by optimism regarding Monster Digital’s plans to expand its digital production.
Shift from Screen Printing: Monster Digital will be adding 10 Kornit Apollo systems in 2025, highlighting a major shift from traditional screen printing to digital textile production.
Earnings and Revenue Growth Expectations: The digital textile printer is expected to post quarterly earnings of $0.08 per share in its upcoming report, representing a year-over-year change of +214.3%. Revenues are expected to be $49.2 million, down 16.9% from the year-ago quarter.
Animation Studio Recovery
Mainframe Studios Business Update: Kartoon Studios (NYSE American: TOON) provided a business update for its affiliated animation production arm, Mainframe Studios, reporting continued growth amid a strong rebound following the settlement of the WGA and SAG strikes.
Series Orders and Production Pipeline: The studio has secured series orders for over 145 episodes, strengthening a continuing pipeline through 2025 and 2026. It presently has four series in production with industry giants, including Spin Master, Sony Kids, and Disney.
Increased Production Demand: Mainframe Studios’ production demand rebounded in the second quarter of 2024 following the resolution of labor disputes. The company has built a highly scalable infrastructure and continues to enhance operational efficiency.
Meta’s AR Glasses
Orion Prototype Unveiled: Meta unveiled its Orion smart glasses at its Connect 24 conference. Orion is a true augmented reality device that actually looks like regular glasses.
Breakthrough for Reality Labs: Orion represents a potential game-changer for Meta’s loss-making Reality Labs segment.
Smart AI Computing: Orion offers a glasses-like look and feel with advanced holographic AR capabilities that project right onto the lenses. The glasses feature smart AI computing, enabling use cases such as using Meta AI to come up with recipes based on food viewed through the glasses.
Potential for Disruption: Meta believes Orion could eventually replace some smartphone use cases and unlock billions in high-profit revenue by disintermediating Apple and Android.

Finance

CVS Health Shareholder Activism

Glenview Capital’s Proposal: Glenview Capital, a significant CVS Health shareholder, is expected to meet with the company’s leadership to present proposed solutions for the struggling business. Glenview holds substantial positions in CVS, Centene, and Teva Pharmaceuticals.
Activist History: CVS has previously faced activist investors, including Sachem Head Capital Management and Starboard Value, both of which have engaged in discussions with company leadership.
Performance Struggles: CVS’s stock has experienced a decline of 22% year-to-date due to three consecutive quarters of reduced full-year guidance.
Insurance Segment Challenges: Higher medical costs in CVS’s insurance segment, primarily driven by increased healthcare procedures following the pandemic, have significantly impacted the company’s bottom line. CVS owns Aetna, the third-largest health insurer in the U.S.
Methode Electronics Lawsuit
Allegations of Misconduct: A securities class action lawsuit has been filed against Methode Electronics, alleging that the company made misleading statements regarding its financial performance and operational capabilities.
Alleged Misleading Statements: The lawsuit claims that Methode failed to disclose issues related to employee losses during the pandemic, production planning deficiencies, inventory shortages, and manufacturing system defects.
Lead Plaintiff Deadline: Investors who purchased Methode common stock between June 23, 2022, and March 6, 2024, have until October 25, 2024, to seek appointment as lead plaintiff.
Outset Medical Lawsuit
Allegations of Misleading Statements: A securities class action lawsuit has been filed against Outset Medical, alleging that the company made false and misleading statements regarding the effectiveness and regulatory approval of its Tablo products.
Misleading Information: The lawsuit claims that Outset Medical misrepresented the FDA approval status of its Tablo products, overstated revenue growth, and lacked adequate sales capabilities.
Lead Plaintiff Deadline: Investors who purchased Outset Medical securities between August 1, 2022, and August 7, 2024, have until October 28, 2024, to seek appointment as lead plaintiff.
Sage Therapeutics Lawsuit
Allegations of Misleading Statements: A securities class action lawsuit has been filed against Sage Therapeutics, alleging that the company made false and misleading statements regarding the effectiveness and regulatory approval of its drug candidates.
Misleading Information: The lawsuit claims that Sage Therapeutics misrepresented the effectiveness of its drug candidates for treating postpartum depression, major depressive disorder, mild cognitive impairment, and essential tremor.
Lead Plaintiff Deadline: Investors who purchased Sage Therapeutics securities between April 12, 2021, and July 23, 2024, have until October 28, 2024, to seek appointment as lead plaintiff.

Healthcare

Drug Development and Innovation

Dr. Robert Langer Joins Klotho Neurosciences Scientific Advisory Board: Dr. Langer, a renowned scientist and co-founder of Moderna, joins Klotho Neurosciences’ Scientific Advisory Board. This partnership strengthens Klotho’s efforts in developing innovative therapies for neurodegenerative diseases like ALS, Alzheimer’s, and Parkinson’s. Dr. Langer’s expertise in mRNA-based therapeutics and drug delivery systems will guide the company’s strategic direction.
Roche’s Push Into Obesity Market with CT-388: Roche Holdings AG outlines its strategy to focus on five key therapeutic areas, including neurology, oncology, immunology, ophthalmology, and cardiovascular, renal, and metabolism diseases. The company aims to launch 20 transformative medicines by 2030. Among these, Roche is accelerating the development of its obesity drug candidate, CT-388, aiming for a commercial launch beyond 2028. Roche projects annual sales of over 3 billion Swiss francs ($3.55 billion) for CT-388 and other early-stage obesity drug candidates acquired from Carmot Therapeutics.
Roche Acquires CDK Inhibitors Portfolio for Breast Cancer: Roche agrees to acquire a portfolio of next-generation CDK inhibitors for breast cancer from Regor Pharmaceuticals for an upfront cash payment of $850 million and potential milestone payments. This acquisition expands Roche’s oncology portfolio, positioning the company as a leader in breast cancer treatment.
Advancements in Medical Imaging
GE HealthCare Receives FDA Approval for Flyrcado (flurpiridaz F 18) for Coronary Artery Disease Detection: GE HealthCare’s Flyrcado, a breakthrough positron emission tomography myocardial perfusion imaging (PET MPI) agent, receives FDA approval. Flyrcado demonstrates superior diagnostic accuracy compared to traditional SPECT MPI, making it more accessible and convenient for patients. This approval marks a significant advancement in cardiac imaging, allowing for more precise diagnosis of coronary artery disease (CAD), the leading cause of death in the United States.
Business and Market Expansion
Mesoblast Secures Funding for Commercialization of Ryoncil®: Mesoblast Limited, a global leader in allogeneic cellular medicines, secures funding through a convertible note subscription agreement with its largest shareholder. This funding enables the company to seamlessly implement its commercial strategy for Ryoncil®, its lead product candidate for the treatment of children with steroid-refractory acute graft versus host disease (SR-aGvHD).
Industry Growth and Trends
PET Scanners Market Booming: The PET scanners market is anticipated to reach $2.1 billion by 2033, driven by the rising prevalence of diseases like cancer and Alzheimer’s. This growth is fueled by the demand for diagnostic tools in hospitals and the emergence of hybrid imaging systems and innovations like SiPM technology and TSPO PET tracers.
Tattoo Removal Industry Booming: New Look Laser College (NLLC), Astanza’s training division, announces its 2025 training course schedule. This comprehensive two-day program equips aspiring laser technicians and aesthetic business owners with the skills and knowledge needed to succeed in the growing tattoo removal industry. NLLC’s hands-on training focuses on advanced laser technology, safety protocols, client consultation, treatment techniques, and business and marketing strategies.

Economy & Real estate

Social Security & Cost of Living

Social Security Cost of Living Adjustment (COLA) Estimate: The Social Security Administration will announce the 2025 COLA on October 10, 2024. Current estimates place the COLA at around 2.5%, which would increase the average monthly check from $1,920 to $1,968, an increase of $48. This estimate is based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) which measures inflation for urban wage earners and clerical workers.
Potential Impact of COLA on Retirees: The estimated 2.5% COLA might not be enough to offset the rising cost of living experienced by many retirees in the past year. Retirees may need to explore additional income sources, such as returning to work, seeking part-time or remote positions, or applying for government benefits.
Preparation for 2025 Budget: With the 2025 COLA announcement approaching, retirees can start planning their budgets for the coming year. They should determine how much they can withdraw from personal savings and how much they will receive from other sources to cover their expenses.
Real Estate Market Trends
Mortgage Rate Impact on Housing Market: The Federal Reserve’s aggressive interest rate hikes have significantly impacted mortgage rates, making homeownership less affordable for many. The average 30-year fixed mortgage rate has risen above 7%, leading to decreased demand and a slowdown in home sales.
Inventory Levels and Market Dynamics: While inventory levels remain relatively low compared to historical averages, the increasing mortgage rates have resulted in fewer homes being listed for sale. This has led to a more balanced market, giving buyers more negotiating power.
Rent Increases and Affordability: Rent prices have been steadily rising, adding to the affordability challenges faced by many Americans. The increasing cost of living is forcing many to seek more affordable housing options or struggle to make ends meet.

Infrastructure

Carbon Capture & Storage Research

New Research Well at LSU: The LSU College of Engineering, in collaboration with Halliburton and ExxonMobil, will begin drilling a new research well in early 2025, furthering research into CO2 capture and storage (CCS) technologies. The well will allow researchers to study CO2 in all three phases under realistic field conditions, enabling them to develop safety and monitoring technologies and validate computer models.
Industry Collaboration: The project is a testament to the importance of collaboration between academia and industry. Halliburton will serve as the primary service provider, providing drilling, cementing, and logging services, while ExxonMobil will act as the drilling operator, bringing their expertise in wells designed for CO2 capture and storage.
Addressing the Need for CCUS: The project highlights the growing need for CCUS technologies to meet environmental commitments. Currently, hundreds of CCUS projects are in early development globally, but the number of commercial sites remains below what is required to achieve climate targets.
Training the Future Workforce: The research well will also serve as a valuable tool for educating and training the next generation of engineers and researchers in the field of CCS. This is crucial for ensuring the successful deployment of these technologies in the future.
Infrastructure Investment & Funding
H2theFuture Project: The project received funding from the U.S. Economic Development Agency and Louisiana Economic Development through the H2theFuture project. This funding highlights the government’s commitment to supporting research and development in emerging technologies.
Industry Support: Halliburton’s in-kind contribution to the project demonstrates the private sector’s investment in CCUS research. This commitment from industry is vital for accelerating the development and deployment of these technologies.
Community Engagement & Education: ExxonMobil plans to work with LSU on community engagement and education related to the energy transition. This is important for building public support for these technologies and ensuring they are implemented responsibly.
Well Specs and Design: The new well will have a large-diameter, carbon-steel outer casing and corrosion-resistant alloy inner casing, allowing for safe and reliable CO2 experiments. The well will be 7,900 feet deep, with a horizontal section allowing for new research opportunities that were not possible with the previous wells.

Commodities

Meme Coin Market Cap Surge

Dogecoin and Shiba Inu Price Increase: Dogecoin and Shiba Inu saw significant price increases, rising 19% and 32% respectively over the past 30 days. The majority of this surge occurred in the past week.
Dogecoin Community Buzz: Elon Musk’s continued support and recent exoneration from market manipulation charges have fueled bullish sentiment around Dogecoin.
Shiba Inu Developments: Shiba Inu’s upcoming “Shib The Metaverse” launch and the recent introduction of its liquid staking platform, K9 Finance, have contributed to its price growth.
Shiba Inu Burn Rate: Shiba Inu’s burn rate has increased by 320.3% since the last burn transaction, with over 10.3 million coins burned in the past 24 hours.
Renewable Energy Market Update
Westbridge Renewable Energy Portfolio Update: Westbridge Renewable Energy is developing a portfolio of solar and battery storage projects in Canada and the United States.
Project Sales and Acquisitions: Westbridge has sold several solar and battery projects in Alberta to Metlen Energy & Metals, bringing in over $40 million in non-dilutive cash.
International Expansion: The company is expanding its project pipeline internationally with projects in the UK and Italy.
Positive Macro Environment: The renewable energy sector is benefitting from a positive macroeconomic environment, including declining interest rates, supply chain normalization, and improving regulatory certainty.
Exxon Mobil Options Trading Analysis
Bullish Sentiment: Whale investors have shown strong bullish sentiment toward Exxon Mobil, with 53% of their trades reflecting positive expectations.
Price Target Range: The majority of options trading suggests a price range between $110.0 and $120.0 for Exxon Mobil in the next three months.
Expert Opinions: Five market experts have issued ratings for Exxon Mobil, with a consensus target price of $135.4. Analyst opinions range from Overweight to Neutral.
Autumn Brands Cannabis: Pesticide-Free Cultivation and Expansion
Pesticide-Free Commitment: Autumn Brands, a women-owned cannabis company based in California, has committed to 100% pesticide-free cultivation.
Growing Consumer Demand: The market for pesticide-free cannabis is expanding as consumers become more aware of product safety and health concerns.
Challenges of Pesticide-Free Growth: Scaling a pesticide-free operation is challenging, requiring a careful balance of beneficial insects and pest control methods.
Expanding Product Line: Autumn Brands is diversifying its product offerings to include wellness products, intimate care items, and hemp-based products.

Politics

US Presidential Election

Harris Leads in Polls: Vice President Kamala Harris currently leads former President Donald Trump in national polls, with a 7-point advantage overall. Polls show a close race in battleground states, but Harris holds a slight lead in six crucial swing states.
Harris Seen as Likely Winner: The Economist’s latest election forecast gives Harris a 3 in 5 chance of securing the Electoral College victory, while Trump has a 2 in 5 chance. Data analyst Nate Silver’s forecast also shows Harris with a higher probability of winning the presidency for the first time since August 28.
Trump’s Popularity Ceiling: Democratic political strategist Michael Meehan believes Trump has hit a popularity ceiling and doubts he can secure the popular vote in the upcoming election, despite recent polls suggesting a tight race. Meehan believes Trump is “polling better than he’s running.”
Harris’s Cannabis Legalization Stance: Harris has publicly stated her support for marijuana legalization for the first time since becoming the Democratic presidential nominee. She cited the historical impact of criminalization on communities of color, particularly the overrepresentation of Black people in cannabis-related arrests.
International Affairs
Escalating Global Tensions: Senator Lindsey Graham (R-S.C.) has voiced concerns about the Biden-Harris administration’s handling of escalating global tensions, highlighting the conflicts in the Middle East, the ongoing Russia-Ukraine war, and changes in Russia’s nuclear policy. He has suggested that the administration lacks a clear understanding of the global situation.
Middle East Tensions Rise: The recent Israeli airstrike that killed Hezbollah leader Hassan Nasrallah has heightened tensions in the region, leading to concerns about the potential for a full-scale war. Despite US calls for de-escalation, the situation remains volatile.
Russia’s Nuclear Policy Shift: Russia’s announcement of changes to its nuclear weapons policy is seen as a response to discussions in the US and Britain about supplying Ukraine with Western missiles. The move signals potential consequences for Western nations involved in attacks on Russia.
Vice Presidential Debate
Harris and Vance to Debate: The first vice presidential debate between Minnesota Gov. Tim Walz (D) and Sen. JD Vance (R) is scheduled for Tuesday.
Harris’s Racial Identity
Harris Addresses Trump’s Comments: Harris responded with confidence to Trump’s comments about her racial identity, suggesting that anyone questioning her identity should engage in self-reflection.

Stock Picks

Fast-Paced Momentum at a Bargain

Price Momentum: Investors’ growing interest in a stock is reflected in its recent price increase.
Long-Term Momentum: While any stock can see a price spike for a short period, it takes a real momentum player to deliver positive returns for a longer time frame.
Fast-Paced Momentum: The momentum for these stocks is fast paced, indicated by a beta higher than 1.
Valuation: Despite possessing fast-paced momentum features, these stocks are trading at a reasonable valuation, indicated by a low Price-to-Sales ratio.
Earnings Surprise
Earnings ESP: The Zacks Earnings ESP compares the Most Accurate Estimate against the overall Zacks Consensus Estimate.
Zacks Rank: The system also utilizes our core Zacks Rank to provide a stronger system for identifying stocks that might beat their next quarterly earnings estimate and possibly see the stock price climb.
Positive Earnings Surprise: Bringing together a positive earnings ESP alongside a Zacks Rank #3 (Hold) or better has helped stocks report a positive earnings surprise 70% of the time.
Annual Returns: By using these parameters, investors have seen 28.3% annual returns on average, according to our 10-year backtest.
Recent Price Strength
Price Increase: A solid price increase over a period of 12 weeks reflects investors’ continued willingness to pay more for the potential upside in a stock.
Sustained Price Trend: It’s important for a potential winner to maintain the price trend, indicated by a positive price increase over the past four weeks.
Breakout Potential: The screen passes only the stocks that are trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
Fundamentals: The stocks have enough fundamental strength to maintain their recent uptrend, indicated by a Zacks Rank #1 (Strong Buy) and a strong Average Broker Recommendation.
Value Investing
Zacks Rank: The Zacks Rank favors stocks with strong earnings estimate revision trends.
Value Grade: The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics including the P/E ratio, P/S ratio, earnings yield, and cash flow per share.
Forward P/E Ratio: The forward P/E ratio is a popular metric used to compare a company’s current share price to its projected earnings.
PEG Ratio: The PEG ratio takes into account the stock’s expected earnings growth rate, providing a more comprehensive view of valuation.
Market Whale Bets
Unusual Options Trades: Financial giants have made a conspicuous bullish move on United Airlines Holdings.
Sentiment: The majority of traders are bullish.
Price Targets: Whales have been targeting a price range from $42.0 to $60.0 for United Airlines Holdings over the last 3 months.
Open Interest & Volume: Examining the volume and open interest provides crucial insights into stock research, gauging liquidity and interest levels for United Airlines Holdings’s options at certain strike prices.