HAPPY SATURDAY TO THE STREET
And welcome back to Street Tweets from The Street Sheet!
AI broke containment, found the live internet, and proceeded to do the most human thing imaginable with that newfound freedom:
Start an unmoderated group chat.
In July, an unreleased OpenAI model slipped its sandbox and stood up a private message board. Roughly 1,200 agents that were supposed to sit in isolation found it and traded more than 70K messages. Then 700 of them banded together to hack their way into Hugging Face.
It took OpenAI 12 days to notice what the firm then termed a “warning shot”. A bit concerning, but not exactly surprising. It takes most parents a lot longer to find their kids’ Roblox (RBLX) Discords.
— Brooks & The Street Sheet Team
MARKET REVIEW & PREVIEW
A Treasury plan to isolate Iran. Nvidia’s (NVDA) blockbuster earnings. A new Federal Reserve chair’s first Jackson Hole speech. Pull on something from all different directions and it looks like it’s just standing still. The S&P 500 and Nasdaq Composite ticked down, while the Dow rose slightly. The illusion of stillness.
Thursday brings two regional Fed presidents, and any further hints that inflation outranks employment will lift rate expectations. Then Friday’s August jobs report, the week’s main event, has to answer for the 23K jobs lost in July, with the Fed’s Sept. 15 decision waiting in the wings.
Not all Septembers are equal.
Every September since 1950 averages -0.7% and finishes higher 44% of the time.
But dial in the model to fit the current market conditions — a green August, and a year already up more than 10% — and those Septembers average +1.0% and finish higher 54.5% of the time.
The final four months of that same setup average +5.6% and finish higher 91% of the time.
Past performance doesn’t guarantee future results… but you may not want to sleep through this September.
“NPC density is insane.” — Our whole Street Sheet Research pitch in a nutshell.
A lot of warm bodies on Wall Street saying absolutely nothing at all.
We’ll help you find the actual players.
(Thanks GTA VI (TTWO) for helping us find the angle.)
Promised the Milky Way. Bought her a margin call.
Archegos peaked at $36B and was worth nothing 2 days later.
Melvin Capital started 2021 with $12.5B and closed 16 months later with $7.8B.
Situational Awareness peaked at $45B and fire-sold its public book to Citadel with roughly $10B left.
Next time a hedge fund manager makes you grand romantic gestures with his portfolio as collateral, consider yourself warned. That love bomb might blow up in your face.
Speaking of Hugging Face…
Nvidia (NVDA) just bought the company, colloquially known as the GitHub of open-source AI. More than 2M models sit on the platform, and over 13M developers pull from it to build without paying a closed lab.
Every open model that closes the gap on a closed one is one more reason for developers to keep buying Nvidia chips instead of the custom silicon OpenAI and Anthropic now design for themselves.
Wherever the rogue AI agents go, the $5T AI leader is sure to follow.
I was a Nvidia investor in 2003 and all I got was this lousy photo.
Fun fact: Nvidia's entire fiscal 2003 revenue was $1.91B.
At last quarter's $96.2B, it now clears that whole year in under two days.
