Breakfast | The extent of the Fed rate cut will be announced at 2 am tonight, and Bitcoin briefly rose more than 6%

US retail sales data boost US stocks in early trading, with small-cap indices leading the gains by over 1.8%, Nasdaq up nearly 1.1%, S&P 500 up nearly 0.7%, all hitting new intraday highs alongside Dow Jones, which rose over 0.5% or 213 points. About 1.5 hours after the opening, major indices retreated from their highs, with Dow Jones, S&P, Nasdaq, and Nasdaq 100 briefly turning negative. By the closing bell, only Dow Jones fell, while S&P 500 edged up, marking a seven-day winning streak. Intel rose 8% before closing up 2.7%, while Nvidia reversed to a 1% decline. Chinese concept stocks rose by nearly 2%, with Li Auto surging over 12%.

Wall Street behemoth AI investment fund arrives, BlackRock and Microsoft team up to launch a $30 billion AI infrastructure fund

Microsoft is a general partner of the new fund GAIIP, with Nvidia providing expertise. The fund initially seeks to deploy $30 billion in capital, with a potential total investment of up to $100 billion in the future. BlackRock's CEO stated that building AI infrastructure will unlock trillions of dollars in long-term investment opportunities.

The fund will invest in the construction and expansion of data centers to meet the growing demand for computing power, as well as the energy infrastructure needed to power these facilities. The investments will primarily be in the United States, driving AI innovation and economic growth.

ByteDance reportedly partners with TSMC to develop 5nm AI chips, aiming for mass production by 2026

Media reports indicate that ByteDance has already ordered over 200,000 Nvidia H20 chips worth over $2 billion this year, and plans to have TSMC produce hundreds of thousands of self-developed chips, with costs expected to be several billion dollars lower than purchasing from Nvidia. ByteDance hopes that with roughly the same cost, its cluster of self-owned chips will achieve four times the computing performance of a single H100 chip.

Last month, the Financial Times reported that Baidu, ByteDance, Tencent, and Alibaba have collectively ordered $1 billion worth of A800 processors from Nvidia, along with $4 billion worth of GPUs, all to be delivered this year. Social media reports cited by X suggest that Nvidia will sell 1 million AI chips to China this year, with ByteDance being one of the major clients. Calculated at a unit price of $12,000 for each H20 chip, the Chinese market alone is expected to contribute $12 billion in AI product revenue to Nvidia. Nvidia's total annual revenue in 2020 was only $11 billion.

Google to label images generated by AI in search results to prevent deepfake scams

Google announced on Tuesday that it plans to make adjustments to Google Search to make it clearer to users which images in search results are generated by AI or edited with AI tools.

The company stated that in the coming months, Google will label AI-generated and edited images in the "About this image" window on search, Google Lens, and the Circle to Search feature on Android, with similar prompts possibly appearing on other Google platforms like YouTube. Google mentioned that more related information will be shared later this year.

Cryptocurrency market gets a boost from the Fed's interest rate cut, with Bitcoin briefly rising over 6%

On Tuesday (September 17), the world's largest cryptocurrency Bitcoin rose by 6.4% at one point, reaching a high of $61,337 per coin, although it later fell back. This increase is the largest single-day increase since August 8. At the same time, other cryptocurrencies such as Ethereum, Dogecoin, and Solana also experienced varying degrees of increases, indicating that the entire cryptocurrency market is being driven by the positive news of a possible interest rate cut by the Federal Reserve.

Currently, the market generally believes that there is a high probability that the Federal Reserve will announce a rate cut on Wednesday, with the probability of a 50 basis point cut at around 55%. At the same time, traders have almost fully priced in the expectation of a 25 basis point rate cut by the Federal Reserve, further boosting market optimism.

Trump Family Supports Cryptocurrency Project, Sixty Percent of Tokens Available to the Public

Decentralized Finance (DeFi) project World Liberty Financial will become a banking platform for cryptocurrencies, with 20% of the project tokens allocated to the founding team including the Trump family, 17% of the tokens reserved for user rewards, and the remaining 63% available for public purchase with no pre-sale of tokens.

It has been reported that for over a month, Trump and his family have been vigorously promoting World Liberty Financial with vague descriptions and promises of doing many things. At the end of last month, Trump posted on X, stating that his plan will "ensure that the United States becomes the global capital of cryptocurrencies," while mentioning a decentralized finance (DeFi) project called World Liberty Financial. This is a project that Trump's son has been promoting recently.

"New Fed News Agency" Ultimate Preview of September Meeting: Complex Situation, Uncertainty on First Rate Cut

On Tuesday, well-known financial journalist Nick Timiraos, also known as the "New Fed News Agency," wrote that the Federal Reserve is about to cut rates, but the magnitude of the first rate cut remains uncertain. The Federal Reserve usually tends to act with a 25 basis point cut, but this time, the situation has become complex.

Nick Timiraos also stated that the Fed's decision will be supplemented by quarterly economic forecasts, and if more officials expect a total rate cut of 1 percentage point this year, it means there will be at least one 50 basis point rate cut this year. Delaying a larger rate cut until later this year could raise awkward questions: why is this the best course of action? Another option is to cut rates by 25 basis points in September and expect the same rate cut at the last two meetings of the year, with the option to accelerate rate cuts if the economy deteriorates.

On Tuesday, September 17, on the eve of the Federal Reserve's September interest rate decision, the U.S. Treasury auctioned $13 billion of 20-year bonds. Overall, the auction results were poor, with demand far below expectations.

Bleak Auction of 20-Year U.S. Bonds on the Eve of Federal Reserve's September Interest Rate Decision

The winning rate for this auction was 4.039%, compared to 4.160% on August 21. The pre-issued rate for this auction was 4.019%, 2 basis points lower than the final winning rate, and the tail spread of up to 2 basis points was the largest since the disastrous auction in February, when the tail spread reached 3.3 basis points, setting a record. After that, there were six consecutive instances without a tail spread reflecting weak demand, but this auction saw the return of the tail spread

Morgan Stanley CEO: Fed Rate Cuts Have Limited Impact, More Concerned About Geopolitical Conflicts

Jamie Dimon, CEO of Morgan Stanley, stated that whether the Fed cuts rates by 25 or 50 basis points, this move "will not have a earth-shattering impact."

"They need to do this," Dimon said at a conference on Tuesday. But "when the Fed raises or lowers rates, it's just a minor issue because there is the real economy underneath."

On Tuesday, he reiterated that geopolitical issues (including wars in Ukraine and the Middle East) are his top concerns