Today in the Market (3/21/2023)

Good Evening! Following U.S. and European attempts to strengthen the financial sector, U.S. markets rose on Tuesday.

The S&P 500 increased by 1.30%, while the Dow Jones rose by 0.98%. The Nasdaq Composite gained by 1.58%.

ALL OR NOTHING

Nvidia (NVDA) is going all-in on artificial intelligence (AI) technology at its GTC 2023 developer conference, unveiling new services and hardware designed to enable a slew of AI solutions designed to profit from the frenzy around generative AI.

Let’s Dive In! Nvidia’s new DGX Cloud service, which the firm claims gives corporate clients the supercomputing resources required to train their own generative AI models and other applications, making it one of the show’s most significant announcements.

Everyone is following… Adobe (ADBE), Getty Images, Morningstar, Quantiphi, and Shutterstock are developing AI models on the new platform, according to Nvidia. Adobe, for example, is using the program to develop generative AI models for photos and video that will ultimately be integrated into Adobe Photoshop, Premiere Pro, and After Effects.

Did you know… The data center business for Nvidia has surpassed the gaming segment as the company’s principal revenue generator, contributing $3.62 billion of the company’s $6.05 billion in Q4 revenue in 2022.

YOUR GRAND TOTAL IS... $0

UBS’s emergency purchase of Credit Suisse may have been required to prevent a financial disaster, but it ultimately harmed Investors who held $17 billion in additional tier-one bonds issued by Credit Suisse.

Why? The investors were stunned to learn that their $17 billion were suddenly worth exactly…nothing. With the transaction, the value of those bonds had been totally wiped away.

What are additional tier-one bonds? During the 2008 financial crisis, additional tier-one bonds (AT1s) were created to lessen the risk that taxpayers would have to bail out a collapsed bank. AT1s are seen as riskier investments, but they also have the potential for larger returns.

Therefore, if these bondholders were aware of the danger they were incurring, why are they so upset? Mostly because, in this unprecedented transaction, they lost everything while stockholders did not. According to finance 101, when a write-down occurs, shareholders are often affected before bondholders.

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