Three Things (5/29)

Trades move in T+1

Wall Street is transitioning from T+2 settlement to T+1 settlement on trades for the first time in 100 years. The roaring 20s was the last time T+1 was in place, and T+2 was originally established to reduce risk in the financial system as trading volumes rose. The update doesn’t come without risk: financial institutions are bracing for a number of potential issues such as international investors struggling to source dollars in time for trades and less time for fixing errors.

With yesterday being the first trading day on the T+1 system, today will be a test since it is a “double settlement day” for trades executed on Friday and Tuesday. The change could encourage day trading among retail investors, which has surged recently with meme stock trading. However, the update should ultimately benefit investors by shortening transaction timing, allowing access to cash from stock sales more quickly, and creating a more efficient market to buy and sell securities.

xAI’s supercomputer

Elon Musk announced that his AI startup, xAI, is launching a supercomputer that would train the latest version of the company’s AI chatbot, Grok. Musk said he hopes to power the supercomputer using a cluster of Nvidia’s H100 GPUs, which sent Nvidia soaring even further after strong gains on its earnings last week. The chip cluster would allegedly be four times the size of the biggest GPU clusters in existence today.

If anyone can generate headlines around AI, it’s Elon Musk. His claims that the supercomputer will be out by Fall of 2025 surely sparked some anxiety for private and public company CEOs alike. We love healthy competition that drives innovation, but we have also seen how the urgency to ship new AI assistants and chatbots has put mediocre products, some of which provide misleading information, into the hands of the public. As xAI races to develop the supercomputer, its success will depend not just on speed but quality and accuracy above all.

Golden Goose to IPO

Luxury shoe brand, Golden Goose, known for its high-priced, weathered sneakers with sparkly stars is said to be planning for an IPO in Milan this summer. The shoemaker is currently owned by Permira, a British investment firm that paid €1.3 billion to acquire the company in 2020. Investors are expected to value the company at eleven times this year’s estimated earnings or about €3 billion with comparisons being drawn to Moncler.

A Golden Goose IPO would further contribute to the strong rebound seen in the European IPO market with €11.4B in listings year-to-date or more than double the amount at this time last year. While luxury goods tend to struggle less than their retail counterparts in periods of inflation, the luxury market’s growth has shown signs of slowing. The success of Golden Goose’s potential IPO should be an indication of consumer strength in the U.S. and internationally.

Disclosures:

As of the date of publishing, NVDA is a holding in Titan's Flagship strategy.

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