Trump Trade: Nvidia, AMD said to pay U.S. cut from China chip sales
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CHIP SALES REVENUE: Nvidia (NVDA) and AMD (AMD) have agreed to pay 15% of their revenue from chip sales to China to the U.S. government, Hadriana Lowenkron and Michael Sasso of Bloomberg report, citing a person familiar with the matter. This will be part of a deal with the Trump admin to secure their licenses to export. The revenues will be related to Nvidia's sales of H20 chips and AMD's sales of MI308 in China, the person added.
APPARENT IPO: Shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) moved higher after President Trump over the weekend posted a picture on social media of an alleged initial public offering on the New York Stock Exchange of a company called 'The Great American Mortgage Corporation.' The post followed reporting last week that the Trump administration is weighing an IPO of the government sponsored entries.
Keefe Bruyette keeps Underperform ratings on both Fannie Mae and Freddie Mac after the Wall Street Journal reported on Friday that the Trump administration is planning to do an initial public offering of both later this year. The firm finds 'very unlikely' that an IPO can be done by the end of 2025. There are numerous factors to address before an IPO, including the current minimum capital, which is roughly 4.25% of assets for both companies and results in estimated run-rate returns on equity of 7%-9%, the analyst tells investors in a research note. Keefe believes investors won't be willing to buy shares of companies with such low ROEs. In order for Fannie and Freddie to generate low-teens ROEs, the capital rules have to be changed to remove the buffers and take capital levels back closer to the statutory minimum of 2.5%, contends the firm.
MEETING WITH TRUMP: A week after President Trump called for his ouster, Intel (INTC) CEO Lip-Bu Tan is set to visit the White House on Monday, Lauren Thomas of Wall Street Journal reports, citing people familiar with the matter. Tan and Trump are expected to have a wide-ranging conversation and explain his personal and professional background, sources told the Journal. The CEO may also propose ways that the government and Intel could work together, the people added. Tan seeks rump's approval by showing his commitment to the country, they said.
MARIJUANA CLASSIFICATION: President Donald Trump is debating on reclassifying marijuana as a less dangerous drug, Josh Dawsey of The Wall Street Journal reports, citing people familiar with the matter. Earlier this month, Trump said he was interested in change, the sources added. Such a shift would make it easier to buy and sell pot. Publicly traded companies in the space include Aurora Cannabis (ACB), CV Sciences (CVSI), Canopy Growth (CGC), Cronos Group (CRON), Goodness Growth (GDNSF), Green Thumb Industries (GTBIF), IGC Pharma (IGC), Tilray (TLRY), Trees Corporation (CANN) and Trulieve Cannabis (TCNNF).
IRS COMMISSIONER: President Trump is removing Billy Long, a former Republican congressman, from his job leading the Internal Revenue Service two months after he was confirmed as commissioner, four people familiar with the matter told The New York Times ' Andrew Duehren, Alan Rappeport and Maggie Haberman. Treasury Secretary Scott Bessent will serve as acting IRS commissioner until a permanent replacement is in place, while Long is expected to be nominated to an ambassadorship, the report added, citing sources.
GOLD BARS: A White House official said the Trump administration plans to issue a new policy clarifying that imports of gold bars should not face tariffs after the government surprised traders by ruling that they would, Jennifer Dlouhy of Bloomberg reports. The White House intends to post an executive order shortly to clarify what an official called misinformation about the tariffing of gold and other specialty products, according to Bloomberg.
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