Rare Israeli Attack On Syria’s Palmyra Launched From US-Controlled Airspace Huge Israeli airstrikes rocked the outskirts of the central Syrian city of Palmyra on Wednesday, with regional reports saying the attacks were launched by Israeli jets utilizing US-controlled airspace over Al-Tanf military base in eastern Syria.  “Israeli warplanes launched a number of missiles from the airspace of the [US] base in the Al-Tanf area on the Syrian–Iraqi–Jordanian border, in the far southeastern countryside of Homs, targeting the vicinity of the city of Palmyra,” Sputnik’s correspondent reported. Getty Images Israeli attacks on Palmyra are rare, if not unheard of, given how deep into central Syria and the eastern desert the town lies. Al-Tanf base is located a little over 200km from Palmyra. The border base has been occupied by US forces for many years now. Syrian state SANA has cited a large casualty count, reporting at least 36 dead and over 50 wounded. SANA reports, “At approximately 1:30 p.m. today, the Israeli enemy launched an air attack from the direction of al-Tanf area, targeting a number of buildings in Palmyra City in the Syrian Desert, led to the martyrdom of 36 people, the injury of more than 50 others, and significant material damage to the buildings and the surrounding area.” Palmyra before the war attracted tourists from across the globe as it is known for its ancient Roman ruins, and is a UNESCO World Heritage site. The iconic ruins and temples were partially damaged when the remote outpost was overrun by the Islamic State terror group in 2015, and many Syrian Army personnel were killed trying to defend it. Syrian government forces with the help of Russian aerial support were able to get Palmyra back from ISIS by March 2016. Russia and Syria have long accused American forces based out of Al-Tanf of training terrorists and facilitating their movements, in order to keep up pressure on Damascus. As for Israel, recent months have seen a clear uptick in air raids on Syria, but these strikes on Palmyra appear to be the single deadliest this year. Israel typically describes its operations as targeting ‘Iranian assets’; however, the Syrian government is saying that many among its territorial defense units as well as civilians were killed. Tyler Durden Wed, 11/20/2024 – 17:20

Waste Of The Day: Nuclear Commission Flies First Class Authored by Jeremy Portnoy via RealClearInvestigations, Topline: A recent inspector general audit of the Nuclear Regulatory Commission’s travel expenses found a slew of waste and potential fraud, including nearly $50,000 in unallowed first-class flights between 2020 and 2023. Key facts: Federal law requires most government employees to fly economy class, with exceptions made for medical or security concerns. To fly first class, employees must submit a written explanation and obtain approval from their supervisor. Workers at the commission only had proper approval for four of the 19 first-class flights that auditors reviewed. In one instance, an employee paid $12,535 for first class when a $1,134 business-class ticket was available Some of the first-class trips were approved by employees who had no authority to do so, according to the audit. Others had no justification. The commission also failed to remove access to travel charge cards for 37 employees that no longer work for the government. Auditors did not find any former employees who used their charge cards, but said there was a “risk” it could have happened. Federal law requires that charge cards have credit limits of $10,000 to minimize spending and financial risk. Auditors found three commission cards with limits of up to $20,000, with no written explanation for the increase. The Nuclear Regulatory Commission’s agency-wide credit limit for travel also may be “too high,” increasing the risk for fraud, auditors said. The commission spent an average of $358,190 on travel each month last year, but is technically allowed to spend $5 million in a single month.  The audit found three transactions on charge cards totaling $9,593 that appeared to be for items unrelated to government business, though further review is needed to confirm the “potential misuse.” In total, employees put 161,816 charges worth $27 million on their travel charge cards from 2020 to 2023. Almost half of the transactions came last year. Federal law requires employees to take a refresher course on charge card spending at least every three years. The NRC made the training voluntary and did not track attendance, auditors found. Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com.  Summary: It’s a bit worrying that the agency tasked with ensuring the safety of nuclear reactors can’t handle the simple process of booking a flight. The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com Tyler Durden Wed, 11/20/2024 – 17:00

Nvidia Drops After Revenue Forecast Disappoints Exuberant Expectations Earlier today we wrote an extensive preview of what to expect from Nvidia’s Q3 earnings (here), but for those who missed it here is the summary: sky high expectations, which only go higher in 2025 and beyond when the full rollout of Blackwell is expected to hit the P&L, with everyone already long (Goldman desk positioning is 9 out of 10) and anything less than perfection would be punished by the market. The bull/bear case summarized by Goldman was as follows: Bulls playing for a ‘break-out’ trade on an expected beat/raise (with downside arguably cushioned by the upcoming Blackwell launch) Bears playing for a reset in the stock driven by a growing list of moving parts (Blackwell noise, scaling laws, custom ASICs/silicon, ROICs, etc) vs valuation back at ~15-mo highs. In terms of expectations, Q3 revenue was projected to come in at $33.25BN, while the median analyst estimate for Q4 revenue is $37.1BN but buyside bogeys were $38BN+ and some were as high as $41BN. Keep in mind that that number has moved around a lot in the past few days as analysts have made last-minute tweaks to their models. While the current high sales estimate for the third quarter is $41.2 billion, some investors have have said that the whisper number may be even higher than that! Beyond the headlines, JPM says that the key near-term bogeys are the following: The margin guide (with a few saying JPM’s 73.8% buyside bar is too high), The possibility of hiccups in the Blackwell ramp which – given the steep ramp – could push revenues to the April quarter; Any guidance on F26 and beyond. Other things to look out for when the company starts speaking will include how much supply it’s getting from its manufacturing partners. Like most chipmakers, Nvidia outsources production. Taiwan Semiconductor is the best in the business, and Nvidia’s pace of growth heavily depends on how well TSMC is able to provide Nvidia with the capacity it needs. Amusingly, Nvidia shares actually closed down today, though far from session lows, ahead of the earnings report. Still, shares are up nearly 200% so far this year, and one of the best performers on the S&P 500 Index. Nvidia’s market cap north of $3.6 trillion makes it the biggest weighting in the S&P 500, meaning that any move in the stock could swing the entire market. With that in mind, here is what NVDA reported moments ago: Revenue $35.08 billion, up +94% y/y, beating the median estimate of $33.25 billion (but in line with Goldman’s expectations of $35BN). Data center revenue $30.8 billion vs. $14.51 billion y/y, beating estimates of $29.14 billion Gaming revenue $3.3 billion, +15% y/y, beating estimates of $3.06 billion Professional Visualization revenue $486 million, +17% y/y, beating estimates of $477.7 million Automotive revenue $449 million, +72% y/y, beating estimates of $364.5 million   Adjusted gross margin 75% vs. 75% y/y, and in line with estimates of 75% Adjusted operating expenses $3.05 billion, +50% y/y, beating estimates of $2.99 billion Adjusted operating income $23.28 billion vs. $11.56 billion y/y, beating estimates of $21.9 billion   Adjusted EPS 81c, beating estimates 74c The revenue trend, as expected, is impressive especially at the Data Center level where all the growth is. Here is a full breakdown of recent results: But while the Q3 results were stellar, the company’s guidance came in on the weak side of the buyside expectations we discussed in our premium preview. Revenue is expected to be $37.5 billion, plus or minus 2%: The “plus or minus 2%” means Nvidia expects 4Q revenue between $36.75 billion and $38.25 billion. The low end is ugly, and even the high end is below the median buyside bogey. Oops: while this was above the median consensus of $37.1BN, it was far below the buyside expectations of $38.8BN; It was also well below Goldman’s Q4 revenue expectations of $39BN and close to where the bank saw the stock dropping -10%.  In fact, some estimates for Q4 revenue were as high as $41 billion! The rest of the guidance was in line but far less important: Gross margins are expected to be 73.0% and 73.5%, respectively, plus or minus 50 basis points. Operating expenses are expected to be approximately $4.8 billion and $3.4 billion, respectively. Other income and expense are expected to be an income of approximately $400 million, excluding gains and losses from non-affiliated investments and publicly-held equity securities. Tax rates are expected to be 16.5%, plus or minus 1%, excluding any discrete items. Nvidia has only missed analysts’ estimates on quarterly revenue once in the past five years. And it has exceeded expectations by as much as 20% in recent periods, creating a very high bar for its performance. The muted outlook suggests that AI excitement may be getting ahead of reality according to Bloomberg. Nvidia investors had bid up the shares nearly 200% in 2024, turning it into the world’s most valuable company at $3.6 trillion in market cap. But the chipmaker has had trouble keeping up with demand for its products and struggled with production snags this year. To be fair, even with the disappointing outlook, Nvidia’s growth over the past two years has been staggering, simply because not one chipmaker has been able to take its market share (Intel unprecedented collapse in recent years can be largely to blame for that). Its sales are poised to double for a second year in a row, and it now notches more money in profit than it used to generate in total revenue (thanks to that 75% profit margin). Nvidia’s data center division alone now has more revenue than its two nearest rivals, Intel and AMD combined. Net income this year is on course to exceed revenue at Intel, a company that was the chip industry’s titan for decades. The company’s biggest moneymaker is its accelerator chip, which helps develop AI models by bombarding them with data. Since OpenAI’s ChatGPT chatbot debuted in 2022, a frenzy of artificial intelligence services has created insatiable demand for the product. Other recent earnings reports have given strong signals for AI. Major Nvidia customers, including Microsoft, Amazon’s AWS and Meta have reaffirmed their commitment to spend on AI infrastructure, even if few have actually done the spend, as we noted during the recent Meta earnings call. Nvidia hopes to stay ahead of rivals by accelerating its pace of innovation. That includes a commitment to updating its lineup annually; the company is currently introducing a design called Blackwell, which is faster and has an improved ability to link up with other chips, and which is expected to hit the company’s P&L early next year, as a bevy of manufacturing challenges have slowed the Blackwell rollout. For now, Nvidia can’t fill all the orders it’s receiving, the company has said. After production improves, supplies will be plentiful, according to CEO Jensen Huang. For his sake, hopefully by then no competitors will have been able to come out with a faster, cheaper chip. The Santa Clara, CA-based company has rapidly expanded its product lineup to include networking, software and services, as well as fully built-out computer systems. Huang is traveling the world lobbying for a broader adoption of his technology and trying to spread its use by corporations and government agencies. Shares of Nvidia fell as much as 5% in after hours trading following the announcement, before settling about 2% lower, far below the 8.8% straddle. They previously closed at $145.89 in New York. Tyler Durden Wed, 11/20/2024 – 16:39

With 63% Of Voters Demanding Her Recall, Soros-Backed Bay Area District Attorney Concedes Authored by Kimberley Hayek via The Epoch Times, Alameda County District Attorney Pamela Price conceded her recall election on Monday, nearly a week after Bay Area voters expressed their frustration with crime and homelessness by voting out multiple progressive leaders. According to unofficial results as of Nov. 20, 63.1 percent of voters in the general election favored replacing Price, who had served in the position for less than two years. Price is a former defense and civil rights attorney. She had never prosecuted a single case when she was elected to the prestigious position. On the campaign trail, she promised criminal justice reforms and a “new era at the DA’s Office” if she was elected. She got a big financial boost from billionaire Democratic mega-donor George Soros and Laurene Powell Jobs, widow of Apple co-founder Steve Jobs, when she first ran for the job in 2018. She lost that race but ran again in 2022 and edged out Terry Wiley, the county’s chief deputy district attorney.  Soros, who funneled more than $5 million into his fundraising PAC, the California Justice & Public Safety, from 2018 to 2020, turned off the money tap to Price and Los Angeles County District Attorney George Gascon this election cycle. Alongside Price, Oakland voters also ousted progressive Mayor Sheng Thao. In San Francisco, Mayor London Breed lost her bid for reelection to a centrist opponent who vowed to crack down on crime and boost small businesses. In a press conference that ran just under 20 minutes, Price outlined her office’s successes during a time when Gov. Gavin Newsom was forced to deploy additional law enforcement support to Oakland, which is within Alameda County’s jurisdiction. “In November of 2022 Alameda County took a huge step forward toward a better criminal legal system,” Price said at Monday’s press conference, referring to her election win two years ago.  “Under my leadership as district attorney, we made incredible strides toward serving the victims in this county.” She said her office “diversified the workforce for the first time in decades,” hiring speakers of Cantonese, Mandarin, Hmong, as well as more African Americans.  She said that a public accountability unit, created under her leadership, “exposed decades of prosecutorial misconduct, excluding Jewish, black residents and sometimes LGBTQ+ residents” from juries. She said there is evidence of an attempt to cover up the misconduct dating back nearly 20 years.  Price also noted that her team prioritized the reduction of gun violence, the fentanyl crisis, and human trafficking. “We prosecuted murderers and other violent persons throughout Alameda County at a higher rate than my predecessor and we processed more than 12,000 cases,” she said.  She also said that she would leave with the largest grant portfolio in the history of the district attorney’s office, with more than $21 million in grants received since January 2023. She credited the portfolio strength to Chief Assistant District Attorney Royl Roberts, who will lead the office as the interim district attorney until a new DA is appointed.  Before working in the Alameda County DA office, Roberts worked as an executive from the Peralta Community College District, where, among other positions, he served as chief assistant to the chancellor and general counsel of the district.  “We must not continue to have two systems of justice that are separate and unequal in Alameda County,” Price said during her press conference. “That is the way of the past. It is up to you and me to make sure that future leaders of this office remain independent decision makers and stay the course of holding public officials accountable, and law enforcement officers accountable, for their actions.” Price initially ran on a platform including offender rehabilitation and police accountability.  During her tenure, Newsom deployed more law enforcement to Oakland, and recently extended the California Highway Patrol’s increased presence there. “We will continue this important work as local leadership transitions,” the governor said in a statement. Newsom had also sent state prosecutors and surveillance cameras to Oakland.  Tyler Durden Wed, 11/20/2024 – 16:20

Missiles, Michelle, & Missed Targets Spark Stock Dump’n’Pump; Bitcoin & Gold Jump Geopolitically, more missiles were reported to have been sent into Russia overnight and that dragged stocks down early… and the micro and the macro kept stocks down for most of the day. Late on, buyers appeared as FOMO spread ahead of NVDA’s earnings. That lifted The Dow into the green for the day… On the Micro side, it was all about Target’s epic fail…   Then, on the Macro side, round 12ET, Fed Governor Michelle Bowman poured some hawkish water on the dovish hopes: “We have seen considerable progress in lowering inflation since early 2023, but progress seems to have stalled in recent months,” ‘Miki’ noted. “I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the end point,” because progress in reducing inflation has slowed. That sent December rate-cut odds significantly lower (33% now)… Source: Bloomberg Mega-Cap tech was slammed at the open, erasing all of yesterday’s gains…before the FOMO buyers stormed in late… Source: Bloomberg Treasury yields ended the day higher with the short-end hit hardest (but still only 3bps) Source: Bloomberg Bitcoin accelerated to yet another new record high today (within a few bucks of $95,000)… Source: Bloomberg Gold rose for the third day in a row, back to its initial low from the election… Source: Bloomberg Notably gold and bitcoin rose together today amid the geopolitical chaos, but decoupled shortly after the US equity market opened… Source: Bloomberg The dollar rallied strongly, erasing Monday’s losses… Source: Bloomberg Crude prices slipped lower this afternoon to end the day unchanged with WTI hovering around $69… Source: Bloomberg Finally, in case you were worried, the ‘Trump Trade’ continues to work.. Source: Bloomberg ..and will continue – if history is any guide – until the inauguration. Tyler Durden Wed, 11/20/2024 – 16:00