ETF Express: Week Ending 8 December 2023

ETF Express is Global X’s weekly coverage of the latest ETF Market Moves, Thematic Spotlight and Commodity Calls.

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  • Cryptocurrency funds (CRYP, EBTC, EETH) topped the charts last week as traders placed bullish bets based on increased institutional interest and positive Jobs data. The US jobs report came in better-than-expected last week, and Ark Invest’s spot crypto ETF appeared close to listing as the company confirmed details around its fees.
  • Carbon credit ETFs (GCO2, XCO2) spent yet another week at the bottom as nations involved in COP28 continued to highlight issues within the current unregulated system. The uncertainty around future climate policy have put traders on edge – COP28 approaches conclusion, while consensus around issues such as fossil fuels and support of developing countries have yet to be reached.
  • There were $378.5 million in reported inflows for the week, and only $88.3 million in outflows, marking a week of net inflows for the Australian ETF industry.

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AMD Launches the “Most Advanced AI Chip” On Market

Semiconductors & AI

AMD has released its MI300 series GPUs, a group of chips which it says is the “highest performing” AI-focused chipsets in the world.1 The new processing unit, particularly the MI300X variant, promises to not only rival, but eclipse Nvidia’s flagship H100 AI processor, and has already seen high demand from companies such as Meta and Microsoft.2 According to AMD, many laptop manufacturers have already begun to receive this hardware, and computers featuring the technology will become available as soon as Q1 2024.3

For the past 12 months, Nvidia’s H100 has been the uncontested industry standard for AI training and output, due to its unrivalled prowess at parsing huge data sets and built-in integration with Nvidia’s proprietary CUDA technology.4 AMD’s MI300X GPU will look to dispute that status quo as it boasts more than double the memory bandwidth of the H100 (which allows for more efficient processing) and up to 20% faster AI deployment, while maintaining comparable speeds to the H100 for AI training.5 Should these metrics hold true in real-world testing, the MI300X would represent the first genuine competitor to Nvidia’s GPUs for AI companies.

AMD’s biggest challenge will be to overcome Nvidia’s true moat, its CUDA infrastructure – a software that has been developed and optimised by Nvidia specifically for AI since 2006.6 The existing ecosystem and familiarity AI programmers have come to expect will be difficult for AMD to emulate quickly. Nonetheless, AMD has developed its own AI software stack ‘ROCm V6’, as well as a program which helps existing CUDA programmers to port and optimise their code for the AMD architecture.7 Looking forward, AMD and Nvidia should both play a large role in the AI processing industry. AMD CEO Lisa Su was particularly bullish about the AI megatrend in her presentation last week, forecasting the industry to be worth US$400 billion by 2027.8

Access the semiconductor industry with SEMI.

 

Silver

Bullish

  • According to the Silver Institute, decreased output from major producers Mexico and Peru is mostly accountable for the projected 2% decline in worldwide mined silver production in 2023.9
  • The Reserve Bank of India has allowed some banks to permit qualified jewellers to remit advance payment for 11 days to facilitate the import of silver through the India International Bullion Exchange IFSC Ltd.10 This measure was earlier permitted for qualified gold importers as notified by the International Financial Services Centres Authority.

Bearish

  • As the impact of high interest rates spread throughout major economies, the industrial demand for silver may weaken.

Explore physical silver with ETPMAG.

Copper

Bullish

  • November saw an unexpected improvement in China’s Caixin Manufacturing PMI, providing confidence the nation’s manufacturing sector is finally starting to improve.
  • Panama intends to close First Quantum Minerals Ltd.’s Cobre operation following a national court’s ruling that the law establishing a new multi-decade operating contract for the mine was unlawful.11 The company generates around 1.5% of the world’s copper supply, therefore the decision is expected to weigh on copper’s fundamental balance.
  • Buyers are rapidly drawing down copper inventories in New Orleans as a logistical snarl at the Panama Canal delays US-bound supplies from top producer Chile.12,13 The drought-stricken Panama Canal is facing an unprecedented backlog that is delaying ships and causing tankers to take longer trips around South America. The channel is a key route for copper traveling from Chile to buyers in the eastern US and Europe.

Bearish

  • Copper market remains in contango — with spot prices below benchmark LME futures — pointing to ample near-term supplies.14
  • Should global economic growth slow next year, copper which is widely regarded as a bellwether could struggle for traction.

Explore copper with WIRE.

Uranium

Bullish

  • The UK will restart discussions with South Korea over building an atomic power station, potentially providing a much-needed boost for the country’s nuclear industry.15
  • Electricite de France SA sold Europe’s first ever nuclear green bond in a €1 billion transaction, which attracted over €3.3 billion in orders.16 Electricite de France SA should be ready to build at least one nuclear reactor per year starting from the next decade as it braces for a surge in low-carbon power demand in Europe and elsewhere.
  • Canada reworked its sovereign green finance framework to include nuclear energy.17 Nuclear green bonds have finally ignited, with Canada becoming the first sovereign borrower to add the emissions-free energy source to a green financing framework.

Bearish

  • A new wave of unplanned nuclear outages in France is exacerbating traders’ fears of a winter shortage of electricity supply.18

Explore uranium with ATOM.

 

Forecasts are not guaranteed, and undue reliance should not be placed on them. This information is based on views held by Global X or referenced sources as at 12th December 2023.