Meta Debuts New AI Devices, Oracle Falls After Data Center Construction Faces Delays

Zaid Admani (0:00)

Public.com presents The Rundown. Your daily market update in 10 minutes. My name is Zaid Admani, and today is Thursday, September 24th. In today's episode, we'll break down why the bond market just had one of its worst days in a year and a half. We'll also recap Meta's big event, including new AR and VR glasses, and why Wall Street is so hyped about Muse. Then stick around to the end of the show to find out why the news about a data center delay are sending Oracle shares lower. We got a great show for you today.

Let's go.

The stock market took a dip on Tuesday. The S&P 500 fell 0.8%, while the NASDAQ fell by 1.1%.

And it was basically because of the bond market. The bond market yesterday was making some wild moves. The 10-year treasury yield jumped 15 basis points to 5.11%, which is its highest level since July of 2007 And the thing is, bond yields don't typically jump a tenth of a percentage point in one day. But that's what happened yesterday. In fact, it was the biggest one-day jump since the Liberation Day tear of chaos back in April of last year. So, you know, we've been talking about rising bond yields for weeks now, and it just continues to get worse. Yesterday, there were multiple factors that caused the sudden spike in yields. The first factor was a business survey that nobody usually cares about. But this time, Wall Street became obsessed with it because it showed the economy growing at its fastest pace in more than five years. Now, on one hand, that is great news, right? But it also means the Fed will likely keep hiking interest rates because the economy continues to grow so fast. In fact, Fed Governor Michael Barr literally said yesterday, the Fed will probably need to raise rates further to get inflation back down to their 2% target. And that's why traders are now pricing at a roughly 70% chance of another quarter point hike at the October meeting. So those were a couple of reasons driving yields higher. But then in the afternoon came the part that I think really spooked the bond market. The Treasury Department held a $70 billion auction of five-year notes, and the demand for that auction was pretty weak. Basically, the government tried to borrow money and investors weren't thrilled to lend it to them. So when you add all that up, that caused the bond market to kind of panic yesterday. And by the way, this isn't just happening here in the US., bond yields are rising all over the world. The average yield on global government debt is now basically 4%, which is its highest level since 2007 So the bond market continues to tell us that the era of cheap money is over. And as you guys know, as yields keep moving higher, it's gonna have a ripple effect across the economy. It's gonna make mortgages more expensive, corporate borrowing more expensive, and it's gonna impact stock valuations. And that's why I'm kind of surprised that stocks didn't take a bigger hit yesterday. I mean, yeah, I'm sure the NASDAQ was down more than 1%, which isn't great, but this was the worst day for government bonds in nearly a year and a half, and stocks didn't have a total meltdown. I think a part of that is equity investors don't want to just abandon the AI trade. It's just too hot to ignore. But the question moving forward is how much longer can a market rally last if yields keep climbing? It's possible that stocks can keep going up even in a world of 5% yield, but I'm just a bit nervous that something could break. So we'll continue to keep an eye on the bond market and the stock market along with everything else happening. Remember, President Trump is meeting with Chinese President Xi today, so I'm sure there'll be some headlines coming out of that. We'll recap all that for you, so definitely get subscribed to the podcast if you haven't already, and tune in every day to stay in the loop.

Let's run through some headlines. And we're talking Meta again. I know we've talked a lot about Meta this week, but I mean, they are cooking right now. Meta just had their Meta Connect Conference last night, and they showed off a ton of cool stuff and announced some updates to Meta Muse. Let's start with the hardware first. They announced a camera free version of their Ray-Ban smart glasses that only has speakers and a microphone. A lot of people these days are creeped out by these Meta smart glasses that have the cameras in them. So Meta made an audio only version that starts at $349. The company said that audio was the most popular feature on their smart glasses anyways. People use it to listen to podcasts and take phone calls. They removed the cameras, made the glasses lighter and extended the battery life to as much as 12 hours. And personally, I think it's a smart move, especially because they're gonna be integrating AI into it, which I'll talk about in a second. Meta also announced new VR glasses and I think these might be legit. You know, I've been a VR hater for a long time, but based on the demo that I saw, these glasses look like an Apple Vision Pro, but in glasses form, they're much lighter and cheaper. Meta said they'll cost $1,300 when they launched next spring, which is almost a third of the price of the $3,700 for the Vision Pro. And these are the first set of VR products that I actually might get, just based on the demos that I saw. Now, the weirdest announcement last night was something called the Muse Charm. This product basically looks like a Tamagotchi AI gadget with a screen, camera, speakers, microphones, and its own 5G connection. And it's built to have your personal Muse agent built in. Now personally, I'm not very bullish on this. You know, many companies have launched their personal AI companion devices in the past. I just personally don't get the use case for it. Like I would just rather use my phone if I wanted to use Muse. But I don't know, maybe Zuck is banking on millennial nostalgia of the Tamagotchi devices and hoping to sell these. Now, speaking of Muse, Meta is putting Muse on everything. It's going to be available on all the devices that I just talked about. And my takeaway from the event last night is Meta is pushing hard to turn Muse into a platform. They announced new integrations with retailers like Walmart, Best Buy, Gap, and Sephora. And they're adding more connections every day. The long-term idea seems to be that instead of us opening an app and clicking around, we just tell our AI agents what to do, and it talks to the app directly to get stuff done. JP Morgan expects Meta to eventually make money by taking a commission on the stuff that Muse does for you and buys for you. In fact, Zuckerberg actually said that himself in his keynote address. I can see the vision, but I think it's gonna take some time before people really change their behaviors on how they use their phones and interact with apps. The market seems to be very hyped about Meta right now. They have a ton of momentum. JP Morgan went as far to say that they think that Muse could become the most widely used consumer AI app in the world. Right now, that title belongs to ChatGPT. Meta stock is up around 3% today, and it's gone up more than 30% in the past month alone. So all the billions of dollars that Zugg spent on hiring all the AI talent last summer, I guess it's starting to pay off now.