I tried to explain this in an earlier post I cannot re find> this is clearer-- Important To Read This! Trillion-Dollar Treasury Vacuum Is Coming for Wall Street Rally 83 1 / 2 Trillion-Dollar Treasury Vacuum Is Coming for Wall Street Rally Sat, June 3, 2023, 9:59 AM EDT In this article: ^GSPC +1.45% (Bloomberg) -- With a debt ceiling deal freshly inked, the US Treasury is about to unleash a tsunami of new bonds to quickly refill its coffers. This will be yet another drain on dwindling liquidity as bank deposits are raided to pay for it — and Wall Street is warning that markets aren’t ready. The negative impact could easily dwarf the after-effects of previous standoffs over the debt limit. The Federal Reserve’s program of quantitative tightening has already eroded bank reserves, while money managers have been hoarding cash in anticipation of a recession. JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou estimates a flood of Treasuries will compound the effect of QT on stocks and bonds, knocking almost 5% off their combined performance this year. Citigroup Inc. macro strategists offer a similar calculus, showing a median drop of 5.4% in the S&P 500 over two months could follow a liquidity drawdown of such magnitude, and a 37 basis-point jolt for high-yield credit spreads. The sales, set to begin Monday, will rumble through every asset class as they claim an already shrinking supply of money: JPMorgan estimates a broad measure of liquidity will fall $1.1 trillion from about $25 trillion at the start of 2023. “This is a very big liquidity drain,” says Panigirtzoglou. “We have rarely seen something like that. It’s only in severe crashes like the Lehman crisis where you see something like that contraction.” It’s a trend that, together with Fed tightening, will push the measure of liquidity down at an annual rate of 6%, in contrast to annualized growth for most of the last decade, JPMorgan estimates. The US has been relying on extraordinary measures to help fund itself in recent months as leaders bickered in Washington. With default narrowly averted, the Treasury will kick off a borrowing spree that by some Wall Street estimates could top $1 trillion by the end of the third quarter, starting with several Treasury-bill auctions on Monday that total over $170 billion. What happens as the billions wind their way through the financial system isn’t easy to predict. There are various buyers for short-term Treasury bills: banks, money-market funds and a wide swathe of buyers loosely classified as “non-banks.” These include households, pension funds and corporate treasuries. Banks have limited appetite for Treasury bills right now; that’s because the yields on offer are unlikely to be able to compete with what they can get on their own reserves. But even if banks sit out the Treasury auctions, a shift out of deposits and into Treasuries by their clients could wreak havoc. Citigroup modeled historical episodes where bank reserves fell by $500 billion in the span of 12 weeks to approximate what will happen over the following months. “Any decline in bank reserves is typically a headwind,” says Dirk Willer, Citigroup Global Markets Inc.’s head of global macro strategy. The most benign scenario is that supply is swept up by money-market mutual funds. It’s assumed their purchases, from their own cash pots, would leave bank reserves intact. Historically the most prominent buyers of Treasuries, they’ve lately stepped back in favor of better yields on offer from the Fed’s reverse repurchase agreement facility. That leaves everyone else: the non-banks. They’ll turn up at the weekly Treasury auctions, but not without a knock-on cost to banks. These buyers are expected to free up cash for their purchases by liquidating bank deposits, exacerbating a capital flight that’s led to a cull of regional lenders and destabilized the financial system this year. The government’s growing reliance on so-called indirect bidders has been evident for some time, according to Althea Spinozzi, a fixed-income strategist at Saxo Bank A/S. “In the past few weeks we have seen a record level of indirect bidders during US Treasury auctions,” she says. “It’s likely that they’ll absorb a big part of the upcoming issuances as well.” For now, relief about the US avoiding default has deflected attention away from any looming liquidity aftershock. At the same time, investor excitement about the prospects for artificial intelligence has put the S&P 500 on the cusp of a bull market after three weeks of gains. Meanwhile, liquidity for individual stocks has been improving, bucking the broader trend. But that hasn’t quelled fears about what usually happens when there’s a marked downturn in bank reserves: Stocks fall and credit spreads widen, with riskier assets carrying the brunt of losses. “It’s not a good time to hold the S&P 500,” says Citigroup’s Willer. Despite the AI-driven rally, positioning in equities is broadly neutral with mutual funds and retail investors staying put, according to Barclays Plc. “We think there will be a grinding lower in stocks,” and no volatility explosion “because of the liquidity drain,” says Ulrich Urbahn, Berenberg’s head of multi-asset strategy. “We have bad market internals, negative leading indicators and a drop in liquidity, which is all not supportive for stock markets.”
I've been digging through Quantum names and I found a SPAC that has fallen on hard times. Which one's haven't? It was $10 at one time obviously and is now under $2. One of my this year's themes I gave out in the beginning of the year aside from my call on AI which is now legendary, I talked about whether some of these SPAC's would roar back to life. There has been some speculation but really that SPAC recovery has not happened... yet.
As the AI craze dies down there wil be variations on AI.... Qunatum Computing is next! About D-Wave Systems Inc. D-Wave is a leader in the development and delivery of quantum computing systems, software, and services, and is the world’s first commercial supplier of quantum computers—and the only company building both annealing quantum computers and gate-model quantum computers. Our mission is to unlock the power of quantum computing today to benefit business and society. We do this by delivering customer value with practical quantum applications for problems as diverse as logistics, artificial intelligence, materials sciences, drug discovery, scheduling, cybersecurity, fault detection, and financial modeling. D-Wave’s systems are being used by some of the world’s most advanced organizations, including NEC Corporation, Volkswagen, DENSO, Lockheed Martin, Forschungszentrum Jülich, University of Southern California, and Los Alamos National Laboratory. With headquarters and the Quantum Engineering Center of Excellence based near Vancouver, Canada, D-Wave’s U.S. operations are based in Palo Alto, Calif. D-Wave has a blue-chip investor base that includes PSP Investments, Goldman Sachs, BDC Capital, NEC Corp., Aegis Group Partners, and In-Q-Tel.
Recent earn report shows the situation. Co may be finding it's footing. First Quarter Fiscal 2023 Financial Highlights Revenue: Revenue for the first quarter of fiscal 2023 was $1.6 million, a decrease of $130,000, or 7.6%, from fiscal 2022 first quarter revenue of $1.7 million. Given the nature of our professional services engagements, the timing of the booked revenue may vary from period to period resulting in some degree of variability in the timing of the corresponding revenue recognition. Bookings1: Bookings for the first quarter of fiscal 2023 were $2.9 million, an increase of $2.2 million, or 297%, from fiscal 2022 first quarter bookings of $733,000. This represents D-Wave’s fifth consecutive quarter of sequential quarter-to-quarter growth in bookings and the fourth consecutive quarter of year-over-year growth in bookings. Average Deal Size1: During the first quarter of fiscal 2023, D-Wave’s average deal size (comprised of both QCaaS and Professional Services bookings) increased by 430% when compared to the first quarter of fiscal 2022. On a sequential quarter-to-quarter basis, the average size deal increased in each of the last five quarters and increased by 68% from the fourth quarter of fiscal 2022 to the first quarter of fiscal 2023 Customers: Over the last four quarters, we had 65 revenue producing commercial customers compared with 63 commercial customers in the immediately preceding four quarters with commercial revenue increasing by 30% between the two periods. Over the last four quarters, we had a total of 109 revenue producing customers compared with 106 total customers in the immediately preceding four quarters, with total customers including commercial, educational and government accounts. GAAP Gross Profit: GAAP gross profit for the first quarter of fiscal 2023 was $421,000, a decrease of $676,000, or 61.6%, from the first quarter of fiscal 2022 GAAP gross profit of $1.1 million, with the decrease due primarily to lower revenue and significantly higher non-cash stock-based compensation expense in the first quarter of fiscal 2023 cost of sales. GAAP Gross Margin: GAAP gross margin for the first quarter of fiscal 2023 was 26.6%, a decrease of 37.4% from the 64.0% GAAP gross margin for the first quarter of fiscal 2022 with the decrease due primarily to lower revenue and significantly higher non-cash stock-based compensation expense in the first quarter of fiscal 2023 cost of sales. Typical post SPAC melt down all these costs.... but what is left after the carnage?
I'm still trying to get my arms around IONQ-- They seem to be the leader in the space-- what I don't get is they claim lots of cloud ability with AMZN & Goog does that mean that you don't actually need the large computer? It all comes through the cloud? After over 25 years of academic research, IonQ was founded in 2015 by Chris Monroe and Jungsang Kim with $2 million in seed funding from New Enterprise Associates, a license to core technology from the University of Maryland and Duke University, and the goal of taking trapped ion quantum computing out of the lab and into the market. In the following three years, we raised an additional $20 million from GV, Amazon Web Services, and NEA, and built two of the world’s most accurate quantum computers. In 2019, we raised another $55 million in a round led by Samsung and Mubadala, and announced partnerships with Microsoft and Amazon Web Services to make our quantum computers available via the cloud. In 2020 and 2021, we built additional generations of high performance quantum hardware, added Google Cloud Marketplace to our cloud partner roster and announced a series of collaborations and business partnerships with leading academic and commercial institutions. On October 1st, 2021, IonQ began trading as IONQ on the New York Stock Exchange, making it the world's first public pure-play quantum computing company. We remain hard at work realizing the world-changing potential of quantum computing.
IonQ Aria Now Available on Amazon Braket 2 Business Wire May 17, 2023·6 min read IonQ’s most powerful, commercially available quantum computer is now available on the world’s most comprehensive and broadly adopted cloud, Amazon Web Services (AWS). AWS users can now choose between IonQ Aria and IonQ Harmony when selecting the right quantum computer for their specific use case. COLLEGE PARK, Md., May 17, 2023--(BUSINESS WIRE)--Today at Commercialising Quantum Global 2023, IonQ (NYSE: IONQ), an industry leader in quantum computing, announced the availability of IonQ Aria on Amazon Braket, AWS’s quantum computing service. This expands upon IonQ’s existing presence on Amazon Braket, following the debut of IonQ's Harmony system on the platform in 2020. With broader access to IonQ Aria, IonQ’s flagship system with 25 algorithmic qubits (#AQ)—more than 65,000 times more powerful than IonQ Harmony—users can now explore, design, and run more complex quantum algorithms to tackle some of the most challenging problems of today. "We are excited for IonQ Aria to become available on Amazon Braket, as we expand the ways users can access our leading quantum computer on the most broadly adopted cloud service provider," said Peter Chapman, CEO and President, IonQ. "Amazon Braket has been instrumental in commercializing quantum, and we look forward to seeing what new approaches will come from the brightest, most curious, minds in the space." IonQ Aria joins its predecessor IonQ Harmony as the second IonQ quantum system available on Amazon Braket. The availability of both systems is designed to ensure audiences with different needs and resources can run workloads across the quantum system best suited for their specific use cases. Additionally, IonQ’s error mitigation techniques can help manage the impact of coherent errors at the circuit level. "The addition of IonQ Aria to Amazon Braket provides our global customers with another choice when it comes to selecting a quantum system that best fits their specific needs," said Richard Moulds, general manager, Amazon Braket. "IonQ was a launch partner for Braket and I am excited to expand our relationship, not only by providing access to their latest generation hardware but also launching the ability to apply error mitigation, for the first time.
It seems to me that if you are going to get all hype about AI you have to get somewhat hyped about Quantum computing. I'm not going to get too science geeky on you but a lot of what I read about D wave is the way they offer decision making to the machine that replicates real human decision making and indeed isn't that the scary part of AI?