Nvidia: Politicians at Work (Patreon)

Meanwhile, U.S. House Speaker Nancy Pelosi last Thursday disclosed that her husband recently exercised call options to buy Nvidia shares. In a periodic transaction report, the senior Democrat disclosed that her husband, financier Paul Pelosi, exercised call options to buy 20,000 Nvidia shares at a strike price of $100, for a total cost of $2 million. With Nvidia jumping 6.7% to $168.12 on Monday as lawmakers ponder the chip subsidies legislation, Pelosi's shares are now worth almost $3.4 million.

CHIPS RALLY: SENATE EYES SUBSIDIES AS PELOSI'S HUSBAND EYES NVIDIA PROFIT (1240 EDT/1640 GMT)

U.S. chip stocks are rallying on Monday ahead of a potential Senate vote on legislation to bolster the U.S. chip industry, with House Speaker Nancy Pelosi's husband looking at million-dollar profits trading Nvidia (NVD).

The Philadelphia Semiconductor index (SOX) is jumping 2% to its highest level since late June.

Lawmakers are contemplating versions of legislation aimed at making the U.S. more competitive against a rising China, including $52 billion in subsidies and an investment tax credit to boost U.S. manufacturing.

Since AMD (AMD), Qualcomm (QCOMC) and Nvidia design but do not manufacture their own chips, they would not benefit directly from subsidies on manufacturing. Those companies support a separate version of legislation introduced in the House of Representatives that contains both the manufacturing tax credit and a tax credit for chip design activities that would directly benefit them.

A 2012 law makes it illegal for lawmakers to use information from their work in Congress for their personal gain. The law requires them to disclose stock transactions by themselves or family members within 45 days.

Other stock trades disclosed this year by Pelosi include Apple (AAPL.EUR), Microsoft (MSF) and Walt Disney (WDP).

Chip stocks have been hammered in recent months by worries about a potential recession, and by growing signs that the industry is headed for its first sales downturn since 2019. The chip index is now down 30% year to date.

(Noel Randewich)

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BIG YIELD CURVE INVERSION NOT A DEEP RECESSION SIGNAL - CFRA (1200 EDT/1600 GMT)

One might think a big inversion of the yield curve portends a deep recession, but history shows the opposite to be true, says Sam Stovall, chief investment strategist at CFRA.

Stovall found on examining the four deepest inversions of the two- and 10-year yield curve, the average decline in GDP was less than the average for the four shallowest inversions.

Since the recession of 1957-58, all recessions were preceded by an inverted yield curve, with the initial inversion occurring about a year prior to the start of the recession, Stovall says.

However, the deepest part of the inversion typically was recorded just before or during the recession, he says.

Regarding the most recent inversion, while the deepest since 2000, it ranks as the fourth-shallowest inversion based on month-end differences in the two- and 10-year Treasury yields.

The deepest month-ending yield-curve inversions resulted in peak-to-trough declines in GDP of just 2.2%, versus an average of -3.0% for the four shallowest inversions, Stovall said, excluding the Covid-induced recession of 2020.

The gap between yields on two- and 10-year Treasury notes (US2US10=RR), seen as an indicator of economic expectations, was at -17.3 basis points