Bugaluu :: News

Nvidia, which controls about 80% of the high-end AI chip market, has surged over 80% since the start of the year amid exponentially-growing euphoria around AI. The literal explosion in NVDA has added a stunning $1 trillion in market cap this year alone.

NVDA is rapidly converging on AAPL’s fading market cap (having overtaken Aramco this week)…

The surge in ‘price’ has prompted some to suggest a stock split is imminent:

“Probably in the next year or so, I expect the stock to split and that would be able to get some small retail investors into the stock where they think it’s out of reach right now,” said Ken Mahoney, president and chief executive officer of Mahoney Asset Management.

The company last announced a four-for-one stock split in May 2021, when it was trading at about $600 per share. Today, the stock is nearing the $1,000 level, extending last year’s 240% surge.

As Bloomberg reports, the reasoning Nvidia gave at the time of the 2021 split was “to make stock ownership more accessible to investors and employees,” according to a press release.

Of course, stock-splits are nothing more than a cosmetic move generally enacted to attract smaller investors.

But it seems ‘smaller investors’ have been anything but shy about piling into this now-giant tech stock.

The stock was on course for its 7th straight daily gain – the longest streak since November – until crypto starte to doive today and smashed the giant AI company’s stock lower…

It seems the 0-DTE gamma-squeezers just abandoned ship…

But…

Remember: today (friday) is 0DTE day for single stocks (indexes are every day).

So any minute now we will see the 0DTE BTFD hordes

— zerohedge (@zerohedge) March 8, 2024

As Goldman Sachs trader, Rich Privorotsky, noted earlier, if you could attempt to bottle the current sentiment of the market toward AI in one chart it would probably look something like the one below:

“Investors have piled into Nvidia-focused exchange-traded funds (ETFs) this year on the frenzy around AI, with inflows into a bullish fund that tracks the shares of the chip designer hitting an all-time high on Wednesday.

Net daily inflows into the GraniteShares 2x Long NVDA Daily ETF NVDL.O hit a record of $197 million, according to LSEG Lipper data.

The assets managed by the ETF have grown to $1.41 billion from $213.75 million at the start of the year.” – RTRS

As Reuters reports, net monthly inflows into leveraged ETFs tracking Nvidia such as the GraniteShares 2x Long NVDA ETF, the Direxion Daily NVDA Bull 1.5X Shares ETF and the T-Rex 2X Long Nvidia Daily Target ETF hit a record in February.

The GraniteShares ETF has already crossed its net monthly flow record within the first six days of the month.

Assets of the three Nvidia-linked ETFs jumped between five and 11 times since the start of 2024, while their prices are up between 143% and 218% year-to-date, outperforming other ETFs.

“Nvidia has been the hottest stock in 2024 and many investors are eager to seek out higher returns in exchange for added risk,” said Todd Rosenbluth, chief ETF strategist at VettaFi.

“We expect to see continued demand for single stock leveraged ETFs as a new wave of must-own companies emerge.”

Well, of course, until the whole house of cards collapses Todd.

Which leaves us asking: if the world and their pet rabbit is literally all-in – selling VIX with leverage, selling calls, buying puts, and 2x levered inverse VIX ETNs, buying 2x-levered NVDA ETFs – who the fuck is left to buy?

By Stefan Koopman, Senior Macro Strategist at Rabobank

Prune In June?

The ECB sharpened its shears for a potential prune in June, even as it kept policy rates steady at yesterday’s meeting, aligning with expectations. Crucially, the central bank’s staff projections for both growth and inflation were revised down, with the ECB’s economists now seeing core inflation at target in 2026, and close to in 2025. This added a dovish element to the meeting, even as president Lagarde was slightly more reserved during the press conference. Nonetheless, her phrase, “we will know a little more in April, but a lot more in June,” was a signal even the famously direct Dutch could pick up on, pointing to a probable rate cut in June. This has now become our base case scenario. We expect further cuts in September and December.

The potential snag in this planned pruning could come from disappointing wage or inflation data. However, using the shears too soon raises the risk that the ECB might have to pause or reverse its course sooner than anticipated. For example, geopolitical tensions could inflate energy prices and freight rates, further jolting global trade. Moreover, with the possibility of President Trump’s return to the White House in 2025, his trade policies could impact European inflation, particularly if they speed up de-globalization and/or China decoupling. Given this backdrop, even if the easing cycle is not interrupted by a new inflationary surge, we believe that the endpoint of this cycle may be higher than markets currently anticipate. For more details, please read the ECB post-meeting comment by Bas van Geffen.

The ECB’s post-meeting cacophony is in full swing this morning. Bundesbank president Nagel said the probability is increasing we could see a rate cut before the summer break, so that could mean June or July. His French colleague Villeroy believes a rate cut in the spring is ‘very likely’, so that could mean April or June. And the Latvian central bank chief Kazaks said that the ECB should keep some optionality even after the first cut is implemented, so that means if there is a cut in June, the ECB may keep its powder dry in July. The odds of a rate cut for April are now just 17% compared to a full rate cut priced in for June. Markets anticipate nearly a full percentage point of cuts by year-end, 8 basis points more than yesterday.

The euro nonetheless climbed against the dollar, reaching 1.095 and heading for its best week of the year. This followed comments from Fed Chair Powell, who said on Thursday that the FOMC is “not far” from having the confidence that inflation would reach 2%. His colleague Mester added that a couple more inflation reports could give confidence on inflation, with the Fed likely in a position to cut rates later this year. We expect the Fed to start pruning in June. President Biden would welcome this news, as he highlighted his administration’s economic achievements in his State of the Union. Many voters still disapprove of how his administration handles the economy, even though it delivered strong job gains, low unemployment, faster-than-expected GDP growth and cooling inflation. The price level, not just its rate of change, remains a liability for the president. Unfortunately for Biden, from this point it is hard to imagine even stronger economic data. This implies that from here the risk is mostly to the downside.

The Bank of England’s DMP survey showed that UK CFOs expect lower inflation going forward, seeing their selling prices rising by 4.3% this year, while realized increases are at 5.4%. The extent of embedded selling price inflation in the UK remains an issue. Companies often adjust prices in response to expected changes in the market and to past price rises. This staggered process can keep inflation going as companies and consumers adjust to each other’s expectations. The average between expected and actual price rises suggest embedded inflation is around 4.9%, close to the survey’s measure of expected wage growth of 5.2%. So even with consumer prices possibly dropping below 2% due to lower energy costs this Spring, we think it is likely the Bank of England will lag the ECB or the Fed when it comes to its first interest rate cut.

Analysts at Goldman Sachs forecast that companies in the S&P 500 will buy back $925 billion in stock in 2024, and this number is expected to exceed $1 trillion by 2025. This increase in stock buybacks is mainly attributed to solid earnings from big tech firms and a possible resolution of political uncertainty surrounding the US presidential elections. 

“We raise our 2024 buyback forecast and introduce a forecast for 2025. We forecast that S&P 500 repurchases will total $925 billion in 2024 (13% yr/yr growth) and $1,075 billion in 2025 (16% yr/yr growth),” analysts Cormac Conners and David Kostin wrote in a note to clients. 

The analysts continued, “Solid earnings growth will be the primary tailwind to buybacks, while elevated valuations and policy uncertainty will be headwinds. We expect buyback growth in 2024 to be driven largely by mega-cap tech stocks.” 

The surge in expected buybacks this year and next comes after repurchases plunged 14% in 2023, the second-largest annual decline since the Global Financial crisis. 

Conners upgraded GS’ S&P500 forecast for 2024 ($241 EPS, 8% growth) and 2025 ($256, 6% growth) due to improving macroeconomic conditions and stronger-than-expected mega-cap tech margins and earnings.

“The broader macro environment since the fall, like the decline in Treasury yields, also helps to inform our forecast upgrade,” the analyst said. 

“Rich valuations and elevated policy uncertainty indicate S&P500 buybacks will grow by slightly less in 2024 than our earnings forecast alone implies,” Conners said, adding:

First, management teams are less likely to deploy cash into repurchases when their shares trade at elevated valuations. The median S&P 500 stock trades at 18x today (87 th percentile since 1990) while the aggregate index trades at 20x (86 th %-ile). We expect multiples will remain near these elevated levels throughout 2024.
Second, history suggests the November general election will lead to elevated policy uncertainty in 2H 2024, incentivizing companies to postpone large increases in buybacks until 2025. 

Also, improving profit growth and expectations of an interest rate cut from the Federal Reserve in June add to bullish animal spirits among investors, suppressing VIX and catapulting the S&P500 to record highs. According to the analyst, this improving environment will send S&P 500 buybacks above the trillion dollar mark for the first time next year. 

They noted the bulk of the buybacks will be from big tech companies:

“Revenue growth for the sectors will be supported by strong consumer spending and increased demand for AI-related products. A continued focus on improving operating efficiency will drive further margin expansion. Info-Tech remains the single largest source of repurchases for the index while Communication Services is the third largest sector for repurchases, behind Financials.”

The Magnificent 7, consisting of Apple, Meta Platforms, Alphabet, Microsoft, Tesla, NVIDIA, and Amazon, will likely drive a substantial portion of S&P 500 buyback growth this year and next. Recent filings show this group had already authorized $215 billion in stock buybacks this year, 30% higher than the level authorized at the same time last year ($166 billion).

“The group’s continued rapid revenue growth should be sufficient to fund AI investments in the coming years without hindering capital return to shareholders,” the analysts said.  

They continued, “The group spent $407 billion on capex and R&D in 2023, representing 23% of their annual revenue and 27% of all S&P 500 capex and R&D. Capex and R&D will top $500 billion in 2025 if spend grows in line with consensus estimates for revenue growth (12% CAGR).” 

And this is very important for the future of buybacks:

“If management teams see attractive investment opportunities beyond this growth in spend, they may limit growth in buyback programs in order to fund investment. However, the sheer scale of their existing capex and R&D spend and the group’s increased focus on operating efficiency suggests this is unlikely,” the analysts said. 

During Thursday night’s State of the Union address, President Biden proposed tripling the current buyback tax on corporations. This move would force executives to spend more cash on workers and factories instead of rewarding shareholders. 

And moar buybacks, please, as Bloomberg macro strategist Simon White sees the market “entering its topping phase.”  

More of the note is available to pro subscribers.

Authored by J. Peder Zane via RealClear Wire,

President Biden and Donald Trump’s sweeping Super Tuesday victories all but ensure the November rematch everyone’s been expecting – and dreading. And yet, this achingly predictable outcome is suffused with intriguing questions that will continue to offer high drama and psycho-drama.

Will Nikki Haley Endorse Trump? Haley never had a path to the nomination, but she definitely had plenty of well-heeled backers happy to fund the one Republican willing to attack Trump. After Tuesday’s thumping, she has finally thrown in the towel, though it’s not clear if she is listening to the people or whether the donors have abandoned her. She has reportedly not decided whether she will honor her pledge to the Republican National Committee to support the party’s ultimate candidate. In public statements, it is not her conclusion that Trump is “totally unhinged” that is giving her pause about backing him to be the leader of the free world, but his sensible effort to stack the RNC with his own people. On Sunday, displaying verbal gymnastics that would make Bill Clinton proud, she said, “The RNC [I pledged to] is now not the same RNC.”

If she believes this, it is a profound misreading of democracy. GOP voters selected Trump, not the RNC. Oh, the irony! As Democrats and Never-Trumpers issue bogus warnings about the grave threats Trump poses to democracy, our democratic system is the only reason he is poised to win the nomination. If candidates were still anointed by leaders in smoke-filled rooms, Trump is the last guy they would have picked. The Republican party is a bottom-up party in which voters – many of whom, horrors of horrors, do not possess college degrees – still reign.

This is in stark contrast to the Democratic Party. Since its early days as an instrument of Southern planters and Northern machines before giving way to the modern era’s progressive technocrats, the party has always been a top-down organization controlled by elites who claim to know what’s best for the people. That’s a major reason why Biden, despite low poll numbers and the belief among his own voters that he is too old to be an effective leader, faced no real primary challenge. He was the party’s pick.

Will Democrats Force Biden From the Race? While a Biden-Trump rematch seems assured, the race promises many monkey wrenches. Recognizing that their scorched earth attacks may be backfiring – Trump seems to be proving the adage “What does not kill me makes me stronger” – Democratic leaders spooked by Biden’s unpopularity are ramping up their panicked calls for him to step aside. But the pooh-bahs are facing strong resistance from the candidate. This is not surprising. They made a Faustian bargain in 2020 when they settled on Biden in large part because he had no core beliefs. The man who turned against bussing during the 1970s and supported 1994’s law and order crime bill because those were politically convenient stances was easily transformed into a crusader against alleged white supremacy and a champion of DEI and trans rights.

What they didn’t count on was Biden’s heroic self-image. His multiple plagiarism scandals reveal his rare ability to convince himself that other people’s ideas are really his own. Despite all evidence, he believes he is the smartest guy in the room. His insistence on repeating false stories – on everything from the deaths of his first wife and his son Beau, to his trips on Amtrak and his handling of classified documents – suggests he lives in a fantasy world where his tall tales are true. Democratic leaders are going to have a hard time convincing the president, who apparently believes he is leading the race, to stand down. The people love me, man.

How Do You Solve a Problem Like Kamala? Never say never in politics. Given Biden’s age – and Trump’s for that matter – health issues could arise. But Democrats are in an especially tough position because Harris is just as unpopular. If Biden were to step aside, it would be hard for the party of identity politics to bypass the first black vice president for a person of pallor like Gavin Newsom or Amy Klobuchar. In this context, Michelle Obama seemed the only viable option until she closed that door once more this week. Harris may be Biden’s ace in the hole.

Will Lawfare Finally Sink Trump? Trump’s position as the Republican nominee seems assured, but he faces even stronger headwinds than Biden. Some are rooted in the Democrats’ corruption of the legal system. Those 91 felony counts may be a hit job, but they will take time and money to defend. Trump has great energy, but it is not limitless. Those attacks have clearly boosted his campaign, but it is hard to predict what impact a criminal conviction, if it comes, might have on swing voters. The Supreme Court may have unanimously rejected Democrats’ effort to kick Trump off the ballot – again, they really don’t trust voters – but his opponents are sure to concoct other bogus lines of attack that Harvard law professors and New York Times scribeswill describe as serious threats until they are eventually debunked. Look for Russia collusion 9.0, 10.0, etc.

Will Trump Ultimately Sink Trump? But, as with Biden, Trump’s potential pitfalls are also rooted in his psychology. A born salesman, he talks in hyperbole – I had the largest crowd, the biggest tax cuts, the best economy – that keeps fact-checkers busy. Having made his fortune running a family business, he values loyalty above all else. When people he expects to serve fail to bend the knee, he lashes out. Hence, his mockery of Haley and his dismissal of every other Republican who opposes him as a RINO. Trump thrives on such conflict; he runs toward every fight. This is catnip for voters fed up with politics as usual, but it turns off plenty of others. It may also cost him a close race if, for example, Haley decides to run as a third-party candidate, offering a haven for disenchanted Republicans.

At bottom, Trump seems incapable of rising above himself. He has his moments, as when he recently told Fox News presenter Laura Ingraham “I don’t care about the revenge thing. … My revenge will be success.” But just when you think he’s figured out how he should act, he goes back to being his brawling self. Authenticity will only take you so far in politics. Be yourself, sure. But also be presidential.

These are our choices America, the ones we knew we’d get and long dreaded. The next eight months will remind no one of Periclean Athens, but they won’t be boring. Fasten your seat belts, it’s going to be a bumpy ride.

In the wake of a handful of the humanitarian air drops delivered by US C130s over the Gaza Strip, the White House has come under fire by critics who say the effort has sent too little food and is thus ineffective for the over two million Palestinians who face starvation.

For example last weekend’s airdrop by United States and Jordan included 66 bundles of aid containing 38,000 meals. Progressives have called this a “shimmering stunt”. An op-ed in Mother Jones notes that “A very small NGO, Anera, does 150,000 meals a day. They do four times the amount of meals that the United States Air Force did, but every single day. The US Air Force had two drops in four days. A small NGO is effectively doing much better.”

Via ABC news footage

In President Biden’s State of the Union address Thursday night, he ordered the Pentagon to conduct an “emergency mission” to expand US humanitarian access to the Gaza Strip – this time using a maritime route. He described that a port will be built by the US military, and will utilize a temporary pier to get supplies from ships to the people of Gaza.

“A temporary pier will enable a massive increase in the amount of humanitarian assistance getting into Gaza every day,” President Biden said, and called on Israel to “do its part” be letting more aid into the besieged territory while ensuring that “humanitarian workers aren’t caught in the crossfire.”

“Humanitarian assistance cannot be a secondary consideration or a bargaining chip,” the president emphasized, after recent tensions with Tel Aviv over blocked aid access at the Rafah border crossing.

A senior admin official earlier told Axios that “The president asked us to look into all options for getting more aid to Gaza and not wait for the Israelis.” Officials have also said the port is expected to take “a number of weeks” to set up. Security inspections of the food, water, and medical supplies will take place in nearby Cyprus.

Tensions between Prime Minister Benjamin Netanyahu and the White House over Gaza policy have continued to be on display, interestingly as also revealed in the below Biden hot mic moment from Thursday night…

President Biden: “I told him, Bibi, and don’t repeat this, but you and I are going to have a ‘come to Jesus’ meeting.”

“I’m on a hot mic here. Good. That’s good.” pic.twitter.com/KCgpbx4awf

— Sawyer Hackett (@SawyerHackett) March 8, 2024

As for the practical reality and difficulties of establishing a port and temporary pier in what is still effectively a war zone, BBC has described the project is to be undertaken by Army engineers and a transport/logistics team out of Virginia:

Gaza has no deep water port and so the US has for weeks been looking at ways to get shiploads of aid in urgently, while the administration has publicly ramped up its pressure and increasingly shown in public its impatience with Israel over the desperate situation on the ground.

US officials told the BBC’s US partner, CBS, that there are plans for the pier to be installed by an army unit called the 7th Transportation Brigade, based at Fort Story, Virginia. The brigade is designed for rapid deployment, but the military ships have not yet left the US, the officials said.

US soldiers are expected to construct the pier and launch it from aboard US Navy vessels offshore. Vice Adm Kevin Donegan, the most senior US Navy commander in the Middle East has said the plan is “absolutely executable” 

However, a senior US official has emphasized, “The current plan doesn’t include any U.S. boots on the ground in Gaza.”

Authored by Lance Roberts via RealInvestmentAdvice.com,

Presidential elections and market corrections have a long history of companionship. Given the rampant rhetoric between the right and left, such is not surprising. Such is particularly the case over the last two Presidential elections, where polarizing candidates trumped policies.

From a portfolio management perspective, we must understand what happens during election years concerning the stock market and investor returns.

Since 1833, the S&P 500 index has gained an average of 10.03% in the year of a presidential election. By contrast, the first and second years following a Presidential election see average gains of 6.15% and 6.94%, respectively. There are notable exceptions to positive election-year returns, such as in 2008, when the S&P 500 sank nearly 37%. (Returns are based on price only and exclude dividends.) However, overall, the win rate of Presidential election years is a very high 76.6%

Since President Roosevelt’s victory in 1944, there have only been two losses during presidential election years: 2000 and 2008. Those two years corresponded with the “Dot.com Crash” and the “Financial Crisis.” On average, the second-best performance years for the S&P 500 are in Presidential election years.

For investors, with a “win ratio” of 76%, the odds are high that markets will most likely finish the 2024 Presidential election year higher. However, given the current economic underpinnings, I would caution completely dismissing the not-so-insignificant 24% chance that a more meaningful correction could reassert itself. Given the recent 15-year duration of the ongoing bull market, the more extreme deviations from long-term means, and ongoing valuation issues, a “Vegas handicapper” might increase those odds a bit.

That deviation is more significant when looking at the 1-year moving average. Current deviation levels from the 52-week moving average have generally preceded short-term market corrections or worse.

However, as stated, while the market will likely end the year higher than where it started, Presidential election years have a correctional bias to them during the summer months.

Will Policies Matter

The short answer is “Yes.” However, not in the short term.

Presidential platforms are primarily “advertising” to get your vote. As such, a politician will promise many things that, in hindsight, rarely get accomplished. Therefore, while there is much debate about whose policies will be better, it doesn’t matter much as both parties have an appetite for “providing bread and games to the masses” through continuing increases in debt.

However, regarding the financial markets, Wall Street tends to abhor change. With the incumbent President, Wall Street understands the “horse the riding.” The risk to elections is a policy change that may undermine current trends. Those policy changes could be an increase in taxes, restrictive trade policies, cuts to spending, etc., which would potentially be unfriendly to financial markets in the short term.

This is why markets tend to correct things before the November elections. A look at all election years since 1960 shows that markets did rise during election years. However, notice that the market tends to correct during September and October.

Notably, that data is heavily skewed by the decline during the 2008 “Financial Crisis,” also a Presidential election year. If we extract that one year, returns jump to 7.7% annually in election years. However, in both cases, returns still slump during September and October. The chart below shows that 2024 is running well ahead of historical norms.

Lastly, while policies matter over a longer-term period, as changes to spending and regulation impact economic outcomes, market performance during SECULAR market periods varies greatly. During secular (long-term) bull markets, as we have now since 2009, Presidential election years tend to average almost 14% annually. That is opposed to secular bear markets, which tend to decline by 7% on average.

However, one risk that has taken shape since the “Financial Crisis” could have an outside effect on the markets in 2024.

The Great Divide

While you may feel strongly about one party or the other regarding politics, it doesn’t matter much regarding your money.

Such is particularly the case today. As we head into November, for the third election in a row, voters will cast ballots for the candidate they dislike less, not whose policies they like more. More importantly, most voters are going to the polls with large amounts of misinformation from social media commentators pushing political agendas.

Notably, the market already understands that with the parties more deeply divided than at any other point in history, the likelihood of any policies getting passed is slim. (2017 was the latest data from a 2019 report. Currently, that gap is even more significant as Social Media continues to fuel the divide.)

The one thing markets do seem to prefer – “political gridlock.”

“A split Congress historically has been better for stocks, which tend to like that one party doesn’t have too much sway. Stocks gained close to 30% in 1985, 2013 and 2019, all under a split Congress, according to LPL Financial. The average S&P 500 gain with a divided Congress was 17.2% while GDP growth averaged 2.8%.” – USA Today

What we can derive from the data is the odds suggest the market will end this year on a positive note. However, such says little about next year. If you go back to our data table above, the 1st year of a new Presidential cycle is roughly a 50/50 outcome. It is also the lowest average return year, going back to 1833.

Furthermore, from the election to 2025, outcomes have been overly dependent on many things continuing to go “right.”

Avoidance of a “double-dip” recession. (Without more Fiscal stimulus, this is a plausible risk.)

The Fed drastically expands monetary policy. (Such won’t come without a recession.)

The consumer will need to expand their current debt-driven consumption. (This is a risk without more fiscal stimulus or sustainable economic growth.)

There is a marked improvement in both corporate earnings and profitability. (This will likely be the case as mass layoffs benefit bottom-line profitability. However, top-line sales remain at risk due to items #1 and #3.)

Multiple expansions continue. (The problem is that a lack of earnings growth in the bottom 490 stocks eventually disappoints)

These risks are all undoubtedly possible.

However, when combined with the longest-running bull market in history, high valuations, and excessive speculation, the risks of something going wrong have risen.

So, how do you position your portfolio for the election?

Portfolio Positioning For An Unknown Election Outcome

Over the last few weeks, we have repeatedly discussed reducing risk, hedging, and rebalancing portfolios. Part of this was undoubtedly due to the exaggerated rise from the November lows and the potential for an unexpected election outcome. As we noted in “Tending The Garden:” 

“Taking these actions has TWO specific benefits depending on what happens in the market next.

If the market corrects, these actions clear out the ‘weeds’ and allow for protection of capital against a subsequent decline.
If the market continues to rally, then the portfolio has been cleaned up, and new positions can be added to participate in the next leg of the advance.

No one knows for sure where markets are headed in the next week, much less the next month, quarter, year, or five years. What we do know is not managing ‘risk’ to hedge against a decline is more detrimental to the achievement of long-term investment goals.”

That advice continues to play well in setting up your portfolio for the election. As outlined, the historical odds suggest that markets will rise regardless of the electoral outcome. However, those are averages. In 2000 and 2008, investors didn’t get the “average.”

Such is why it is always important to prepare for the unexpected. While you certainly wouldn’t speed down a freeway “blindfolded,” it makes little sense not to be prepared for an unexpected outcome.

Holding a little extra cash, increasing positioning in Treasury bonds, and adding some “value” to your portfolio will help reduce the risk of a sharp decline in the months ahead. Once the market signals an “all clear,” you can take “your foot off the brake” and speed to your destination.

Of course, it never hurts to always “wear your seatbelt.”

President Biden was momentarily distracted from delivery of his State of the Union address on Tuesday night, as the father of a Marine killed during the mishandled withdrawal of US forces from Afghanistan yelled from the gallery at the top of his lungs, imploring the audience to remember the bloody bombing that took his son’s life. 

Steven Nikoui shouts at President Biden from the gallery at Thursday’s State of the Union Address (Andrew Harnik/AP via Yahoo News)

As Biden was at a part of the speech where he was daring to claim that Americans are “safer today than when he took office,” 51-year-old Steven Nikoui bellowed “REMEMBER ABBEY GATE! US MARINES!” He was referring to a gate outside Karzai International Airport where a suicide bomber killed 11 Marines, a Navy corpsman and an Army soldier on August 26, 2021 as the airport was mobbed by people trying to flee the country. Among the dead: Nikoui’s son, Lance Corporal Kareem Nikoui, a 22-year-old Californian. 

In a 2022 interview with Fox News, Nikoui condemned “the carelessness of this administration” and said Biden “hasn’t taken any accountability.” He also called for the resignation of Chairman of the Joint Chiefs General Mark Milley. His wife, Shana Chappell, said, “For some reason, [administration officials and generals] want to put the blame on everyone but themselves, but it is actually their fault all of this happened.”   

President Biden was heckled by a Gold Star father during his #SOTU address

Steve Nikoui, the father of Marine Lance Cpl. Kareem Nikoui — 1 of the 13 U.S. service members who was killed during Biden’s botched Afghan exit on August 2021 — yelled “Abbey Gate, Abbey Gate. United… pic.twitter.com/XyeqMwnd3n

— Mona Salama  (@ByMonaSalama) March 8, 2024

After shouting at Biden, Nikoui was cooperative as US Capitol Police officers asked him to leave and escorted him from the chamber. He was handcuffed and arrested on a misdemeanor District of Columbia charge. “Disrupting the Congress and demonstrating in Congressional buildings is illegal,” said Capitol Police in a statement. “This is a routine charge on Capitol Hill. People who illegally demonstrate/disrupt Congress typically are released after they pay a $50 fine, so the misdemeanor charge is resolved without going to court.”

Marine Lance Cpl Kareem Nikoui outside Karzai International Airport 

Nikoui was at the address as a guest of Republican Florida Rep. Brian Mast, whose two legs and a finger were amputated after he stepped on an improvised explosive device in Afghanistan’s Kandahar Valley as he served as a US Army bomb technician supporting a team of Army Rangers.

It’s not clear if he knew of Nikoui’s intention to disrupt Biden’s speech. Earlier in the day, Mast tweeted a photo of himself with Nikoui and wrote, “Joe Biden may try to turn the page on Afghanistan after his incompetence cost American lives, but NOT ON MY WATCH.”

Steve Nikoui, the father of fallen Marine LCpl. Kareem Nikoui, was my guest to #SOTU2024.

He was arrested because he cried out to @JoeBiden to remember his son.

Joe Biden has never honored those killed at the Abby Gate and still hails the catastrophic withdrawal as a success! pic.twitter.com/m8Y0sUPLY6

— Rep. Brian Mast (@RepBrianMast) March 8, 2024