NVDA Lifts All

The S&P 500 drifted lower to begin last week before Nvidia’s blowout earnings report sent tech stocks surging and the overall markets back higher. The semiconductor company, whose chips are leading the AI arms race, reported material revenue and earnings upsides again and eclipsed $2 trillion in market value. NVDA’s hosts a GTC on March 18, where the company has historically announced their next-gen datacenter products. NVDA over the last fiscal year has seen its stock price increase nearly 200% while seeing its earnings increase more than 580%.

Fun historic stats from the team at JP Morgan: on average, whenever the S&P 500 makes at least one all-time high in a year, it makes 28 of them. NVDA’s gains powered the NASDAQ 100 to a +3% daily gain and a new all-time high. Last week was the first time since March 2000 that the NASDAQ 100 rallied at least 3% to make a new all-time high.  While stock bears may be inclined to use this as a sign of an imminent top given that’s what March 2000 was, as the chart below shows, this was a regular occurrence during the late 1990s.  If you had sold the first time the NASDAQ 100 did this, you would have missed out on nearly 400% of gains before the eventual top.  No guarantees of course.

On the macro front, the two most critical prints this week are the PCE numbers on Thursday and ISM manufacturing data on Friday. The ISM manufacturing has lagged the PMI and ISM. A number above 50 would boost the growth story but could potentially revive inflation fears at the Federal Reserve and raise interest rates.

Earnings season is largely now behind us. With 80% of SPX reporting, we have seen revenue growth of 4% YoY and earnings growth of 7% YoY. Revenue has surprised expectations by 1% and earnings have surprised by 8%. The weak areas in the markets are the commodity-related sectors and Healthcare.  The strongest areas were technology and communications.

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No Oak Harvest Weekly Stock Talk: Took the Week off for Earnings

WEEK ENDING 2/23/2024