Nvidia Once Again Takes Center Stage - It's that time of the reporting season again, when all eyes turn to Nvidia, which reports after the close on Wednesday. While most investors look for clues about the state of the AI capex cycle, it's equally important to pay attention to commentary around China. In recent quarters, Nvidia has been transparent about the dollar value of missed sales due to restrictions. The 15% sales commission effectively imposed by the U.S. government on Chinese sales will … View More
Strong Showing For Q2 After Lowered Expectations: Despite the lower expectations, Q2 is shaping up to exceed even the pre-liberation day growth expectations, with growth coming in at more than double the initial expectations of 12.9%. The spotlight remains on the most prominent companies, but we have seen strong performance. 9 of 11 GICS sectors exceeded July 1st expectations, and 8 out of 11 exceeded April 1st expectations. Second-quarter EPS currently stands at $66.84, more than $1.30 above w… View More
Summary After reaching new record highs, stocks fell last week (S&P 500 -2.34%). Breadth was notably negative as equal-weighted averages underperformed cap-weighted averages. The pullback related to growth concerns following a disappointing July non-farm payrolls report and sharp downward revisions to prior months. Advancing sectors were utilities (1.56%) and communication services (0.01%); biggest decliners were materials (-5.40%) and consumer discretionary (-4.54%). Key Takeaways … View More
With another week’s worth of data in the books, the U.S. economy looks ok. Inflation is not a problem. We continue to believe that any (eventual) inflation pop due to tariffs should be “transitory” with monetary policy restrictive. The consumer still has some momentum. Yes, there are some impaired U.S. sectors (eg, housing), but this is not new news. Manufacturing – which has been weak – may be starting to recover for the first time in over two years. There have been considerable shoc… View More
Each year, the Per Jacobsson Foundation hosts and publishes a lecture on Monetary Policy. In 1979, Arthur Burns—then the Chair of the Federal Reserve—delivered a lecture in Belgrade titled “The Anguish of Central Banking.” In it, he reflected candidly on the challenges the Fed faced during the inflationary 1970s. Burns noted that, in practice, monetary policy often had to adjust to fiscal decisions made by elected officials. When the government expanded benefits or spending, the expecta… View More