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Nvidia’s GTC is now AI Woodstock. (0:52) The Fed’s new dot plot will take center stage. (1:37) Reddit is about to start trading. (2:24)
The following is an abridged transcript:
The most noteworthy news this week
Loki and Apollo. Napoleon and Wellington. Batman and the Joker. You can be on one side of this powerful currency pair that’s set to shake up markets this week: the Federal Reserve or Nvidia (NASDAQ: NVDA).
Artificial intelligence has outperformed interest rates in the stock market so far, driving stocks to record highs despite cash returns not seen in more than 15 years.
This week we’re hosting Nvidia’s GPU technology conference, which most people call GTC and Wall Street calls it AI Woodstock. The Federal Open Market Committee will make a decision on Wednesday.
Wedbush said that chronologically, GTC attendees will be seeking comments on the need for liquid cooling in powerful architectures, and that “one of the difficulties in liquid cooling gaining traction is the lack of standard implementation.”
From a stock perspective, Livy Investment Research, head of investment group, said that “Nvidia is currently trading at exactly where it should be based on historical observations” and “it expects momentum to gradually pick up post-GTC and more significantly towards 2025.” first quarter of 2020″ period and following the release of the above earnings. “
But if Nvidia is Yul Brenner’s Chris, leading the Magnificent 7 in an impossible situation, then the Fed is Eli Wallach’s Calvera , a nemesis ready to drive down high valuations with a longer, higher blow to stock enthusiasm.
The Fed’s decision is a fait accompli and traders’ pricing will almost certainly change. But attention has turned to the summary of economic forecasts, also known as dot plots, to see whether the Federal Open Market Committee was spooked by the latest hot inflation data.
Carol Schleif, chief investment officer at BMO Family Office, said: “A rate cut could come as early as June, but if the data continues to be as hot as recent data, we would not be surprised to delay it until later in the year.”
Economists at Wells Fargo said, “Underneath the strong headline data, we see increasing evidence that the labor market is cooling and inflation remains on trend.”
They “expect a total of 100 basis points of accommodation this year and an additional 100 basis points of accommodation during 2025 to bring the federal funds target range to 3.25%-3.50% by the end of 2025.”
Reddit (RDDT) headlines the IPO calendar with its highly anticipated debut. The social media company expects to issue 22 million shares at a price of $31 to $34 per share, raising up to $748 million in the deal.
SA analyst Mountainside Research is skeptical. “There are concerns about their lack of profitability, reliance on advertising (and) their optimistic valuation,” they said, adding, “Based on the market’s recent reaction to other IPOs, Reddit may have a rocky start.”
Looking to profit
It’s the end of the week. Nike (NKE) and FedEx (FDX) report on Thursday.
Seeking Alpha analyst Bela Lakos said that from a valuation perspective, Nike has “little upside potential at current levels and a “challenging macroeconomic environment, including the Red Sea conflict and its The impact on traffic in the Suez Canal could have a meaningful impact on Nike. impact on upcoming results. “
Hedgeye last week made a long-term bullish call on FedEx, saying it “will ride the wave of demand and pricing, although there are some potential lag issues with surcharges.”
Analsyt Jay Van Sciver said: “We expect FY3Q results later this month to be the worst yet, with management teams likely looking for good news in the spring to talk about improving industry trends. Will FDX miss March 21? Yes, “We didn’t see anything meaningful though. Will the stock go up the next day? This is a risky business. “
Other upcoming earnings releases include Tencent Music on Tuesday, Micron Technology (MU), Signet Jewelers (SIG), General Mills (GIS) and Five Below (FIVE) on Wednesday. Lululemon (LULU) and Darden Restaurants (DRI) are also open Thursday.
One of the top stories of the weekend
Federal officials launched an investigation into Meta Platform (META) amid concerns that its social media platform was profiting from illegal drug sales. According to the Wall Street Journal.
U.S. attorneys in Virginia have been issuing subpoenas and seeking responses from the tech giant, owner of Instagram and Facebook, as part of a criminal grand jury investigation. Officials are investigating whether the company’s social media platform facilitated and profited from illegal drug trafficking. The FDA is also assisting with the investigation.
Tesla ( TSLA ) plans to raise the price of its Model Y midsize electric SUV in the United States and several European countries.
The company said that starting April 1, the price of all Model Y vehicles in the United States will increase by $1,000. Tesla (TSLA) later said that on March 22, Model Y prices in multiple European countries will increase by approximately 2,000 euros or the equivalent in local currencies. Tesla stock, weighed down by recent price cuts, is one of the S&P’s worst performers so far this year.
For income investors
Here are some companies going ex-dividend next week:
Kohl’s (KSS) has an ex-dividend date of March 19th and a dividend payment date of April 3rd. Best Buy’s (BBY) ex-dividend date is March 20 and its dividend payment date is April 11. Broadcom’s (AVGO) ex-dividend date is April 11. The same is true for March 20, and the dividend payment date is March 29. Phillip Morris (PM) has an ex-dividend date of March 20 and a dividend payment date of April 9.
Study Corner on Wall Street
Analysts at BofA Securities have released their small-cap quant industry rankings.
Analysts rank the sectors based on estimate revisions, relative valuation compared to history, price momentum, and rating changes to gauge investor sentiment.
“We find that the net ratio of upgrades/downgrades to our analyst ratings on a sector is positively related to subsequent returns, especially in the short term,” the analysts said.
Financials (PSCF) ranked No. 1 and Consumer Discretionary (PSCD) ranked No. 2, up from No. 4 in January. Consumer Discretionary (PSCD), Real Estate and Materials (PSCM) saw the largest improvements in ranking, rising from fourth to second, from sixth to fourth, and from seventh to fifth respectively.
Communications Services (PSCU) suffered the most serious deterioration, falling from second to sixth place. Utilities again ranked number one.
Happy St. Patrick’s Day to our listeners. As the venerable Art Cashen said: Watch out for the canary in the coal mine.
