Gibbens: NVDA "Pretty Cheap," 20% AVGO Rally Possible as SPX Nears 7,000

Market Outlook - The S&P 500 is close to record highs, with only 1% to 3% away from previous peaks, despite various challenges faced throughout the year [1] - There is optimism for the S&P 500 to reach 7,000, supported by expected Fed rate cuts and a growing economy at 3% [2] - A typical year shows a 75% chance for a "Santa Claus rally," which is anticipated this year due to strong market fundamentals [3] Economic and Monetary Policy - Solid earnings growth and a well-performing economy are key factors driving market optimism [4] - The Federal Reserve is not only lowering rates but also buying securities, increasing market liquidity and encouraging risk-taking in assets [4] Investment Opportunities in Technology - There are opportunities to buy dips in quality tech companies, with Nvidia down approximately 12% and Broadcom down about 20% from their highs [5][8] - Nvidia is trading at about 26 times earnings, which is considered cheap historically, and is expected to benefit from strong global demand and potential sales to China [12][13] - Broadcom is also viewed positively, with expectations of a potential 20% upside as it recovers to its all-time high [10] Financial Sector Insights - Expectations for 2 to 4 Fed rate cuts next year could benefit financial institutions, particularly JP Morgan, which is positioned to gain from the widening spread between short and long-term rates [14][15] - The anticipated increase in IPOs and M&A activity is expected to further benefit large money center banks like JP Morgan [15][16] Other Investment Sectors - There is a significant position in gold, which is expected to perform well in an environment of rate cuts and easy monetary policy [17][18]