Wednesday's January employment report at 8:30am creates unusual dynamics with its mid-week timing, compressing the window between labor market data and Friday's CPI release. Nonfarm payrolls, unemployment rate, and average hourly earnings will be analyzed for evidence of labor market cooling or resilience that could influence the incoming Fed chair's policy inheritance. The wage growth component takes on heightened importance given recent inflation stickiness, with strong wage gains potentially validating c ...

Core Viewpoint - Big Tech companies have experienced a significant decline in market capitalization, losing over $1 trillion due to concerns over AI spending and capital expenditures [1]. Group 1: Market Performance - Microsoft, Nvidia, Oracle, Meta, Amazon, and Alphabet all saw their shares decline in the week leading up to Thursday's market close, driven by fears surrounding AI spending [1]. - Amazon's shares fell by 7% in premarket trading on Friday, while Alphabet decreased by 0.7%, and Meta remained largely unchanged; Oracle, Nvidia, and Microsoft saw slight increases in the low single-digit percentages [2]. Group 2: Capital Expenditure Plans - Big Tech companies announced plans to invest $660 billion into AI this year, a figure that exceeds the GDP of several countries, including the United Arab Emirates, Singapore, and Israel [2]. Group 3: Industry Sentiment and Volatility - Companies developing hardware for AI are expected to face ongoing volatility as market sentiment shifts, with concerns about capital expenditures related to large language model (LLM) build-outs and the potential for over-expansion of capacity [3]. - Investment director Paul Markham highlighted that questions regarding the extent of capital expenditures and the eventual return on investment will persist in the industry [3].

Amazon reports Q4 earnings Thursday, capping a tech earnings season dominated by a single question: whether the industry's AI spending binge will ultimately be worth it. ...

US weekly initial unemployment claims fell -1,000 to 209,000, showing a slightly weaker labor market than expectations of 205,000. However, continuing claims fell -38,000 to a 6-month low of 1.827 million, showing a stronger labor market than expectations of 1.850 million.WTI crude oil (CLH26) prices jumped more than +3% to a 4.25-month high on Thursday to lift energy producers after President Trump on Wednesday said that he wants Iran to come to the table and negotiate a nuclear deal that is “a fair and eq ...

Market Overview - The stock market experienced volatility due to President Trump's tariff threats against eight European countries, leading to the S&P 500 and Nasdaq's worst performance since October [1] - Following Trump's announcement of a framework for a future deal regarding Greenland, both indices rebounded, but ended the holiday-shortened week down 0.4% and 0.1% respectively [1] Earnings Reports - Procter & Gamble reported mixed results, beating earnings expectations but missing revenue targets, attributed to the impact of the government shutdown [1] - Capital One also delivered mixed results, beating sales expectations but missing on earnings due to higher expenses; the company remains optimistic about long-term growth following recent acquisitions [1] Investment Actions - The company bought shares of Alphabet after a dip, which ended the week down 0.6% [1] - Profits were taken on Dover as it reached an all-time high, realizing a 13% gain on shares bought in May 2024 [1] - Qnity Electronics was trimmed after a significant year-to-date increase of 17.7%, reflecting a cautious approach despite positive outlooks [1]

Market Overview - Market indexes experienced a reversal, initially up 1-2% but later down 1-2% due to reconsideration of positive economic metrics and labor market data [1][2] - The Dow dropped 2400 points, S&P 500 down 310 points, Nasdaq down 1325 points, and small-cap Russell down 145 points since November 12 [2] Earnings Reports - The Gap (GAP) reported its seventh consecutive quarter of revenue growth with earnings of 62 cents per share, beating consensus by 4 cents, and revenues of $3.9 billion meeting expectations; comps increased by 5% despite Athleta's -11% year-over-year growth [3] - Ross Stores (ROST) exceeded expectations with earnings of $1.58 per share, surpassing the consensus of $1.40, and revenues of $5.6 billion exceeding the forecast of $5.4 billion; next-quarter earnings guidance was raised [4] - Intuit (INTU) reported earnings of $3.34 per share, above the $3.10 consensus, with revenues of $3.89 billion beating the expected $3.76 billion; next-quarter revenue guidance was raised, but earnings guidance for fiscal Q2 was lowered [5]

Summary of Nvidia Corp. (NVDA) Conference Call Company Overview - **Company**: Nvidia Corp. (NVDA) - **Industry**: Semiconductors, specifically focusing on AI and data center solutions Key Financial Results - **Revenue**: Reported revenue of $57.0 billion, exceeding Goldman Sachs (GS) estimate of $55.6 billion and Street estimate of $55.4 billion [2] - **Gross Margin**: 73.6%, slightly below GS at 73.5% and above Street at 73.7% [2] - **Operating Margin**: 66.2%, just above GS at 65.9% and Street at 66.0% [2] - **Operating EPS**: $1.30, above GS at $1.28 and Street at $1.26 [2] - **Data Center Revenue**: $51.2 billion, significantly above GS at $49.4 billion and Street at $49.7 billion [2] - **Gaming Revenue**: $4.3 billion, below GS at $4.7 billion but above Street at $4.5 billion [2] - **Professional Visualization Revenue**: $760 million, far exceeding GS at $643 million and Street at $619 million [2] - **Automotive Revenue**: $592 million, below GS at $620 million and Street at $633 million [2] Guidance and Future Outlook - **4Q Revenue Guidance**: Midpoint guidance of $65.0 billion, well above GS at $63.2 billion and Street at $62.4 billion [3] - **Gross Margin Guidance**: Non-GAAP gross margin expected at 75.0%, above GS at 74.4% and Street at 74.5% [3] - **Operating Expenses**: Guided to $5.0 billion, with operating income and expenses expected to remain stable [3] - **Implied Non-GAAP EPS**: Expected at $1.50, above GS at $1.49 and Street at $1.44 [3] Market Sentiment and Stock Performance - **Stock Performance**: Anticipated to trade higher following strong quarterly results and guidance, despite a ~6% pullback prior to the earnings report [1] - **Investor Focus Areas**: Key areas of interest include details on the $500 billion Datacenter revenue forecast, visibility into OpenAI deployments, and the timing of the Rubin product launch in 2026 [1] Industry Implications - **AI Spending Environment**: The guidance for the Data Center segment indicates a robust AI spending environment, positively impacting digital semiconductor companies such as Broadcom and AMD, and to a lesser extent, Marvell and ARM [4] Price Target and Risks - **Price Target**: 12-month price target set at $240, based on a 35X P/E multiple applied to a normalized EPS estimate of $6.85 [4] - **Key Risks**: Potential risks include a slowdown in AI infrastructure spending, increased competitive intensity, margin erosion, and supply constraints [7] Conclusion - Nvidia Corp. has demonstrated strong financial performance with significant revenue growth, particularly in the Data Center segment, and has provided optimistic guidance for the upcoming quarter. The company is well-positioned in the AI and semiconductor markets, although it faces potential risks from competition and market dynamics.

Federal Reserve Insights - The Federal Reserve is currently experiencing a divided stance among its officials regarding interest rate decisions, with some advocating for rate cuts while others remain cautious [2][11][12] - Recent data indicates a labor market that is gradually weakening, with inflation running above the 2% target, estimated at around 3% [4][10] Investor Concerns - Investors are facing a "wall of worry" due to three main factors: concerns over AI spending following recent Meta results, uncertainty about the pace of rate cuts, and the worst employment market data in 22 years [6][17] - There is a need for catalysts such as government reopening for economic data clarity and upcoming earnings reports from tech companies like Nvidia to potentially revive market sentiment [7][10] Economic Outlook - The economy is showing signs of slowing, particularly in the employment sector, which may lead to three additional rate cuts over the next 12 months [9][11][16] - Consumer companies are reporting weak earnings, particularly among lower-end consumers, while the higher-end segment is performing better, indicating a narrow market performance [17] Earnings Performance - Third-quarter earnings are reported to be up by 10% year-over-year, providing a positive note amidst concerns about the overall economic outlook [18]

分组1 - The Federal Reserve is experiencing internal divisions, leading to differing views on monetary policy and the potential for rate cuts in December [2][8][17] - Jay Powell, the Fed Chair, indicated that a December rate cut is not guaranteed, reflecting uncertainty in the labor market and inflation levels [5][6][11] - The labor market is showing signs of cooling, but inflation remains elevated at around 3%, complicating the Fed's decision-making process [3][6][12] 分组2 - Meta's recent bond sale of $30 billion received a record $125 billion in orders, indicating strong demand despite concerns over its spending pace [25][26] - The high yield market has slowed down significantly, with only $18 billion priced this month, the lowest since April, amidst emerging credit concerns [27][28] - Credit investors are cautious about the potential risks associated with large capital expenditures, particularly in the context of economic uncertainty [36][41]

Market Overview - The Dow is currently up by 200 points, with significant contributions from Goldman Sachs, Caterpillar, and Sherwin Williams, which together add 193 points to the index [1] Company Performance - Facebook has guided for a 25% year-over-year advertising growth and has exceeded expectations in all metrics except for a one-time tax bill [2] - Google has reported strong performance across all business units, indicating effective AI spending, with current spending levels at 60-70% relative to GDP compared to the internet buildout in the 1990s, suggesting further growth potential [3] - Microsoft is experiencing a decline of $11, but there is speculation about a potential recovery by the end of the day [3][4] Investment Sentiment - There is a prevailing market sentiment favoring buybacks and dividends over long-term investments, indicating a preference for immediate returns [2] - Despite recent selloffs, there is optimism about Meta's potential, especially given its substantial business growth over recent quarters [4][5]