Wall Strut
Last week on Wall Street, the keenly awaited US personal consumption expenditures (PCE) price index increased 0.3% in April, matching the previous month’s figure, while on an annual basis inflation rose 2.7%.
The S&P500 ended higher on Friday. The tech-heavy Nasdaq ended same-same.
The Dow Jones Industrial Average surged some 570 points, led by big numbers for Salesforce (SFH) and UnitedHealth (UNTH), to clock its biggest daily gain since way back in Novemberland, possibly thanks to some anxious fundie-end-of-month repositioning led stocks higher.
Overall US stocks might’ve floundered across the week, but what a May it was: the S&P500 added circa 4.8%, the Dow climbed 2.4% and the tech-heavy Nasdaq danced upwards to the tune of 7%.
Investors were assessing the potential timing of Federal Reserve rate cuts, especially after PCE inflation figures aligned with expectations. In the corporate side, Salesforce rebounded 7.5% after a 20% drop the previous day due to missed revenue and sales growth targets, significantly boosting the Dow.
Gap went nuts adding 28.5% after its Q1 earnings beat estimates, and Nordstrom added 5% following decent quarterly sales data.
On the other side of the ledger and despite logging strong earnings, Dell Tech crashed with traders leaping ship for sounder AI sailing after the firm revealed much lower-than-expected AI server backlog.
Those Dell Computer shares really know how to fall when the time arrives.
The once super-dooper company forecast current-quarter profit below market forecasts. And then told everyone it’s under margin pressure because of higher costs and the need to build servers to meet heavy AI workloads.
Data centres and servers. Watch this space. Or go and buy some.
As per usual, Nvidia is doing stuff. Have I mentioned shares of Nvidia are up more than 120% year-to-date, even as its ilk among high-tech society try to find a way to make good in generative AI just like Jensen H and co.
Investors this week will be studying Nvidia (NVDA) just ahead of the 10-for-1 stock split that becomes effective after the close on Friday.
OPEC+ members agreed to extend deep output cuts well into next year as the group seeks to shore up the market amid soft global demand and rising US production.
Memetime in meme world
It’s probably on again, this Meme Stock business, as evidenced by another GameStop-Keith Gill-love-in over the weekend.
Gill, aka Roaring Kitty, aka DeepF (rude word which starts with the letter f and features other letters like k a u and a c) Value is the chap who inspired 2021′s epic short squeeze and subsequent Paul Dano fillum.
Anyhoo, Gill dropped his pants on Reddit’s ahem Superstonk group, suggesting he’s sitting on a MASSIVE huge position in the video game retailer.
This is a purified screenshot of his screenshot of what might be his portfolio (who knows) …holding quite the significant hunk of GameStop common shares and call options.
Screenshot via Reddit
As one notes, the possibly (not even that deep) fake shows a STACK (5 million) shares stonked up at US$21.27 a pop. That’s worth $115.7 million as of Friday’s closing price, according to the pic above.
GME’s been doing well lately, but the future’s a riddle. As ever.
Gill’s screenshot also showed a position of 120,000 call options with a strike price of $20 that expires on June 21st – they were bought for about US$5.68 each.
The move certainly had the right effect.
GameStop shares closed Friday at $23.14 and then leapt circa 18% to $27.58 in Sunday trading on trading app Robinhood:
Screenshot via Robinhood
But wait, then we got this this morning in US world time…
— Roaring Kitty (@TheRoaringKitty) June 3, 2024
It’s UNO. The significance is not lost on me, nor the symbolism. But it strikes a little childish and ho-hum.
Dumb A.I. News
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Generative AI is making its debut at the Tribeca Festival!
Yes, the very New York film festival founded by public scallywag and occasional actor Robert de Niro.
Leaning on OpenAI, this year’s Tribeca is set to premiere “Sora Shorts,” no less than five short films created using AI.
That’ll happen in a few weeks on June 15.
The films were reportedly made using OpenAI’s text-to-video tool, Sora. So there you go.
Rubin – not Reuben – but smart all the same
Nvidia CEO Jensen Huang revealed the monster company’s newest AI platform, at a big AI-down in Taipei on Sunday.
The new chip model is called “Rubin” and it comes less than three months after Nvidia unveiled its predecessor, the Blackwell chip. Nvidia had announced its “Blackwell” chips in March.
Huang said Sunday that Nvidia plans to release new AI chip models on a “one-year rhythm.”
Nvidia’s added circa US$350bln since its mega Q1.
Despite a slight dip at the end of the week, its valuation clocked almost $2.7 trillion.
Advanced Micro Devices
Then just when we thought the day couldn’t get more artificially intelligent, Advanced Micro Devices (AMD) announces at Computex 2024 in Taipei, its next-gen of Ryzen laptop processors for generative AI stuff.
It’s called the Ryzen AI 300 Series. It’s a re-brand of its top-tier Ryzen 9 chips.
The new naming convention still includes the HX suffix AMD introduced in 2022, but it doesn’t indicate how many watts of power the chip draws. Instead, HX will simply refer to “top of stack” or the best and fastest Ryzen AI 300 chip.
Here’s some tech deets from the release:
The new Ryzen AI chips are built on AMD’s latest architectures for neural, integrated graphics, and general processing: XDNA2 for the NPU, RDNA 3.5 for the iGPU, which now has up to 16 compute units, and Zen 5 for the CPU. The first two processors in this series are the Ryzen AI 9 HX 370 and Ryzen AI 9 365. Both have 50 TOPS NPU, but the HX variant is the higher-end of the two.
Yay.
Elon Watch
Civilization is careening towards dystopia/utopia
— Elon Musk (@elonmusk) June 3, 2024
With that latest and wonderfully encouraging missive from the X-owning X-er, we turn with some pleasure to the looming civil battle between Tesla’s institutional investors and Elon et al.
The two sworn roaming gangs of frenemies will get a chance to go toe-to-toe at Tesla’s annual shareholder meeting on June 13.
The big issue: Elon’s pay packet. It’s about US$55bn.
That also seemed grossly oversized to the judge in Delaware who struck down the plan earlier this year at the behest of unhappy TSLA investors.
As the showdown AGM looms, some of the bigger investment firms have urged TSLA shareholders to vote against Elon and his bags of money.
Those bags are due to Elon’s cunning plan from circa 2018, when he linked his remuneration to Tesla goals.
A bunch of stock options (12 tranches of) got vested if Tesla hit wildly ambitious targets.
When that happened Elon got 12x stock equal to 1% of outstanding shares at the time of the grant.
Tesla said it hit all of the 12 targets as of 2023. So it’s Elon, his board of goons. And then, there’s always top acolyte, Cathie Wood.
— Elon Musk (@elonmusk) May 31, 2024
US Earnings
Gitlab (GTLB) will report on Monday. Investors are waiting to see how the company will perform because some in the enterprise software sector see issues with sales.
Tuesday will bring quarterly results from CrowdStrike.
The company’s stock has continued to outperform, driven by its lightweight-agent architecture and cloud-native approach. Wall Street is highly optimistic heading into CrowdStrike’s Q1 earnings, leaving little room for error.
Right up until this week, Wall Street analysts have remained super optimistic out front of CrowdStrike’s Q1, leaving little room for disappointment.
CRWD on the highly expensive side of valuation which will be weighing on management which really must deliver another decent beat.
Monday
GitLab (GTLB) and Science Applications (SAIC).
Tuesday
CrowdStrike (CRWD), PVH (PVH), Hewlett Packard Enterprise (HPE), and Bath & Body Works (BBWI).
Wednesday
Lululemon (LULU), Dollar Tree (DLTR), Brown-Forman (BF.A), Campbell Soup (CPB), and Five Below (FIVE).
Thursday
Samsara (IOT), DocuSign (DOCU), J.M. Smucker (SJM), and NIO (NIO).
The Economic Calendar
Monday June 3 – Friday June 7
MONDAY
JN Company Profits, Q1
CH Trade Balance, May
Worldwide Manufacturing PMIs, incl. global PMI (May)
Indonesia Inflation (May)
Turkey Inflation (May)
United States ISM Manufacturing PMI (May)
TUESDAY
ASEAN Manufacturing PMI (May)
South Korea Inflation (May)
Switzerland Inflation (May)
United States Factory Orders (Apr)
WEDNESDAY
Worldwide Services, Composite PMIs, inc. global PMI (May)
South Korea GDP (Q1, final)
France Industrial Production (Apr)
Brazil Industrial Production (Apr)
United States ADP Employment Change (May)
Canada BoC Interest Rate Decision
United States ISM Services PMI (May)
THURSDAY
Australia Trade (Apr)
Switzerland Unemployment Rate (May)
Germany Factory Orders (Apr)
Taiwan Inflation (May)
Eurozone Retail Sales (Apr)
Eurozone ECB Interest Rate Decision
Eurozone Construction PMI (May)
United Kingdom Construction PMI (May)
United States Balance of Trade (Apr)
United States Initial Jobless Claims
Global Sector PMI (May)
FRIDAY
China (Mainland) Trade (May)
India RBI Interest Rate Decision
Germany Trade and Industrial Production (Apr)
United Kingdom Halifax House Price Index (May)
France Balance of Trade (Apr)
Eurozone Employment Change (Q1, final)
Eurozone GDP (Q1, 3rd est.)
Mexico Inflation (May)
Canada Trade (Apr)
Canada Unemployment Rate (May)
United States Non-farm Payrolls, Unemployment Rate,
Average Hourly Earnings (May)
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