Global equities have rebounded with fair bit of gusto over the last few weeks \u2013 give or take an impatient stumble \u2013 and once again, it\u2019s been all about Wall Street\u2019s Mega Tech bovine squad.<\/p>\n
The FANG+ Index has run away with itself, jumping almost +18% in about 12 or so sessions of trade, ending the Friday session in New York at shiny, new all-time highs.<\/p>\n
Not everyone feels the same outsized conviction for the rest of the market, with US indices closing mixed on Friday.<\/p>\n
Nevertheless, after not knowing which way to run, the Dow Jones Industrial Average eventually closed with its nose inside positive territory, adding 1.8 points, or +0.01%.<\/p>\n
The S&P 500 index crept ahead some 5.8 points, or +0.13% to close at 4,514, while the Nasdaq Composite Index found 11.8 points or +0.08%, to end the session at 14,125.5<\/p>\n
Following the upward hoopla of an inflation free future last week, all three major US averages clocked a third straight weekly gain \u2013 the Nasdaq surged again, up +2.4% for the week. The S&P 500 added +2.2%, while the the Dow ended the week with a +1.9% rise.<\/p>\n
Both the Dow and S&P 500 logged their first three-week win streak since July. And it was the Nasdaq\u2019s first three-week streak since June.<\/p>\n
For now at least, it seems \u201cBig Tech\u201d is bringing back the bulls<\/strong><\/em><\/p>\n However, 2023 has only been about a handful of stocks, the \u201cMagnificent Seven\u201d, with 50% of the S&P500 struggling to stay in positive territory in a year where the S&P500 index is up a healthy +17.6%.<\/p>\n Year-to-date: NVIDIA (NVDA) +240%, Meta Platforms (META) +178%, Tesla (TSLA) 90%, Amazon (AMZN) +73%, both Netflix (NFLX) and Microsoft (MSFT US) +57%, and Mama Alphabet (GOOGL) +54%.<\/p>\n Father Christmas will be in New York<\/strong><\/em><\/p>\n On the Santa rally, its chalk and chedder between us and the States.<\/p>\n Looking at the seasonality picture for US stocks over the last decade, it\u2019s way different to that of the benchmark ASX200.<\/p>\n The S&P500 has stormed it home nine out of the last 10-years through November with an average win of +3.2%; conversely, the ASX200 has fallen 50% of the time with an average increase of a meagre +1.1%.<\/p>\n Alibaba is dipping, not everyone\u2019s buying<\/strong><\/em><\/p>\n And finally, it\u2019s not all<\/em> good news for the tech megafauna.<\/p>\n The market cap of Chinese e-commerce giant Alibaba is about 10% down what it was on Thursday morning, before Jack Ma\u2019s former tech giant walked back on its headline move back in May to cut itself into six easy pieces and spin off its cloud computing business for listing on the NYSE.<\/p>\n In the States, investors voted with their feet, however Wall Street\u2019s analysts are less convinced either way.<\/p>\n Morgan Stanley immediately dropped Alibaba as its top pick in the internet sector, saying the move was for all sorts of reasons, but apparently\u00a0 the final straw was Thursday\u2019s \u201cnegative surprise\u201d on the potential IPO.<\/p>\n A little keener to buy the dip is Barclays, which said killing the spin-off and list plan for the cloud business was the \u201cright decision\u201d given the IPO climate and all the regulatory hurdles.<\/p>\n Barclays remains a fan of BABA\u2019s gung-ho share repurchasing \u2013\u00a0 US$3bn in four months \u2013 reiterating its Overweight rating and US$138 price target on the stock, adding that the new focus on dividends and buybacks was welcome and can make BABA stock an attractive long-term option.<\/p>\n \u00a0<\/p>\n Elon is in terrible trouble with the mouse and a bunch of other key X advertisers.<\/p>\n Disney is no longer advertising on X, the Elon toy formerly known as Twitter. <\/p>\n Disney\u2019s decision follows an effectively damning report by the watchdog group Media Matters, which alleged that ads for brands like Apple, Bravo, and Amazon had appeared on X next to white nationalist hashtags such as #WLM (White Lives Matter) or #KeepEuropeWhite.<\/p>\n Following this splash, many of the megatron X advertisers \u2013 like Messrs Apple, Comcast\/NBC Universal, and IBM \u2013 up and cut the cord with Elon\u2019s once-was US$49bn platform.<\/p>\n In a statement, IBM said\u00a0 something like \u2018we have zero tolerance for hate speech and discrimination\u2026 we just hate it\u2019.<\/p>\n The split second court opens on Monday, X Corp will be filing a thermonuclear lawsuit against Media Matters and ALL those who colluded in this fraudulent attack on our company pic.twitter.com\/55vl7PspaQ<\/a><\/p>\n \u2014 Elon Musk (@elonmusk) November 18, 2023<\/a><\/p>\n \n\u00a0<\/p>\n Wall Street is closed on Thursday and shutters early on Black Friday for the mystery that is Thanksgiving.<\/p>\n There\u2019s heaps of time, however, to do some damage, what with Nvidia dropping earnings on Tuesday and the Federal Open Market Committee releases its latest meeting minutes on the Wednesday.<\/p>\n Trading on the Nasdaq and New York Stock Exchange will end at 1pm in New York on Friday \u2013 to allow for an exodus to the various places Americans go for said vacation.<\/p>\n Inside this holiday-shortened week will be a mini-storm of earnings reports just before Thanksgiving.<\/p>\n The headliner sans doubt will be Nvidia (NVDA), which has been on an AI-fuelled rampage for much of the year, so let\u2019s pause there for a moment. Nvidia will report Q3 earnings on Tuesday November 21 and the expectations are almost universally high.<\/p>\n The most recently minted 1 trillion dollar tech giant is expected to announce Q3 revenue of US$15.99bn and earnings per share (EPS) of US$3.37.<\/p>\n The Gatsby of AI\u00a0\u00a0<\/strong><\/em><\/p>\n Nvidia is the standout performer of 2023, here, there or everywhere.<\/p>\n NVDA has by a long measure, been the best performing stock in both the Nasdaq 100 and S&P 500 indices in 2023, with its price enjoying a massive rally on the back of the Artificial Intelligence (AI) mania.<\/p>\n The emergent chipmaker\u2019s stock has way more than tripled since New Year, trading on the edge of another record high ahead of the earnings drop.<\/p>\n In its 2x previous quarterly reports, Nvidia whacked expectations out of the park,, sending the broader stock market into overdrive and solidifying that AI is the next big growth lever within the tech sector. Besides strong fundamentals, the firm provided rosy guidance for the upcoming quarters as the demand for advanced GPUs is forecast to keep growing.<\/p>\n Considering that the majority of AI and cloud projects are powered by Nvidia\u2019s advanced chips, the firm\u2019s financial figures are likely to be perceived as a proxy for the health of the tech sector moving forward. This week, the firm reported that its latest GPU H200 will be available in the second quarter of 2024, which is mainly designed to power AI systems as interest in the sector has surged globally.<\/p>\n Risks, what risks?<\/strong><\/p>\n Of course, Nvidia is also facing some downside risks and remains under pressure to deliver solid results to justify its outperformance. Firstly, up until now, markets seem to be solely focused on the demand side of the GPU market, neglecting whether Nvidia has the capacity to keep meeting the constantly increasing demand.<\/p>\n If this adverse scenario materialises, many tech giants might quickly turn to Nvidia\u2019s competitors that are waiting around the corner to steal market share. Moreover, to reduce their reliance on Nvidia many big-tech companies have already started in-house development of chips, but they are still in embryonic stages.<\/p>\n Finally, the leading chipmaker is also caught in the US-China crossfire as the Biden administration has imposed hard restrictions to prevent Chinese access to advanced semiconductors.<\/p>\n Fabulous fundamentals<\/strong><\/p>\n Strong financial performance is expected for Nvidia as more and more tech firms that have entered the AI race are in need of its advanced chips to cope up with competition.<\/p>\n The semiconductor designer is expected to post revenue of $16.12 billion for the third quarter of 2023 according to consensus estimates by Refinitiv IBES, which would represent a massive year-on-year growth of 171.8%. Additionally, earnings per share (EPS) are estimated at $3.36, marking a huge 479.3% increase on an annual basis.<\/p>\n Valuation corrects but markets seem unimpressed<\/strong><\/p>\n Nvidia had worn the crown of the most expensive chipmaker for quite a long time, but things seem to have changed lately. Slightly after its Q1 earnings call, analysts started revising forward earnings expectations higher and higher.<\/p>\n Meanwhile, since early July, Nvidia\u2019s stock has been stuck in a consolidation period, which in combination with the increasing forward estimates send its price-to-earnings (P\/E) ratio significantly lower.<\/p>\n Despite the latest rally towards its record high, Nvidia\u2019s 12-month forward (P\/E) ratio, which denotes the dollar amount someone would need to invest to receive back one dollar in annual earnings, currently stands at 31.4x. In comparison, AMD\u2019s P\/E ratio is currently at 32.90x, while the tech-heavy Nasdaq\u2019s fluctuates near 25.4x.<\/p>\n The Santa Clara-based company will be the impact of China export controls, the product roadmap, the update on the data center supply chain, hyperscale commentary, and colour on AI services revenue. Ahead of the report, Morgan Stanley noted that the gap between supply and demand has been so wide for the company that even shaving off peak demand has had no impact.<\/p>\n Nvidia heads into Q3 earnings with shares up an acceptable 240% year-to-date. Lowe\u2019s (LOW), Analog Devices (ADI), Autodesk (ADSK), Best Buy (BBY), Baidu (BIDU), Deere (DE), and DICK\u2019S Sporting Goods (DKS) are some of the other notable companies that will enter the earnings confessional.<\/p>\n \u00a0<\/p>\n Monday, November 20 \u2013 Zoom Video (ZM) and BellRing Brands (BRBR).<\/p>\n Tuesday, November 21 \u2013 Nvidia (NVDA), Lowe\u2019s (LOW), Medtronic (MDT), Analog Devices (ADI), Autodesk (ADSK), Best Buy (BBY), Baidu (BIDU), DICK\u2019S Sporting Goods (DKS), Burlington Stores (BURL), HP (HPQ), Nordstrom (JWN), and Jack in the Box (JACK).<\/p>\n Wednesday, November 22 \u2013 Deere (DE). Source: Westpac, Commsec, Trading Economics, S&P Global Research, AMP\u00a0<\/strong><\/em><\/p>\n \u00a0<\/p>\n Monday\u00a0<\/strong> Tuesday\u00a0\u00a0<\/strong> Wednesday\u00a0<\/strong> Thursday\u00a0\u00a0<\/strong> Friday\u00a0<\/strong> <\/span><\/p>\n The post Tech Heavy: Wall Street says thanks for all the giving, Nvidia<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Elon Watch<\/h2>\n
The Week Ahead on Wall Street<\/h2>\n
\n\u00a0<\/p>\nNvidia earnings preview<\/h2>\n
\n\u00a0<\/p>\nWall Street Earnings This Thanksgiving Week<\/h2>\n
\n\u00a0<\/p>\nThe Economic Calendar<\/h2>\n
Monday November 20 \u2013 Friday November\u00a0 \u2013 24<\/strong><\/h2>\n
\nChina (Mainland) Loan Prime Rate (Nov)
\nThailand GDP (Q3)
\nMalaysia Trade (Oct)
\nGermany PPI (Oct)
\nTaiwan Export Orders (Oct)<\/p>\n
\nCanada Inflation (Oct)
\nCanada New Housing Price Index (Oct)
\nUnited States Chicago Fed National Activity Index (Oct)
\nUnited States Existing Home Sales (Oct)
\nUnited States Fed FOMC Minutes<\/p>\n
\nUnited Kingdom CBI Industrial Trends Orders
\nUnited States Durable Goods Orders (Oct)
\nEurozone Consumer Confidence (Nov, flash)
\nUnited States University of Michigan Sentiment (Nov, final)<\/p>\n
\nUnited States, Japan Market Holiday<\/em>
\nUK S&P Global\/CIPS Flash PMI, Manufacturing & Services*
\nGermany HCOB Flash PMI, Manufacturing & Services*
\nFrance HCOB Flash PMI, Manufacturing & Services*
\nIndonesia BI Interest Rate Decision
\nTaiwan Industrial Production (Oct)
\nTaiwan Retail Sales (Oct)<\/p>\n
\nUnited States, India (Partial) Market Holiday<\/em>
\nJapan au Jibun Bank Flash Manufacturing PMI
\nUS S&P Global Flash PMI, Manufacturing & Services
\nMexico GDP (Q3, final)
\nCanada Retail Sales (Sep)<\/p>\n