This is the perfect example of the STUPIDITY that I am referencing above. Google shows investor patience with Big Tech's AI spending might be running short https://finance.yahoo.com/news/goog...pending-might-be-running-short-154439569.html MY COMMENT Obviously this is not how business and/or the world works. It will take years and decades for this AI tech to fully work its way into business and all aspects of life. It is not like flipping a light switch. At least one paragraph of the article above has it right: "Other observers looked past the more challenging aspects of the report and focused instead on the broad AI picture. “Strong 2Q search and Cloud results reinforces our thesis that Google is a net Al beneficiary,” said analysts at Bank of America Global Research in a report Wednesday." YES.....it is all about the....BIG PICTURE.......the BROAD PICTURE. The current focus on small business segments and the little picture WILL prove to be.....MEANINGLESS. You will not hear this sort of argument or breathless fear mongering in the near future. It is just meaningless hand wringing.
If you are into economic data....here you go. BUT....I can guarantee you that no one will know about or care about this report today. Private payroll growth slowed to 122,000 in July, less than expected, ADP says https://www.cnbc.com/2024/07/31/pri...2000-in-july-less-than-expected-adp-says.html
Really all I can say is......you have to love the IDIOCY of the short term. AND.....if you are smart you will not get swept up in it all.
As to the FED....a non-event as expected. In fact not even much coverage of them leading up to today. Fed holds rates steady and notes progress on inflation https://www.cnbc.com/2024/07/31/fed-rate-decision-july-2024.html Key Comments The FED held short-term interest rates unchanged......but said inflation is getting closer to its 2% target. They made no obvious comments that a rate cut is imminent. Instead, they basically said that more progress is needed before rate reductions can happen. “The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance,” All eyes will now be on September and/or November after the election.
BUMMER for those that were scared out of the stock yesterday. Nvidia stock soars 10% after strong AMD results, bullish call from Morgan Stanley https://finance.yahoo.com/news/nvid...llish-call-from-morgan-stanley-150152731.html Currently up by $12.57.....or.....+12.12%.
Looks like MSFT is also helping NVDA today. Nvidia shares soar 11% after Microsoft quells fears that AI buildout is too fast https://www.cnbc.com/2024/07/31/nvi...oft-amd-quell-fears-ai-buildout-too-fast.html (BOLD is my opinion OR what I consider important content) "Nvidia shares popped more than 11% Wednesday after remarks from top customer Microsoft and rival chipmaker AMD signaled there wouldn’t be a slowdown in the multibillion-dollar buildout of AI servers based around GPUs. Microsoft CEO Satya Nadella and finance chief Amy Hood said Tuesday the company plans to spend even more on Nvidia-based infrastructure next year. Microsoft spent $19 billion on capital expenditures during the fiscal fourth quarter, with about 60% on hardware. The tech giant also suggested it’s seeing a return on investment from its expensive GPU-based servers. The company’s remarks on its earnings call eased investor worries that Nvidia’s elevated AI sales were tied to an arms race among cloud providers that could be slowing down. Microsoft’s earnings report “may encourage most Nvidia/semis investors, as Microsoft’s capex came in much hotter-than-expected at $19 billion in the quarter,” UBS analyst Karl Keirstead wrote in a note on Wednesday. Nvidia has been the primary beneficiary of the AI boom. Its stock has doubled so far in 2024 and is up more than 500% since ChatGPT’s release in November 2022 kicked off intense investor interest in artificial intelligence technology. Morgan Stanley analysts named Nvidia a “top pick” in a note on Wednesday, saying that concerns including competitive dynamics, export controls and supply chain concerns are likely to “fade with time.” “Our perception is that the market is taking a very glass half-empty view of some of the hyperscale comments, where there is a clear desire on the part of customers to continue to commit resources to developing multi modal generative AI,” Morgan Stanley analyst Joseph Moore wrote. Moore also highlighted that Nvidia’s chips are transitioning from last-generation “Hopper” or H100 series chips to a new generation, called Blackwell, which could spur additional sales. “Our checks generally show that customers want to deploy GPUs as quickly as possible, and the resilience of the H100 even a few weeks from Blackwell ramping to us makes those spending concerns seem premature,” Moore wrote. AMD, Nvidia’s primary rival in the market for data center GPUs, reported better-than-expected sales and earnings on Tuesday and told investors that demand for its GPU remains strong. AMD CEO Lisa Su said the company expected $4.5 billion in AI chip sales this year, an 11% increase over its previous guidance. Goldman Sachs analysts suggest Microsoft and AMD’s data points contradict rising investor anxiety that a handful of cloud providers and big technology companies are overspending on Nvidia chips and building too much infrastructure too quickly. “We believe AMD’s positive Data Center GPU business outlook and Microsoft’s comments indicating a sustained increase in capex through FY25 bode well” for Nvidia, Goldman Sachs analyst Toshiya Hari said in a note on Wednesday. Nvidia is expected to report fiscal second-quarter earnings in August." MY COMMENT As usual the media story-line about companies backing off on these chips is simply the usual..........BS. These companies are in the fight of their life to build out their AI related business. If anything....they will increase spending. They are ALL fighting for market share and dominance.
A HUGE one day gain for me today. Eight of nine stocks in the GREEN. Only MSFT was red today down by a bit more than 1%. I also beat the SP500 today by 4.17%......in a single day.
I have no plans to.....ever...own META. But here are their earnings since they ARE one of the Magnificat Seven. Here is the first available data. Facebook parent Meta forecasts Q3 revenue above expectations after strong quarter https://finance.yahoo.com/news/facebook-parent-meta-forecasts-q3-200716133.html Meta beat Wall Street estimates for second-quarter revenue and issued a nice sales forecast. They are confident that robust digital ads spending can cover the cost of their AI investments. META expects third-quarter revenue of $38.5 billion to $41 billion, largely above analysts' average estimate of $39.14 billion, according to LSEG data. Revenue rose 22% to $39.07 billion, beating estimate of $38.31 billion.
HERE is a more complete picture. Meta shares pop on revenue and earnings beat, better than expected forecast https://www.cnbc.com/2024/07/31/meta-earnings-q2-2024.html (BOLD is my opinion OR what I consider important content) "Key Points Meta shares jumped about 7% in extended trading on Wednesday after the company beat Wall Street estimates for revenue and profit and issued a better-than-expected forecast for the current period. Meta is spending heavily on artificial intelligence and virtual reality, a big area of focus for investors. Meta shares jumped about 7% in extended trading on Wednesday after the company beat Wall Street estimates for revenue and profit and issued a better-than-expected forecast for the current period. Here are the results: Earnings: $5.16 a share vs. $4.73 per share expected by LSEG Revenue: $39.07 billion vs. $38.31 billion expected by LSEG Meta provided revenue guidance for the third quarter between the range of $38.5 billion to $41 billion. Analysts were expecting third-quarter sales guidance of $39.1 billion. The social networking giant reported second-quarter revenue growth of 22% from $32 billion a year earlier, marking a fourth straight quarter of growth in excess of 20%. Meta said that expenses in the second quarter was $24.2 billion, and that these expenses include the charge from Meta’s recent agreement to settle a facial recognition data lawsuit by the state of Texas for $1.4 billion. The company reported capital expenditures of $8.47 billion for the second quarter, which was lower than the $9.51 billion that analysts estimated. Regarding Meta’s outlook for expenses, the company said that total expenses for the year remain unchanged at $96 billion to $99 billion. Capital expenditures are up from the low range to $37 billion to $40 billion compared to $35 billion to $40 billion. For user metrics, Meta reported that it had 3.27 billion daily active people (DAP) in the quarter, matching StreetAccount estimates. In the past, Meta reported daily and monthly active user numbers for its Facebook and Messenger apps. The DAP figure is the number of people accessing any of its apps. “We had a strong quarter, and Meta AI is on track to be the most used AI assistant in the world by the end of the year,” Meta CEO Mark Zuckerberg said in a statement. “We’ve released the first frontier-level open source AI model, we continue to see good traction with our Ray-Ban Meta AI glasses, and we’re driving good growth across our apps.”" MY COMMENT A BIG BEAT for Meta. Good.....we needed this for some positive momentum over the rest of the week. Next up.....AMZN and AAPL tomorrow.
I just don't get it when it comes to Meta, how do they make such a big revenue. Their Facebook app is so bad, half the time it doesn't even open, and it's hard to navigate. One of the worst apps IMO.
Poor AMD. Have a steller ER and NVDA not only goes up more but today they are in the red. I guess there isn't much for me to do except sit tight for the NVDA ER on 8/28.
More good news for a rate cut in September. US manufacturing gauge drops to eight-month low https://finance.yahoo.com/news/us-manufacturing-gauge-drops-eight-140253379.html (BOLD is my opinion OR what I consider important content) "WASHINGTON(Reuters) - A measure of U.S. manufacturing activity dropped to an eight-month low in July amid a slump in new orders, but that likely exaggerates the industry's struggles as production at factories rebounded sharply in the second quarter. The Institute for Supply Management (ISM) said on Thursday that its manufacturing PMI dropped to 46.8 last month, the lowest reading since November, from 48.5 in June. A PMI reading below 50 indicates contraction in the manufacturing sector, which accounts for 10.3% of the economy. Despite declining for a fourth straight month, the PMI remained above the 42.5 level that the ISM said over time generally indicates an expansion of the overall economy. Economists polled by Reuters had forecast the PMI edging up to 48.8. Though manufacturing has been undercut by higher interest rates, the situation is probably not as dire as suggested by sentiment surveys such the ISM. So-called hard data from the government and Federal Reserve suggests the industry has stabilized. Data from the Fed last month showed factory production rebounded at a 3.4% annualized rate in the second quarter after contracting at a 1.3% pace in the January-March quarter. The Commerce Department last week reported that spending on goods had picked by the second quarter after hitting a soft patch in the first three months on the year, with motor vehicles helping to power economic growth. The U.S. central bank on Wednesday kept its benchmark overnight interest rate in the 5.25%-5.50% range, where it has been since last July, but opened the door to reducing borrowing costs as soon as its next meeting in September. The ISM survey's forward-looking new orders sub-index fell to 47.4 last month from 49.3 in June. Output continued to decline, with the production sub-index sliding to 45.9 from 48.5 in June. Despite subdued orders, manufacturers faced higher prices for inputs, likely reflecting soaring freight rates. The survey's measure of prices paid by manufacturers increased to 52.9 from 52.1 in June. Its measure of supplier deliveries rose to 52.6 from 49.8 in June. A reading above 50 indicates slower deliveries. Factory employment continued to shrink as firms reduce head counts through layoffs, attrition and hiring freezes." MY COMMENT The last first.....I wonder how much of the shrinking work force at these firms is due to robotics, AI, and other tech. Probably most of it. Not data anyone will care much about....but another good little data point for rate cuts.
I like this little article. 7 Questions I’m Pondering https://awealthofcommonsense.com/2024/07/7-questions-im-pondering/ (BOLD is my opinion OR what I consider important content) "Seven questions I’m pondering at the moment: 1. Why doesn’t the Fed just cut now? Inflation is under control. The labor market is cooling off. The housing market is a mess. I know people who lived through the 1970s are worried about a replay but this is not that. If the Fed waits too long the economy is going to roll over and they’re not going to be able to stop the unemployment rate from rising. What are they waiting for? Let’s get this show on the road and cut rates already. If inflation picks up again they can always raise rates or stop cutting. 2. Do Americans realize how rich they are? Jacob Kirkegaard from the Economic Innovation Group published an interesting report that compares U.S. workers with the rest of the world. Here’s a look at average wages across different states and countries: U.S. workers make a lot more money than people in most countries. Mississippi has higher average wages than Germany and Canada. Oklahoma, West Virginia and South Carolina have higher average incomes than Belgium, Denmark and Austria. Of course, it’s also true that one reason for this disparity is that Americans work longer hours than people in other countries. However, it’s striking how many states have higher wages than some of the world’s biggest developed economies. Many Americans make more money than you think. 3. Did young people even have a chance? I’ve written a lot about the the U-shaped curve in happiness over the years. The idea is you are typically happier when you’re younger, go into a happiness bear market during middle age and then enter a bull market of happy times in your older years. New research shows social media may have broken the U for young people: Across a variety of datasets and measures, the finding of a midlife low has been consistently replicated. The U-shape has been apparent across a whole range of well-being metrics, including life satisfaction, financial satisfaction, worthwhileness, and happiness. Every U.S. state had a U-shape. But not anymore. Now, young adults (on average) are the least happy people. Unhappiness now declines with age, and happiness now rises with age–and this change seems to have started around 2017. The prime-age are happier than the young. I can’t imagine growing up in the fishbowl of smartphone cameras, social media and never-ending news alerts. I don’t know the answer since the internet is not slowing down anytime soon. 4. Are fireplaces underrated? I often wonder how boring life used to be for humanity before electricity, sports, TV, the internet, streaming services, movies and smartphones. My guess is people mostly stared at the fire that was keeping them warm.1 We took a family trip this past weekend and the cabin we stayed in was off the beaten path. It had a huge porch with a really nice outdoor fireplace. We spent all three nights sitting around the fire, drinking beer, listening to music and telling stories. There is something mesmerizing and calming about sitting around a fire in the summertime. I’ve never had a bad time sitting by the fire on a nice evening. 5. Are small caps cheap for a reason? JP Morgan’s Michael Cembalest shared some great charts in a recent piece in his Eye on the Market newsletter about small cap stocks: The performance of smaller stocks relative to larger stocks is cyclical. The current cycle happened for a reason. Large caps have grown their earnings at a higher clip: They have better margins: Now small cap stocks are much cheaper than large cap stocks: The million dollar question is this: Are the valuation differences going to provide a tailwind for small caps and a headwind for large caps in the years ahead? 6. Why do hotels keep trying to make steamers a thing? The last two hotels I stayed at had steamers instead of an iron. Steamers are nice because they don’t require an ironing board. The problem is that they don’t get out the wrinkles! That’s a problem because your clothes tend to get wrinkled after being in a suitcase and rolling around an airplane. Steamers are useless! 7. Is 2024 going to be an “average” year for the stock market? Historical stock market data shows returns in a given year are typically nowhere near the long-term averages. Over the past 100 years or so, the U.S. stock market has only ever experienced returns in the 8% to 12% range five times. Roughly half of all years since 1928 have seen double-digit losses (12 times) or 20%+ gains (35 times) for the S&P 500. Two-thirds of the time stocks finish negative or up 20% or greater. Is this finally the year we see returns close to the long-term averages? Here are the year-to-date total returns for the S&P 500, Nasdaq 100, Russell 2000 and Dow Jones Industrial Average: There are still five months remaining in 2024 so it’s still possible we will see a big move in either direction. But so far this year, returns are looking normal-ish. Things don’t stay normal for long in the markets but you never know. MY COMMENT Actually.....TOTAL RETURNS....this year are WAY ABOVE normal. Looking good with only five months to go. Lets keep up the good work.
Obviously the gorilla in the corner today.....after the close. Apple, Amazon Results Are Crucial for Nasdaq 100’s Next Leg https://finance.yahoo.com/news/apple-amazon-results-crucial-nasdaq-115416183.html MY COMMENT A little dramatic on the headline. Especially considering that the markets often dont reward or seem to care about earnings BEATS. SO.....the markets today are just place-holder markets till after the close. The market tomorrow is what will count for the week.....if you have extreme short term focus. I am struck today after watching some of the Olympics....how much the media and others are making the markets like sports, politics, and everything else in modern society......a BIG GAME. There is NO real depth of commentary. it is ALL FLUFF....HYPE.....BS.....IGNORANCE....etc, etc, etc. It is like all the coverage of SNOOP DOG at the Olympics or the elites and celebrities in the audience....even Taylor Swift.
OK......a mid morning shift to RED, RED, RED, in all the market averages. I have a split portfolio right now....four stocks up and four stocks down......and my single key stock NVDA.....in the red after being green earlier in the day. As usual.....I sit and wait.......reading articles, scanning content, Business and news TV in the background. AND.....today....actually NOTHING going on of any importance in the market world. At least we are now in the month of August.....so we are now at OFFICIALLY....five months left in the investing year. In the old days I would not expect much in August other than a heightened chance of a summer correction. All of Wall Street would be on vacation till after Labor Day.
AMAZING how this data has been out ALL DAY....yet the markets just noticed it about....30 minutes......ago and tanked. No doubt a massive AI TRADING ATTACK on the markets. Dow drops 400 points after weak data raises worries about U.S. economy: Live updates https://www.cnbc.com/2024/07/31/stock-market-today-live-updates.html (BOLD is my opinion OR what I consider important content) "The Dow Jones Industrial Average fell Thursday, as fresh data stoked concerns over the state of the U.S. economy. The 30-stock Dow dropped 406 points, or 1%. The S&P 500 shed 0.7%, while the Nasdaq Composite slipped 0.9%. Initial jobless claims rose to 249,000 for the week ended in July 27, higher than a Dow Jones forecast of 235,000. The ISM manufacturing index came in at 46.8, adding to a broader picture of slowing economic activity. That data follows the Federal Reserve keeping rates unchanged and Chair Jerome Powell signaling a September rate is on the table. Yields fell Thursday as investors digested Powell’s comments, with the benchmark 10-year Treasury yield reaching its lowest level since Feb. 2. “The economic data keep rolling on in the direction of a downturn if not recession this morning,” said Chris Rupkey, chief economist at FWDBONDS. “The stock market doesn’t know whether to laugh or cry because while three Fed rate cuts may be coming this year and 10-year bond yields are falling below 4.00%, the winds of recession are coming in hard.” Fed funds futures trading indicated an 86% likelihood that the central bank cuts rates by 25 basis points at its September meeting, according to CME Group’s FedWatch Tool. Stocks began the day on a high note, as Meta Platforms rallied about 7% on stronger-than-expected second-quarter results and upbeat guidance. Shake Shack, meanwhile, jumped more than 15% after posting a revenue beat. Arm Holdings slid 14% after offering an underwhelming current-quarter guide. Moderna plunged nearly 17% after slashing its full-year sales guidance." MY COMMENT Until about 30 minutes ago we were GREEN......now BIG RED. Nothing changed at that point.......just AI SPEED TRADERS attacking the markets.....in my view. Talk about a classic Texas drink......."BIG RED".....it originated in Waco Texas. Big Red (soft drink) https://en.wikipedia.org/wiki/Big_Red_(soft_drink) People....including "me"....... often describe the taste as....."bubble gum". Dr Pepper......YES....anther Texas soda classic from Waco, Texas. Before......"Magnolia" (TV empire)........Waco was primarily known as the home of.....Dr Pepper....with the original Dr Pepper plant and the Dr Pepper Museum. AND....yes....I have visited the Dr pepper Museum in Waco.....pre-Magnolia. Dr Pepper https://en.wikipedia.org/wiki/Dr_Pepper Dr Pepper Museum https://drpeppermuseum.com/ You never know what you will learn in this thread.
And to continue the above.....soda manufacturing in Texas went to using corn syrup and other sweeteners along with all the other big soda companies. One company bucked the trend......Dublin Bottling Works. They continued to produce Dr Pepper and other soda made with REAL cane sugar. For many years they were the only place to get....REAL SUGAR....Dr Pepper. People would search....FAR and WIDE.....for stores that had the Dublin product. It would spread by word of mouth......"such and such gas station has real Dublin Dr pepper". They are still in business but no longer do Dr Pepper. Many would drive to Dublin to stock up on "ORIGINAL" Dr Pepper. A few restaurants would have on their menu......"Dublin Dr Pepper". Now....Dr pepper makes their own cane sugar version and Dublin no longer does the drink. They continue to make many other REAL SUGAR drinks. https://www.dublinbottlingworks.com/our-history/ They are readily available now all over the country.....but REAL MEXICAN COKE.....made with CANE SUGAR.....in glass bottles....was a hot item here in Texas in the past. Same as Dublin.....word would spread that some store or gas station had REAL Mexican Coke. We would go out of our way to find it and stock up when we did. We would carefully inspect the bottles to make sure it was the real thing. I always wondered why the COCA-COLA company did not make their own version with real cane sugar as a consumer option. It seemed like a no-brainier business decision to me. I suspect it would quickly eclipse their fructose version of the drink and become the norm. Even now I dont think COKE makes a real sugar coke in the USA. Of course ALL grocery stores here in Texas carry.....MEXICAN COKE.....along with MEXICAN SPRITE and MEXICAN FANTA and other MEXICAN real sugar drinks. I assume it is also now available all over the country. COSTCO even carried cases of MEXICAN COKE in glass bottles. I assume they still do.
