To The Moon

In my first post for this week, I mentioned that there will be ups & downs as quarterly earnings reports begin to taper off.

Catalysts driving US market can be found here! Click to read. Give a “LIKe” ok - thanks!

For a 2nd consecutive day, US market ended much higher after US July 2023 JOLTs was released.

The official data, kind of cemented Wall Street’s anticipation of a possible “halt” in interest rate hike by the Fed during Sep 19-20 FOMC meeting.

When market closed on Tuesday:

• DJIA: +0.85% (+292.69 to 34,852.67).

• S&P 500: +1.45% (+64.32 to 4,497.63). It was S&P strongest 1-day gain since 02 Jun 2023.

• Nasdaq: +1.74% (+238.63 to 13,943.76). It was Nasdaq strongest session since 28 Jul 2023!

Catalysts for Tuesday’s performance:

• US July jobs opening and labour turnover surveys (JOLTs).

• US Conference Board (CB) Consumer confidence report.

• The number of job openings stood at 8.827 million in July (see above YELLOW graph) versus Wall Street expectations of 9.5 million opening.

• This is a decrease from the 9.16 million June 2023 job openings.

• Incidentally, this is US JOLTs 3rd consecutive month of decline.

• Signaling easing of labour market pressures.

• Something the Fed focused since it began hiking interest since 17 Mar 2022.

• The report also showed a decline in the Quits rate, that is closely watched by economists as elevated quits are seen as a sign of confidence among workers.

• July 2023 quits rate fell to 2.3%, the lowest since January 2021 (see above GREEN graph).

• Investors also combed thru the report from the Conference Board for August 2023.

• US Consumer confidence for August 2023 fell to 106.1 versus market expectations of 116.

• It also came in much weaker than last month’s revised data of 114.0 (see above).

• This is the biggest fall in 2 years, erasing most of summer’s surge.

• While a decline in consumer confidence could be interpreted as a negative sign for the US economy.

• In contrast this is exactly what the Fed would like to see in their bid to curb inflation.

And just like that, the 2 set of official data “helped Wall Street analysts” seal their hopes & wishes for yet another pause in interest hike come September 2023.

I like to think that the last kick-ass catalyst for Tuesday was the announced partnership between 2 of the 7 Magnificent stocks - $Alphabet(GOOG)$ and $NVIDIA Corp(NVDA)$ .

• The chipmaker announced a partnership with Google that could effectively expand distribution of its artificial intelligence technology.

• Google Cloud & Nvidia announced a new AI infrastructure and software for customers to build and deploy massive models for generative AI and speed data science workloads.

• Nvidia’s rose +4.16% ($19.49) to close at another high of US$487.48.

• Google (class C) on the other hand ended up +2.81% ($3.70) to US$135.49.

• In a blog post, Nvidia CEO Jensen Huang wrote “Our expanded collaboration with Google Cloud will help developers accelerate their work with infrastructure, software and services that supercharge energy efficiency and reduce costs”

Will both Nvidia & Google continue to rise today? To be seen!

What I Think?

• All stocks remotely linked to artificial intelligence (AI) will have a 2nd lease of life, now that there is concrete evidence on AI implementation.

• I think this partnership will be a watershed moment for Google especially.

• Reason being, Google’s cloud technology has been trailing behind cloud leader $Amazon.com(AMZN)$ and then $Microsoft(MSFT)$ .

• Will this collaboration in “advanced technology” help Google Cloud to (a) gain a bigger market share and (b) leapfrog over Microsoft Azure?

• As for Nvidia, will this collaboration help pave the way for other collaborations in the near future, further sealing chipmaker’s position as the defacto leader when it comes to AI-chip?

• Will other chipmakers eg. $Advanced Micro Devices(AMD)$, Broadcom Inc, Intel be able to get onto the AI bandwagon before its too late?

These will be exciting times for the Semiconductor industry as technology gets integrated to enhance the world that we live in.

• Do you think Google stock price will continue to zoom upwards today?

• Do you think Nvidia stock price will continue to zoom upwards today?

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