June 24, 2024
(THE POP STAR OF TECH FORGED THE GENESIS OF NVIDIA IN A DENNY’S FAST-FOOD RESTAURANT)
June 24, 2024
Hello everyone,
Monday, June 24
10:30 a.m. Dallas Fed Index (June)
Tuesday, June 25
8:30 a.m. Chicago Fed National Activity Index (May)
9:00 a.m. FHFA Home Price Index (April)
9:00 a.m. S&P/Case Shiller comp. 20 Home Price Index (April)
10:00 a.m. Consumer Confidence (June)
10:00 a.m. Richmond Fed Index (June)
Earnings: FedEx, Carnival
Wednesday, June 26
8:00 a.m. Building Permits final (May)
10 a.m. New Home Sales (May)
Earnings: Micron Technology, General Mills
Thursday, June 27
8:30 a.m. Durable Orders preliminary (May)
8:30 a.m. GDP final (Q1)
8:30 a.m. Initial Claims (06/22)
8:30 a.m. Wholesale Inventories (May)
10 a.m. Pending Home Sales Index (May)
11:00 a.m. Kansas City Fed Manufacturing Index (June)
Earnings: Nike, Walgreens Boots Alliance, McCormick & Co.
Friday, June 28
8:30 a.m. Personal Consumption Expenditure (May)
8:30 a.m. Personal Income (May)
9:45 a.m. Chicago PMI (June)
10:00 a.m. Michigan Sentiment final (June)
Personal Consumption Expenditure data will be on the table this week.
We are seeing a trend towards slower inflation at a measured pace, and this quite possibly will keep equities on an upward trajectory in the second half of the year. However, a healthy pullback should not be a surprise in the second half of the year.
Nvidia – A Brief History
Jensen Huang worked at the microchip company AMD before co-founding Nvidia in 1991. Huang dreamt up the idea of Nvidia while at Denny’s, a fast-food restaurant, where he used to wash dishes. A plaque is now situated above the table where he and his co-founders created the idea of Nvidia, which was installed when the company’s market value surpassed $1 trillion.
The company initially focused on video games, developing components that allowed games consoles and personal computers to render three-dimensional graphics by stacking countless microscopic triangles on top of each other. Nvidia went public during the dotcom bubble at a $625 million valuation.
Nvidia held a key place in the gaming industry. But the real turning point in Nvidia’s history can be pinpointed around a decade later when scientists at the University of Toronto, led by the British computer scientist, Geoff Hinton, developed an image recognition program that used Nvidia’s graphics chips, rather than the central processing units that most computers relied on.
The program trounced the competition in an annual machine vision competition and its underlying architecture spawned the deep learning craze. This was something of a happy accident for Huang and he cleverly changed tack to capitalise. So, instead of Nvidia being focused on video games, the company would transform into an AI business. Huang set to work and invested resources to develop chips that could power synthetic intelligence.
Last month it was shown that Nvidia revenues had risen by 262pc in the last quarter, to $262bn. Profits have climbed more than sevenfold, from $2bn to $15bn. The waiting list for the company’s superpowered chips runs into next year.
But let’s not get too carried away with all the Nvidia hype just yet. Nvidia’s profits are less than half of Apple’s and have been built on the large investment in AI infrastructure that has yet to yield tangible profits for many of its customers.
Analysts are divided on what happens next. But some have predicted a valuation of $ 5 trillion within a year, a level that would see Huang’s own net worth overtake Bill Gates’ and see him competing for the title of world’s richest man.
Market Update
S&P 500 – has touched Key chart resistances and recorded a Bearish Outside Reversal Day in the process. From an Elliott Wave perspective, the S&P500 has completed the Wave structure, to signal trend exhaustion. However, any decline ahead is likely to be a Wave 4 correction, finding support around 5,100-5000. A subsequent 5th wave rally can then extend the bull market toward the inverse head and shoulders target level of 5,730.
Gold – is still correcting. Targets include 2,280 down to a possible target of 2, 200 in the short term. After that correction, gold will rally once again onto new highs.
Bitcoin – is still in correction mode and forming a right shoulder in an inverse head and shoulder pattern. After this pattern formation is completed, perhaps in mid to late July, Bitcoin will rally onto new highs.
US dollar – will rally for the short term. Euro, Pound, Aussie and Kiwi, and Japanese Yen will weaken against the dollar. This is a good time to start positioning yourself if you are interested in playing the currencies - start scaling into currency trades in the FXA, FXE, and FXB.
What is… a Share Buy Back?
A Share Buyback program is when a company buys back shares that were sold during the IPO. By doing this they are reducing the number of shares available to trade and everyone holding shares of the company will see their shares increase in value.
QI Corner
The Great Green Wall of China
My Corner
A Beach Volley Ball Competition held on Coolangatta Beach, Queensland in March 2024.
Cheers,
Jacquie