NVDA delivers, and then some
GRIT
24 Aug
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NVIDIA crushed the quarter. And they are just getting started. In less than a decade, its data center business has gone from a rounding error to main source of sales.
Now analysts estimate a $1 trillion market opportunity.
A new computing era has begun.
Prices as of 4 pm EST, 8/23/23
S&P Global
🏭 Business activity in the US slowed to a crawl in August. That's according to S&P Global's flash purchasing managers indices which showed composite output (manufacturing plus services) fell more than expected to 50.4 from 52. Readings below 50 indicate a contraction. Beneath the headline number, manufacturing activity has contracted for 7 out of the last 8 months while the recent strength in services has faded with the index now reflecting the slowest expansion in 6 months. Zooming out, global PMIs paint a similar picture of contracting manufacturing activity and softer services expansion.
New York Times
👩🏼🏭 The US labor market is not as hot as you think. Revised data from the Bureau of Labor Statistics (BLS) reveal there were (probably) about 306k fewer jobs than initially reported in March. Most of the downward revisions were seen in the transportation & warehousing and professional & business services industries. And yet, the labor market is still hot: even after taking the revisions into account, there were still at least 2.8 million more jobs in March than there were before the pandemic.
Biggest eyewear innovation in 50+ years
Sponsored By: Ampere
Some days are brighter than others. So why do all of our sunglasses have to be a single tint?
Ampere is transforming the $160B eyewear market with smart sunglasses that can adjust tint instantly.
Their app-enabled Dusk shades can change the tint from 4% to 38% in 0.1 seconds. They include open ear audio and a microphone. They’re also lightweight, stylish, and available in a variety of classic styles.
With 680% revenue growth in the last year, there won’t be a better time to join Ampere as an early investor.
Here’s what they’ve accomplished so far:
$4M in gross revenue in 2022
50,000+ customers
Expanding to 1,500 stores in 2023
And this is just the beginning.
*Disclosure: This is a paid advertisement for Ampere’s Regulation CF offering. Please read the offering circular at https://invest.ampere.shop. The disclaimer at the bottom of this email MUST be read carefully.
App Economy
📈 "Aww, sh!t, here we go again." - Nvidia short-sellers (probably). Having already risen +225% YTD, the bar could not have been higher for Nvidia's Q2 earnings report. And yet the stock-market-carrying, AI-chip-making company not only beat Wall Street estimates, it knocked them out of the park! Booming demand from companies jockeying for position in the AI race led to revenue and profits that were 30% and 21% above consensus, respectively. That includes record revenue from its data center which rose 171% from a year ago. Turning to the current quarter, Nvidia once again blew away expectations, projecting revenues of $15.68 to $16.32 billion. Analysts were expecting "just" $12.6 billion.
DataTrek Research
🗣️ The Jackson Hole symposium kicks off today. How have stocks historically performed around the annual conference? According to DataTrek Research, stocks see an average pre-conference gain of 0.4% over the 5-days preceding the event (excluding last year's sell-off). That's just below the current +0.57% gain for the S&P 500 over the last 5 days. In the 5 days following the conference, the index has posted an average gain of 1% (again, excluding last year). What happens from here will all come down to how investors digest Powell's address tomorrow morning.
🛢️ US crude inventories are at their lowest since December 2022. Crude stocks drew more than double the expected amount last week while stockpiles at the Cushing hub saw their sharpest drop since October 2021. Oil prices fell yesterday though as production boosts from Iran and a possible easing of sanctions in Venezuela more than offset the bullish supply draw.
📊 Yesterday’s highlights:
FL Foot Locker: $0.04 EPS (vs. $0.042 expected) ❌, $1.86 billion in revenue (vs. $1.88B expected) ❌.
The sneaker retailer missed profit and sales estimates for the second consecutive quarter.
Like Dick's, Foot Locker has been hampered by inventory shrink and has been forced to rely on promotions to drive sales.
The company lowered its outlook for the fiscal year sharply, also for the second consecutive quarter.
PTON Peloton: -$0.68 EPS (vs. -$0.38 expected) ❌, $642.1 million in revenue (vs. $639.9M expected) ✅.
Peloton has now missed earnings estimates for 9 straight quarters.
Total subscribers are up 4% from a year ago but declined by 29k from the previous quarter.
The company issued revenue guidance for the current quarter that fell below analysts' expectations.
👀 What we’re watching today:
INTU Intuit
TD Toronto-Dominion Bank
NTES NetEase
WDAY Workday
MRVL Marvell Technology
DLTR Dollar Tree
ULTA Ulta Beauty
HTHT H World Group
BURL Burlington Stores
FUTU Futu Holdings
AFRM Affirm
GPS Gap
JWN Nordstrom
Shocker: Wagner Group owner Yevgeny Prigozhin's business jet "fell out of a window".
EU PMI: Manufacturing and services activity in the EU points to stagflation.
Transparency: The SEC has approved new rules for the private equity and hedge fund industries.
Mortgage demand: Mortgage applications in the US fell to the lowest since 1995.
0DTE debate: Bank of America and Goldman Sachs are duking it out over the impact of zero-day options.
Retail earnings: Abercrombie & Fitch shares surged after-hours after the company smashed earnings estimates.
Software earnings: Snowflake bucked its trend of outlook cuts and reaffirmed guidance following yesterday's earnings.
WGA offer: Hollywood producers made public the latest offer presented to them by striking writers.
Battery deal: Engie SA will acquire US battery firm Broad Reach Power for $1.6 billion.
Healthcare sale: Shares of NextGen surged after reports the company is considering a potential sale.
Healthcare SPAC: Sanuwave Health plans to go public via SPAC merger.
Steel bid: Esmark has withdrawn its $7.8 billion bid to purchase US Steel Corp.
Pub sale: KKR is close to selling pub operator Australian Venue for ~$906 million.
Monetary policy explained
— Grit Capital (@Grit_Capital)
Aug 23, 2023
The author, publisher or insiders of the publisher may currently have long or short positions in the securities of the companies mentioned herein, or may have such a position in the future (and therefore may profit from fluctuations in the trading price of the securities). To the extent such persons do have such positions, there is no guarantee that such persons will maintain such positions.
Sources:
https://www.pmi.spglobal.com/Public/Release/PressReleases?language=en
https://www.bls.gov/web/empsit/cesprelbmk.htm
https://twitter.com/EconomyApp/status/1694448140336984537
https://datatrekresearch.com/
https://www.cnbc.com/2023/08/23/foot-locker-fl-earnings-q2-2023-.html
https://www.cnbc.com/2023/08/23/peloton-pton-earnings-q4-2023.html
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