Good morning. Markets are little changed so far today following a night where nervous investors (meaning me) anxiously watched the Nvidia earnings announcement … expecting big stock movement in either direction once the numbers hit the wires. But the news was mixed and while the company beat expectations on sales and earnings, some were disappointed about a disappointing data center report and the non-inclusion of China sales … and due to political issues, it is tough for them to count on sales to China right now (even with reported high demand). But what does Wedbush Securities Global Head of Technical Research, Daniel Ives, say? That companies around the globe want Nvidia chips and they are “years ahead of any other chip player.” We shall see. And you might not own the stock and wonder, “why do so many people care?” Well, looking at the holdings in the S&P 500 (which many hold in an ETF), the Nvidia “market cap” is 7.6% of the S&P … while the next 8 positions are all held by tech companies (if you include Tesla) … making up an astounding 36% of the Index Meanwhile a few at the Fed probably can’t wait for the next meeting to be over, regardless of the result … as the information they are receiving … along with political pressure … probably is resulting in many sleepless nights. On the one hand the U.S. economic number for the second quarter has been revised upward while, at the same time, weekly jobless claims declined. This could provide some fuel to the argument that a rate cut in September … which is expected … might be premature. Still, people looking for homes are having issues due to mortgage rates … in addition to high home prices … and would love to see rates come down. Related to this, there has been a worrisome spike in those cancelling contracts. And as it related to the Fed right now, it is difficult to assess which group (cut vs. no cut) will end up winning the battle next month … a battle that will certainly heat up over the next few weeks. I just finished up my first week of teaching two classes at a local university and in reviewing the material (on investments) I find it amazing how much I’ve forgotten in the many years since I was in school … and for which I am re-studying. Yes, while most of the basics are the same of course, there are some little nuances that I needed to once learn in order to pass exams … but things that I haven’t had need for since. Sorry to bore you … things like calculating the duration or convexity of a bond. Sure, in 1997 at Boston College, we needed to calculate things like that … but it’s 2025 … and you can simply look it up (or ask “AI”). That’ll about wrap it up for me today as I just bought a new driver and am going to go out for a round of golf. I’m very excited as I saved up and just purchased this ridiculously overpriced new set of clubs … figuring with a big and beautiful brand-new driver I can hit the ball even further into the woods. Have a great day, Joseph G. Witthohn, CFA Have any questions? Please contact info@teamemerald.com
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