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Will NVDA move the markets or just NVDA?

Aug 23, 2023

Good morning! 👋

Futures are up as the market awaits Nvidia’s earnings.

That’s typical ahead of major events.

What strikes me is just how much energy is being stored up for a big move. Volatility (as we measure it) has dropped precipitously, which tells me whatever happens next could be B.I.G!

Incidentally, I run this proprietary analysis nightly to keep track of things and thought you might appreciate seeing a glimpse from one of my daily “hot sheets” with the current reading circled in red.

Here’s my playbook.

NVDA Day

I laid out a three-part strategy yesterday for investors and traders who are interested in playing along, so I won’t repeat that here. (Read)

Instead, and to reiterate, NVDA’s earnings are NOT a precursor to what happens next for the entire market. They’re about NVDA.

Do NOT make the mistake of thinking otherwise.

While it’s true that the entire market may move based on NVDA’s results, that’s an opportunity to evaluate stocks you own or want to own on their own merits.

I’m getting my list ready if there’s a drop; and,
I’m comfortable with what I own if the markets want to run higher.

You?

PS: If you want to follow along, you can listen to NVDA’s call here.

PTON: The laundry hanger market has cracked

Peloton, which I have long maintained makes some of the world’s most expensive laundry hangers, is down in the dumps. (Read) PTON stock dropped nearly 30% in the premarket after an abysmal earnings report in which the company blamed a seat post recall and seasonal results for the poor showing.

Basically, it’s a case of the dog ate my homework.

The real problem here continues to be management, which either didn’t see this coming or failed to take corrective action when they did. If they did.

Personally, I don’t know how they could have missed it… 20,000 people cancelled their subscriptions while waiting for the recall. Perhaps they’ve got a few Fed employees on staff and thought it was “transitory”... but I digress. [face palm]

The company plans to announce loads of “global partnerships” that will be game-changers.

We’ll see.

The only game-changer out there is whether or not people want to ride and how much they’re willing to fork over to do it.

Consumer weak, retailers split

PTON, Foot Locker tank, yet Kohl’s and Abercrombie & Fitch soar.

What gives?

Same stuff we’ve talked about since COVID—the retail market will split into factions dominated by consumers purchasing “nice to have stuff” and those few retailers capable of building a community that blends offline and online behaviour with carefully cultivated branding.

Personally, I won’t touch a traditional retail stock at the moment.

Short, avoid, or if you’ve got the moxy, putskies.

Amazon employees quitting because they don’t want to move

Reports are surfacing that Amazon employees are quitting after being told they’d have to relocate. (Read)

It’s a free country—and while we’re at it, good luck replacing the bennies!

Call me crazy or perhaps I am just naïve, but I was raised in a different generation. You went to where the work was if you wanted to work. In my case, I moved cross-country and around the world several times. If you don’t see things that way, that’s different and that’s okay, but that’s also on you… not Amazon.

Just talking about this yesterday with the fabulous Scott “the Cow Guy” Shellady on RFDTV. (Watch)

I think Amazon’s HR department will be glad to shed some overhead because it’ll help improve profitability.

“Arms race” for semiconductors underway

According to Bloomberg, Chinese company Huawei is building “a collection of secret semiconductor fabrication facilities across China.” (Read) My guess is, using some form of stolen US and European tech.

We’ve talked about this several times.

China wouldn’t make a move like that unless it already had a Plan B.

China’s military/economic doctrine is based in part on distributed manufacturing to maintain production during times of war or conflict. The thinking dates back to WWII when leaders learned not to concentrate their resources. That lesson was subsequently reinforced in Gulf War I where Chinese oil contracts were repudiated when Iraq was invaded. And again more recently as part of the ongoing tech/espionage/trade situation.

If you don’t own US and European chip makers, you better think seriously about changing that up. Schtuff’s about to get real.

I recommend two. Upgrade to Paid