🦾🧠 Nvidia Expects a 170% Increase in Sales!
Happy Wednesday all,
This week, the declining jobs report dominated the news cycle as markets rejoiced seeing job openings decline for the third straight month. Continue reading below for more insight into that and how Jerome Powell’s speech in Jackson Hole led up to the market’s response to the report.
We also just published a new video on the YouTube channel on the seven levels of wealth, so don’t forget to give it a watch after you’re done reading the newsletter!
Enjoy this week’s Hump Days!
- Humphrey, Rickie & Tim
👀 Eye-Catching Headlines
🤖 OpenAI launches ChatGPT Enterprise, biggest announcement since ChatGPT debut (CNBC)
📱iPhone supply chain splinters under U.S.-China tensions (Bloomberg)
🌪️ Biden signs state of emergency order for Florida as Hurricane Idalia approaches (CNBC)
📨 Apple sends invites for Sept. 12 launch event, new iPhone 15 expected (CNBC)
⛽️ Gazprom’s net income shrinks on capped gas flows to Europe (Bloomberg)
🏦 U.S. banks to raise $70B in debt under draft rules aimed at mitigating failures (Reuters)
🇸🇦 BRICS set to invite Saudi membership in bid for more clout (Bloomberg)
🇨🇳 China stimulus rally lasts just 10 minutes, showing trader gloom (Bloomberg)
⚽️ Lionel Messi lifts MLS to new heights, but league needs more than “the GOAT” to grow (CNBC)
The Weekly Brief
Nvidia says sales will jump 170% this quarter, driven by AI (CNBC)
Nvidia expects Q3 revenue of about $16B, higher than the $12.61B forecasted by Refinitiv, which suggests a 170% increase from the year earlier. Nvidia’s jump in sales shows how central the company’s GPUs have been to the boom in AI technology. Chips like Nvidia’s A100 and H100 are integral to building and running applications like ChatGPT.
Hump Days Take
The one thing that is a potential for concern is President Joe Biden's export restriction on chips, although Nvidia's finance chief said the company would not be immediately affected by the restrictions. She added that the strength of the demand for their products worldwide means that they would not see an immediate material impact to their financial results, implying that should they be barred from selling to certain customers, there is enough demand elsewhere to meet the difference.
S&P 500 ends sharply higher, jobs data fuels interest rate optimism (Reuters)
The S&P 500 ended sharply higher on the backs of Tesla, Nvidia, and other mega-cap growth stocks following a drop in monthly job openings cemented expectations of a pause in interest rate hikes. The gains came after the job openings stood at 8.8M in July, falling for the third straight month, signaling easing labor market pressures.
Hump Days Take
Jerome Powell said in his speech in Jackson Hole that the central bank is ready to tighten again if needed to tame inflation, but the positive (declining) jobs report means that they likely don't need to anymore. Markets reacted swiftly to the news, as we're sure you've noticed.
Central bankers pledge to keep rates high until inflation tamed (Bloomberg)
The world’s top central bankers had their annual meeting in Jackson Hole, Wyoming. Keynote speeches from Jerome Powell and ECB President Christine Lagarde stressed the need to keep interest rates high until inflation is contained. A key theme that emerged was an acknowledgment of the difficulties of adapting to forces outside monetary authorities' control, such as productivity, global supply chains, and rising public debt levels.
Hump Days Take
While central bankers spent time laying out the challenges they face in deciding if they should continue to increase rates, they offered investors very little guidance as to whether they would do so in the coming months. However, The jobs report we discussed earlier is likely a signal to the Fed that they can pause rate hikes for the time being.
You’ll Find This Interesting
Visa and Mastercard are loading up to increase merchant fees that business owners pay when they accept customers’ credit cards. Card networks have said the fees cover costs related to fraud prevention and innovation. However, this means that you’ll likely see increased prices across the board to offset the added costs. Oftentimes, merchants pass along at least some of the costs associated with accepting credit card payments to customers.
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