Weekly Market Update

AI Stocks Soar as Nvidia Reports Blowout Earnings

May 29, 2023
All that mattered in markets last week was AI, at not just who is going to make money in this space but who already is...

We could make this very short by saying ‘what we said last week’, or we could waste some column inches speculating about why markets appear to have been right not to get too worked up about the US debt ceiling deadline. Either way, all that mattered in markets was AI, and not just who is going to make money in this space but who already is. At the beginning of the week, Nvidia, this year’s outright market darling and many investors’ top pick for biggest AI beneficiary, was trading on a hefty 70 times multiple of expected earnings, but by Friday it had reported blow out earnings and guided higher, leaving it up another 25% on the day, and still trading on much lower multiple of next year’s earnings. Reasonable estimates of very plausible earnings would see it trade on a fairly moderate earnings multiple within a few years, underscoring the fact that unlike previous tech investing fads, this is based on actual earnings as much as hope.

The wider S&P Information Technology Index also led the way, with a mixture of hardware and software AI beneficiaries, like AMD chips, Marvell Technologies, Broadcom, and Adobe all up by 20-40%. Microsoft was up by another 5% and was one of the biggest contributors by virtue of its size. The IT index is now just 5% from its December 2021 highs. Nevertheless, there were signs of resilience elsewhere in the US economy, as Abercrombie and Fitch also surprised with strong enough earnings to see its share price jump 30%, while PacWest (one of the distressed US regional banks) jumped 20% as it showed signs of being able to shore up its balance sheet.  

Most other markets were fairly soft and ended down 1-2% (including the US market, if you exclude the IT sector). This may reflect the fact that the inflation outlook actually worsened somewhat, with the US PCE Inflation gauge coming in slightly higher than expected and pointing to stubbornly high services inflation and surging consumer spending. That pushed bond yields up (and prices down) around the world, even in New Zealand where the RBNZ surprised the markets by signalling that they did not expect to raise rates anymore. The US Dollar strengthened a couple of percent against most currencies. The biggest spike in short term yields was in the UK, where the Bank of England conceded that they were definitely not finished hiking, as the much-feared wage/price spiral was very much in evidence. Meanwhile in Australia, weaker than expected retail sales pointed to a more muted outlook, which appeared to be corroborated by weak results from City Chic and Universal Store Holdings. Commodity markets were generally soft, apart from energy, and the materials sector accounted for most of the local market’s 1.7% fall.

Markets think we're there - but are we?

August 2, 2024
Markets think ‘we’re there’ in the global fight against inflation – but are we? Last week the RBA also proclaimed confidently that local inflation had peaked, so you might think it’s all downhill from here...
Read More

Interest rate nerves as RBA walks a tightrope

August 2, 2024
Markets were again on the back foot last week. However, despite a fair amount of volatility, most markets were flat or only down by 1% or so. There seems to be an ongoing battle of wills between markets and the various central banks who are keen to talk down markets, lest the wealth effects of a buoyant market detract from the ongoing fight against inflation.
Read More

Equities turbulent but resilient as interest rates rise

August 2, 2024
Last week the S&P 500 traded in a 3% range, having done a 2% round trip on Thursday, followed by a 3% fall on Friday after the inflation data release and then another almost 2% round trip yesterday. Emerging markets were the worst performing, down 4% for the week. Taking a step back though, most equity markets haven’t given back that much of their gains from January, while Europe and the Nasdaq remain up 10% for the year.
Read More

Markets Up Despite Rising Bond Yields and Inflationary Data

August 2, 2024
Bond yields were up again last week but so were equity markets which was a nice change that lead to the first up week in the last four. In fact, while markets have been on the back foot recently, most commentators have been pleasantly surprised that they haven’t reacted too badly to an apparent wind shift in the gusty inflationary data.
Read More

SVB bankruptcy triggers swift response from the Fed

August 2, 2024
On Friday morning Silicon Valley Bank (SVB) had been the 16th largest US bank and a successful S&P 500 company, but by Saturday morning it was bankrupt after a sudden run on its deposit base had rendered it unviable.
Read More

Oh, what a week!

August 2, 2024
Oh what a week! The Four Seasons hit might seem a bit upbeat for the occasion of a banking crisis, but the market has at least got its mojo back in the last few days.
Read More

Markets Shrug Off Surprise Upside in US Inflation

August 2, 2024
Despite a higher-than-expected rise in US CPI for December 2022, markets remained relatively sanguine over the implications for growth and monetary policy.
Read More

Markets Retreat on Fading Rate Cut Hopes Before Late Rally

August 2, 2024
Risk assets broadly declined last week as economic data showed resilience and central banks pushed back against aggressive market pricing for rate cuts, puncturing investor hopes.
Read More

Global Equities Up on Hopes of Economic Stimulus

August 2, 2024
Last week saw a notable upswing in global equities, driven by optimism over a potential economic stimulus in China and dubious results in corporate earnings.
Read More

U.S. Jobs Report Sparks Market Shift

August 2, 2024
Amid a mixed bag of US corporate earnings and a strong jobs report fueling rate hike expectations, global markets face contrasting fortunes, highlighting the complexity of forecasting economic trends in a time of technological growth and geopolitical uncertainty.
Read More

S&P 500 Breaks 5,000 Amid Mixed Economic Signals and Rate Cut Speculations

August 2, 2024
It was an up and down week for markets after a strong finish the prior week.
Read More

Unpacking a Volatile Week Amid Inflation Warnings and Surprising Strengths

August 2, 2024
Markets gyrated last week as hotter-than-expected US inflation data sparked an initial tech rout before recovering. Meanwhile better-than-feared earnings results and recession-resilient emerging markets outperformed.
Read More

"What do I tell a client who wants to invest in Crypto?"

August 2, 2024
With 2021 bringing cryptocurrencies into the spotlight for both retail and institutional investors, is there a place for these currencies within client portfolio's?
Read More

The market has a "breadth" problem

August 2, 2024
Join InvestSense Director Jonathan Ramsay and Andrew Hunt of Hunt Economics as they discuss the markets ‘breadth’ problem and how strong liquidity should keep things afloat until February.
Read More

Finding value and maintaining confidence in a FOMO world

August 2, 2024
Join host Toby Potter of IMAP with Nick Kirrage of Schroders and Jonathan Ramsay of InvestSense as they discuss value as a style, and as a driver of conviction when investing.
Read More

Inflation in 2022 - Beware of cross currents in 2022

August 2, 2024
With inflation appearing to be on the way up again, what are some of the possible scenario’s for 2022? Where does inflation go from the zero bound we’ve reached?
Read More

What happened in markets in 2021, and why?

August 2, 2024
Join InvestSense Director, Jonathon Ramsey to reflect on the price action seen in markets in 2021 and what this might mean for 2022.
Read More

We've got a bad case of FOMO, but it's not what you think

August 2, 2024
With valuation still being the lightening rod for when markets react to external forces, the most expensive things tend to move the most. What does this mean for global asset allocators, and what is InvestSense’s position?
Read More

Helping your clients assess the climate impact of their Portfolio

August 2, 2024
Nathan Fradley explains how the ethosesg technology can help you assess and design an ethical portfolio that aligns to an investor’s personal values.
Read More

Carbon credits and investing – is it the outcome we expect?

August 2, 2024
ETFs that invest in carbon credits are now available. Why should we assume that their price will go up over time? And does buying a carbon credit ETF actually contribute positively to emissions reduction? Will it actually generate the outcome investors are expecting? This article explores the issues around investing in carbon credits.
Read More

Better World makes a difference with investment in renewables

August 2, 2024
There are many direct assets and funds that contribute positively to climate action within the InvestSense Better World Portfolios. Meridian Energy is one of the stand-out direct assets in the portfolio with a climate energy focus.
Read More

Bad news equals good news

August 2, 2024
In recent years professional investors have got increasingly used to the fact that good news is bad news for markets because higher interest rates are likely to be necessary, and of course vice-versa. However, last week the effect was stronger than ever and stocks rallied mid-week amidst reports of widespread lay-offs and expectations of a weak US jobs report.
Read More

‘Buy the dip’ opportunism start surfacing

August 2, 2024
The US market finally market caught a bid last week. Early in the week the market was down few percent after an earnings miss by ad dependent social media platform Snap (of Snapchat fame) combined with weak guidance raised more doubts about the economy and economic resilience of tech companies.
Read More

US momentarily dips into official bear market territory

August 2, 2024
The seventh negative week in a row for the US sent it briefly into official bear market territory before it recovered slightly late on Friday. The world’s largest stocks (Apple, Microsoft Amazon and Google) are all down 25%.
Read More

How Mark Lewin saved 13 hours a week with Managed Accounts

August 2, 2024
Mark Lewin was a financial planner, but is now the Director of Back Office Heros. In his planning business he gained significant efficiencies by recommending and implementing managed accounts for his clients. He tells us how...
Read More
Icon of a letter

InvestSense insights, delivered straight to your inbox.

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news

Icon of a letter

Get the latest industry news