Observe. Think. Chat. Do. Trade. Repeat…
Zeekr, supported by Geely, experienced a rise in deliveries to 18,015 for August, although this was a decrease from the 20206 deliveries reported in June 2024.
Li Auto, renowned for its range-extender vehicles, saw a decrease in deliveries to 48,122 in August, a drop from the July record of 51,000.
The shares of the conglomerate, headquartered in Omaha, Nebraska, have surged over 28% in 2024, outperforming the S&P 500’s 18% increase. This major achievement came just two days before Buffett, often referred to as the ‘Oracle of Omaha,’ was due to celebrate his 94th birthday.
On Wednesday, the company’s shares rose by 0.8% to $696,502.02, surpassing the $1 trillion mark, as reported. The shares soared even further in the subsequent trading session.
The milestone serves as a testament to the firm’s financial robustness and the value of its franchise. It is particularly noteworthy given that Berkshire stands as one of the few remaining conglomerates today.
Buffett, serving as chairman and CEO, assumed command of Berkshire, a floundering textile enterprise, in the 1960s. He revolutionised the firm into a vast conglomerate covering insurance, railroads, retail, manufacturing, and energy sectors, boasting an unparalleled balance sheet and a formidable cash reserve.
Unlike the six other companies in the trillion-dollar club (Apple, Nvidia, Microsoft, Alphabet, Amazon and Meta), Berkshire is known for its old-economy focus as the owner of: BNSF Railway, Geico Insurance and Dairy Queen. (Although its sizable Apple position has helped drive recent gains.)
As the artificial intelligence boom continues, Nvidia remains a major beneficiary. Despite a stock price dip, after trading hours, the stock has risen approximately 150% this year. The question remains whether Nvidia can sustain this growth trajectory.
Nvidia said it expects about $32.5 billion in current-quarter revenue, versus $31.7 billion expected by analysts, according to analysis That would be an increase of 80% from a year earlier.
Revenue continues to surge, rising 122% on an annual basis during the quarter, following three straight periods of year-on-year growth in excess of 200%.
Nvidia’s data centre business, which encompasses its AI processors, saw a 154% increase in revenue from the previous year, reaching $26.3 billion and representing 88% of the company’s total sales.
However, not all these sales were from AI chips. Nvidia reported that its networking products contributed $3.7 billion in revenue.
The company primarily serves a select group of cloud service providers and consumer internet firms, including Microsoft, Alphabet, Meta, and Tesla. Nvidia’s chips, notably the H100 and H200, are integral to the majority of generative AI applications, like OpenAI‘s ChatGPT.
Nvidia also announced a $50 billion stock buyback.
Nvidia shares dropped close to 5% in after-hours pre-market trade (29th August 2024).
Benefiting significantly from the artificial intelligence surge, Nvidia’s market cap has increased approximately ninefold since late 2022 – a massive market cap gain.
However, after achieving a peak in June 2024 and momentarily claiming the title of the world’s most valuable public company, Nvidia then experienced close to a 30% decline in value over the subsequent seven weeks, resulting in an approximate $800 billion loss in market capitalisation.
Currently, the stock is experiencing a rally, bringing it within approximately 6% of its all-time peak. The chipmaker surpassed the $3 trillion market cap milestone in early June 2024, aligning with Microsoft and Apple. The question remains whether the company can reclaim and sustain that title.
Investors are closely monitoring Nvidia’s forecast for the October quarter, with the company anticipated to report a growth of approximately 75%. Positive guidance would imply that Nvidia’s affluent clients continue to invest heavily in AI development, whereas a lacklustre forecast might suggest that infrastructure investment is becoming excessive.
Should there be any signs of diminishing demand for AI or if a major cloud customer is reducing spending, it could lead to a notable decline in revenue.
Investors have responded positively to the Federal Reserve’s recent indications that interest rate cuts are highly probable to commence in September 2024.
Market dynamics and sentiment
The rise of the DJIA was propelled by advances in sectors like materials, utilities, and energy. Conversely, the broader market exhibited mixed outcomes. The S&P 500 declined by 0.3%, and the Nasdaq Composite dropped by 0.8%, contrasting with the Dow’s notable performance. This disparity is largely due to the lagging of technology stocks, especially with significant drops in firms such as Nvidia and Tesla.
Federal Reserve
Federal Reserve Chair Jerome Powell’s recent address at the Jackson Hole Economic Symposium was pivotal in bolstering investor confidence. Powell’s remarks indicated that the Fed is ready to cut interest rates, which many investors believe will foster economic growth and stabilise the markets. The expectation of rate cuts has played a significant role in the recent market rally, with predictions of potential reductions up to 1% by the end of 2024.
Despite varied performances across sectors, the Dow reaching a new high signals a wider optimism in the market. As the year unfolds, the dynamics among Federal Reserve policies, corporate earnings, and economic indicators will continue to influence market directions.
The agreement represents the most recent in a series of deals made by OpenAI with prominent media companies.
The material generated by media organizations is coveted by tech companies for training their AI (Artificial Intelligence) models.
Several media companies, such as the New York Times and the Chicago Tribune, have opposed this practice and have pursued legal measures to safeguard their content.
The financial details of the contract between OpenAI and Condé Nast were not revealed.
U.S. stocks climbed on Monday 19th August 2024, continuing the market’s rebound as investors prepared for the highly anticipated Federal Reserve symposium at Jackson Hole later in the week.
Both the S&P 500 and Nasdaq achieved their eighth consecutive day of gains, a record for 2024
The Dow Jones Industrial Average gained 236 points closing at 40896.
The day’s activity extended the recent rally, signalling another twist in what has been a volatile period for stocks. Last week saw the largest gains of the year for the three major indexes.
August began shakily with disappointing data igniting recession fears and intensifying concerns that the Federal Reserve was lagging in interest rate reductions. This led to a worldwide sell-off, culminating in the S&P 500’s worst day since 2022 on 5th August.
However, encouraging data last week appeared to calm the markets and raised hopes for a ‘soft landing’ of the economy. Positive figures in retail sales and initial jobless claims, along with robust earnings from Walmart, contributed to this optimism. Additionally, the annual inflation rate for July’s consumer price index reached its lowest point in over three years.
Gaming console sales have not met expectations. For example, sales of Sony’s PlayStation 5 have decreased from 3.3 million units in the same period last year to 2.4 million units in the fiscal first quarter of 2024.
The gaming industry experienced a substantial increase during the COVID-19 pandemic due to people staying indoors more often. Yet, with the easing of restrictions, there has been a noticeable change in consumer habits, with a trend towards increased outdoor activities.
Increased interest rates and inflation have diminished discretionary income, leading to a decrease in consumer spending on games.
The industry has faced mass layoffs and other operational challenges, which have impacted growth.
Despite these challenges, there are optimistic projections for 2025 with anticipated major releases like the eagerly awaited successor to Nintendo’s Switch console and Grand Theft Auto (GTA) VI.
Predictions for 2025 suggest that the new Nintendo console and GTA VI will make a significant impact, potentially revitalizing the industry.
The U.S. and China account for around half of consumer spending on games.
The gaming industry as a whole is currently estimated to be worth around $188 billion globally and this is projected to grow in 2025.
Intel is undergoing significant restructuring and cost-cutting to address competitive challenges in the semiconductor industry.
The recent transaction, disclosed on Tuesday 13th August 2024, is believed to have earned Intel approximately $147 million, based on Arm’s average share price between April and June 2024.
This move away from Arm occurs during a challenging financial phase for Intel, as it embarks on what CEO Pat Gelsinger reportedly describes as “the most extensive restructuring of Intel since the memory microprocessor transition four decades ago.”
In early August, Intel announced a cost-reduction plan designed to save $10 billion. This includes the layoff of about 15,000 employees, the elimination of the fiscal fourth-quarter dividend, and a reduction in capital expenditures.
At the same time, Intel disclosed quarterly figures that fell short of expectations and provided conservative guidance for the upcoming quarter.
This announcement precipitated the steepest single-day decline in Intel’s stock value in half a century, plummeting 26%.
The surge came as new economic data alleviated concerns of a U.S. recession.
In the U.S., retail sales saw a 1% increase in July, significantly exceeding the Dow Jones estimate of a 0.3% rise. Additionally, weekly jobless claims experienced a decline.
The rise in the Nikkei came after the biggest fall in history just days ago where it hit historic lows last seen in 1987 making it a remarkably fast recovery.
Retail sales saw a 1% increase in July 2024, significantly exceeding the prediction of a 0.3% rise. Additionally, the number of weekly jobless claims dropped. This data provided a boost to investors and the broader market, which is recovering from an August downturn linked to worries over a slowing economy, sparked by a disappointing U.S. jobs report on 2nd August 2024.
With over a 3% increase this week, the S&P 500 is now just about 2% shy of its record high. All three major U.S. indexes are trading above their 2nd August closing levels, which preceded the global stock market plunge on 5th August.
When commodity prices drop, it often reflects a decrease in demand for raw materials, which can be a sign of slowing economic activity. For instance, the recent decline in copper prices is seen as a potential indicator of economic slowdown.
Sugar, cotton, soybean, oil and iron ore are some examples where demand has fallen during this year.
However, it’s important to consider other factors as well. The global economic slowdown has reduced demand for energy, minerals, and agricultural products. While this trend is evident in many countries, the U.S. economy has shown some resilience.
So, while falling commodity prices can be a warning sign, they are just one piece of the puzzle. It’s essential to look at a broader range of economic indicators to get a complete picture.
The S&P 500 increased by 2.3%, closing at 5319.31, marking its best day since November 2022. The Dow Jones Industrial Average jumped by 683.04 points to 39446.49.
The Nasdaq Composite climbed to 16660.02. And all these gains just 4 days after the market rout on Monday 5th August 2024.
The most recent weekly unemployment claims were lower than expected, easing some of the recent worries about the U.S. labour market.
The initial claims for unemployment benefits last week were 233,000, a decrease of 17,000 from the previous week.
The Dow Jones Industrial Average dropped 234 points to 38763.45. The S&P 500 fell to 5199.50, while the Nasdaq Composite closed at 16195.81.
During the day, the Dow had surged around 480 points, the S&P 500 had climbed 1.73%, and the Nasdaq had risen over 2%.
However, a downturn in Nvidia and other major tech stocks, after an initial rise, led to a significant drop in the afternoon. Nvidia retracted by 5.1%, Super Micro Computer plummeted 20.1% following its fiscal Q4 earnings missing analyst predictions, Tesla fell 4.4%, and Meta Platforms decreased by 1%.
The U.S.10-year Treasury yield continued to rise, increasing by about six basis points to 3.95%, returning to its level before the disappointing job figures last Friday, which had sparked concerns of an economic slowdown.
The Volatility Index (CBOE), the so called ‘fear gauge‘ was trading at around 29, having dropped to as low as 22 earlier in the day. This sharp decrease from Monday 5th August 2024 suggests that investor fears are subsiding, however, they remain higher than at the beginning of the month.
The Nasdaq, known for its tech-centric portfolio, along with the Dow Jones Industrial Average and the S&P 500, all ended the day in more positive territory.
This ‘lift’ came after a period of muted activity in UK and European markets, with London’s FTSE 100 experiencing an initial surge before retreating.
In Japan, the Nikkei 225 stock index recorded a substantial rise of 10.2%, or 3217 points, marking its largest single-day point increase following a steep drop the day before.
The recent turmoil in the stock market was triggered on Friday 2nd August 2024 by unsatisfactory U.S. job data for July 2024, which indicated an increase in unemployment, raising alarms over a potential recession.
Additionally, there has been growing apprehension that stocks of major technology firms, especially those with significant investments in artificial intelligence (AI), may have been excessively valued, leading to challenges for some of these companies.
The Dow fell 1033.99 points closing at 38703. The Nasdaq Composite dropped to close at 16200, while the S&P 500 declined 3%, ending the day at 5186. Both the Dow and S&P 500 experienced their most significant daily losses since September 2022.
The Japanese stock market suffered its steepest fall since Black Monday of 1987, adding to the global market anxiety.
The primary driver of the worldwide market collapse was the fear of a U.S. recession, triggered by the disappointing July jobs report released on Friday.
Additionally, there is growing concern among investors that the Federal Reserve has delayed reducing interest rates to support the slowing economy.
The Nasdaq declined over 3% following its sharpest three-week drop in two years.
Nvidia’s shares fell approximately 6%, while Apple’s dropped more than 4%.
On Monday, as the U.S. markets commenced trading, the market capitalization of the largest tech companies plummeted by about $1 trillion, exacerbating a decline that pushed the Nasdaq into correction territory the previous week.
In early trade Nvidia’s market cap decreased by over $300 billion, but it swiftly regained about half of that loss. The chipmaker’s shares ultimately closed down 6.4%, equating to a $168 billion loss. Apple and Amazon saw their valuations fall by $224 billion and $109 billion at market open. Apple’s market cap finished 4.8% lower, a $162 billion decrease. Amazon’s valuation fell by 4.1% at closing, a $72 billion reduction.
Including significant drops in Meta, Microsoft, Alphabet, and Tesla, the top seven tech giants saw a $995 billion loss in market value in the initial moments of trading, although they did recover somewhat as the day went on.
Dow Jones Industrial Average futures dropped 1250 points following a 611point loss on Friday 2nd August 2024.
S&P 500 futures are down 4.6% after the benchmark lost 1.8% on Friday 2nd August 2024.
Nasdaq-100 futures lost 6% as big tech stocks take a hit in early trading.
Japan’s Nikkei 225 plunged 12% in its worst day since the 1987 Black Monday crash.
If the Dow Jones decline continues it would be the first 1000 point decline since September 2022.
The conglomerate, headquartered in Omaha, reported in its earnings filing that its investment in the tech giant was worth $84.2 billion at the end of the Q2, indicating it sold just over 49% of its Apple shares. Despite the sale, Apple remains Berkshire’s largest equity holding by a wide margin.
It was widely reported that the sale is part of a larger trend of asset liquidation by Buffett during the second quarter, with Berkshire Hathaway divesting over $75 billion in stocks, thereby increasing its cash reserves to a staggering $277 billion.
These benchmark indices have now declined more than 20% from their peak on 11th July 2024 – the index then touched 42000.
The Nikkei suffered over a 12% loss, closing at 31458, marking its worst performance since the ‘Black Monday’ of 1987. This drop of 4451 points is also the largest point loss in its history.
Year to date, the Nikkei has relinquished all its gains, shifting into a negative territory.
The Nikkei 225 index plunged around 5.80% to close at 35909, its most significant fall since March 2020, dipping below the 36000 for the first time since January 2024.
The broader Topix index experienced an even steeper decline of 6.14%, marking its worst performance in eight years, ending the day at 2537.
Daiwa Securities emerged as the biggest loser on the Nikkei index with an 18.85% erosion of its market cap.
Other prominent stocks also suffered losses; Softbank Group’s shares dropped over 8%, while trading giant Mitsui recorded a decline of more than 10%.
Amazon offers weak guidance citing Olympics and the Trump assassination attempt as cause (consumers are distracted). However, Amazon’s cloud unit reports 19% revenue growth, topping estimates and a 20% increase in business in Q2. Amazon stocks pull back after guidance update.
Intel endures a 22% share plunge dragging down other global microchip stocks from TSMC, ASML to Samsung. Company to cut 15% of workforce, reports quarterly guidance miss.
Meta shares climb 6% on positive earnings data and good revenue forecast. Zuckerberg enthused over AI and how it’s helping create profits suggesting ‘Meta’s advertising growth is proof that BIG AI spending is already paying off.’ However, Meta’s Reality Labs posts $4.5 billion loss in second quarter.
Nintendo profit falls 55% as sales of its ageing Switch console plunge. Nintendo revenue and profit plunged in Q1 as sales of its ageing Switch console decline. Nintendo sold 2.1 million units of its Switch consoles, down 46% on the year. Investors are seeking news surrounding a successor to the Nintendo Switch console.
Apple sales climbed 5%, topping estimates as iPad and services revenue lift despite ongoing issues with iPhone sales slipping in China. Apple is spending more on AI but remains way behind its peers.
Snap shares plunge more than 20% on weak guidance.
Qualcomm beats estimates as phone microchip sales up 12%.
Samsung Q2 revenue and profit comes in above estimates amid strong AI demand.
AMD jumps 5% as global microchip stocks rally. Data centre sales doubled.
The chip-design company has ceased disclosing the quarterly shipment numbers of its chips.
Arm’s shares dropped over 13% in after-hours trading on Wednesday following the chip-architecture firm’s announcement of modest earnings projections for the current quarter and the entire fiscal year.
Total revenue was a record $939 million, up 39% year-on-year
Royalty revenues were up and amounted to $467 million, this represents a 17% increase.
Licence and other revenue was $472 million, up 72% year-on-year.
Arm’s revenue increased by 39% year-on-year for the quarter ending 30th June 2024, as reported in a shareholder update. The net income reached $223 million, a significant rise from the previous year’s $105 million.
Arm has kept its full year forecast unchanged, projecting revenues between $3.8 billion and $4.1 billion.
For the upcoming fiscal Q2, Arm anticipates revenues ranging from $780 million to $830 million. This projection suggests no mid-range growth, contrasting with some analysts’ expectations of $804.1 million in revenue.
The British aerospace and defence giant announced an underlying profit of £1.1 billion for the first half of the year and projected this to grow to between £2.1 billion and £2.3 billion for the full year of 2024.
This projection surpasses the previous forecast of £1.7 billion to £2.0 billion made in its full-year results for 2023 and exceeds market expectations.
Shares in the Dutch company ASML soared by around 10% on Wednesday 31st July 2024 following a Reuters report indicating that the firm might be exempt from the broadened export restrictions on chipmaking equipment to China.
Additionally, it was also reported that the U.S. is contemplating an expansion of the foreign direct product rule.
U.S. chip export restrictions to China could exclude allies such as the Netherlands, Japan, South Korea, Israel, Taiwan, Singapore and Malaysia. Taiwan is the home of TSMC, the world’s biggest chip manufacturing plant.
Shares of global semiconductor companies surged on Wednesday 31st July 2024, lifted by positive earnings within the sector and reports suggesting potential easing of U.S. export restrictions to China.
AMD emerged as one of the standout performers, with its shares climbing over 9% in U.S. premarket trading following a robust second-quarter earnings report.
In extended trading on 30th July 2024, the stock experienced a quick decline as attention was drawn to the less-than-expected Azure revenue, despite management’s forecast for growth in the upcoming quarters.
The company’s total revenue saw a 15% increase compared to the previous year.
Despite surpassing earnings and revenue expectations, Microsoft’s shares dropped by up to 7% in extended trading on Tuesday, with investors concentrating on the underwhelming cloud revenue. However, executives offered a positive outlook, anticipating an acceleration in cloud growth during the first half of 2025.
Microsoft’s cloud division holds significant interest for investors, as it competes with Amazon Web Services (AWS) and Google in the artificial intelligence (AI) work arena. These three tech giants are pouring substantial resources into enhancing AI capabilities, aiming to attract both startups and established companies as generative AI technology swiftly progresses.
For Amazon, AWS has served as a vital profit centre for the past ten years.