📈 NVDA will rock markets this week

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All eyes are on Nvidia and its CEO Jensen Huang as they prepare to shake up the markets with their earnings report. Nvidia has seen a remarkable turnaround, with forecasts projecting a staggering 600% increase in earnings compared to the previous year.

Meanwhile, the US housing market is experiencing a slowdown in new-home construction, signaling a cautious recovery amidst declining mortgage rates. And in a bullish move, Goldman Sachs has raised its year-end target for the S&P 500 to 5,200, citing an optimistic profit outlook for index companies.

Let’s dive in. 👇️ 

Markets

Nvidia and Jensen Huang will rock markets this week (3 minute read)
In 2018, Jensen Huang and Nvidia, a leading chip maker, faced significant challenges amid a global economic slowdown and escalating trade tensions between the US and China. Despite their chips being highly regarded for applications like gaming and graphics-intensive tasks, Nvidia's stock plummeted by 54%.

However, pivotal shifts occurred thereafter, including a 4-for-1 stock split in July 2021 and the recognition by tech giants of the capability of Nvidia's graphical chips to process vast amounts of data. Forecasts now project a remarkable earnings increase of over 600% compared to the previous year.

With Nvidia's stock soaring and its products in high demand, particularly for AI applications, the company's earnings report this week is enough to move the market and holds significant importance, potentially surpassing even major players like Meta.

US Housing Starts Drop to Slowest Pace in Five Months (2 minute read)
At the beginning of the year, US new-home construction experienced its sharpest decline since the pandemic's onset, signaling a gradual recovery in the housing market as potential buyers anticipate further decreases in mortgage rates.

According to government data released on Friday, residential starts fell by 14.8% last month to reach a 1.3 million annualized rate, following an upward revision to the previous month's figures. The drop was particularly pronounced in multifamily home construction, which plunged by over 35% after a surge in the preceding month, while single-family groundbreakings also decelerated. This headline figure, lower than all estimates in a Bloomberg survey of economists, marks the slowest pace in five months.

Goldman Sachs lifts 2024 S&P 500 target to 5,200 on upbeat profit outlook (2 minute read)
Goldman Sachs has revised its year-end target for the S&P 500 index to 5,200, reflecting a potential 4% increase from current levels, citing a brighter earnings outlook for companies within the index. This adjustment comes after the brokerage initially forecasted the index to close at 5,100 for 2024, later raising it from 4,700 in December.

The updated projection is influenced by factors such as moderating inflation and expectations of the Federal Reserve easing interest rates throughout the year. Goldman anticipates an 8% growth in profits for S&P 500 firms in 2024, fueled by an optimistic U.S. economic forecast and improved profit margins for major corporations.

Investing

The rise and rise of Nvidia stock (1 minute read)
Nvidia has secured its position as the third most valuable company in the United States, surpassing both Amazon and Alphabet this week. With only Apple and Microsoft boasting higher valuations, Nvidia's ascent underscores the growing significance of chipmakers in the tech landscape. Together, Microsoft and Nvidia represent a formidable force in AI, collectively valued at $4.8 trillion, exceeding the combined worth of Amazon, Alphabet, and Meta.

Meanwhile, Intel, once a dominant force in microchips, now lags significantly behind with a valuation of less than $0.2 trillion.

AI Is Already Making Us More Productive (4 minute read)
We're witnessing the early stages of an AI-driven surge in productivity, particularly evident in the recent 3.2% increase in worker productivity in the US during Q4 2023. The combined growth rates for Q3 and Q4 2023 far exceeded those observed from 2005 to 2019. 

While AI has been a buzzword, with over 30,000 mentions in earnings calls last year and 73% of businesses reported to be utilizing it according to PwC, its true potential lies in deep integration within enterprise software and business systems. Merely using AI in superficial ways, such as preferring ChatGPT over Wikipedia for background information, falls short of driving significant productivity gains. The real winners will be companies that leverage customized AI solutions and automation synergistically across their operations.

Currencies The Fed is set to cut rates this year. Here are the Asian currencies that stand to benefit (3 minute read)
The anticipation of interest rate cuts by the U.S. Federal Reserve later this year may not bode well for the dollar, but certain Asian currencies are poised to gain. Typically, higher interest rates bolster a country's currency by attracting foreign investment and driving up demand. Consequently, a weaker U.S. dollar tends to benefit emerging markets, a scenario often observed when the Fed reduces interest rates outside of economic crises.

Money

Why are ransomware gangs making so much money? (3 minute read)
For numerous organizations and startups, 2023 proved to be a financially challenging year, marked by struggles to secure funding and implementing austerity measures for survival. Conversely, ransomware and extortion groups experienced unprecedented financial success.

This trend is unsurprising given the evolving landscape of ransomware attacks, with hackers employing increasingly aggressive tactics to coerce victims into paying exorbitant ransom demands. Despite these escalating methods, governments have refrained from outright banning ransom payments, contributing to 2023 emerging as the most profitable year on record for ransomware gangs.

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