Things you need to know.
– OK – NVDA blows the roof off, mkt reaction is muted.
– Deep Seek is not a threat – at all.
– The Future of AI is bright…. Can we move on now?
– Bond yields are now inverted! 3’s & 10’s.
– Oil goes lower…. Gold is in retreat! Hello!
– Try the Calzochini di Pollo.
Here are the headlines:
NVDA – AI Boom is NOT Dead Yet
AI Chip Giant NVDA Reports Blockbuster Revenue
NVDA Revenues Jump Almost 80% on Booming AI Chip Sales
NVDA Continues to do an Amazing Job
NVDA is Far from Running Out of Road
NVDA Sales Surge in the Fourth Quarter on Demand for AI Chips
Do I need to go on?
Here is all you need to know.
“We’ve successfully ramped up the massive-scale production of Blackwell AI Supercomputers, achieving billions of dollars in sales in its first quarter. AI is advancing at light speed as agentic AI and physical AI set the stage for the next wave of AI to revolutionize the largest industries.” – Jensen Huang CEO 2/26/2025
They reported EPS of 89 cts/sh vs. 84 cts/sh. They reported $39.33 Billion in Revenue, up 78% y/y and easily beating expectations. They reported $130.5 billion in revenues for the year ending January 2025, more than double the 2024 revenue. They forecast 1 qtr. 2026 revs of $43 billion against the $41.75 billion estimate. Data center revs of $35.6 billion up 93%.
And then you get some dummy that runs with this theme:
While they projected and delivered revenue better than street estimates, the degree of that outperformance was less than it has been for a couple of years……. (suggesting that the results were a disappointment).
I mean it’s laughable…. But like I said yesterday, someone has to find something wrong with the report to justify selling it. The stock had a mixed reaction in the aftermarket – after closing at $131.28 up 3.9% the first reaction was to sell it down to $125.82 and then take it up to $136.60 as the algo’s and traders reacted to the headlines…..ultimately it settled up 1.2% at $132.90 and this morning it is trading right there in the pre-mkt….Can we move on now?
Investors, traders and even the algo’s waited all day for those results…. not sure what to do as the giant chipmaker is the barometer for AI and tech…the questions swirled all day – What would he say? Will he be disappointed? Is Deep Seek the threat that many think it is? Notice all of those questions have a negative tone….…… Yesterday I said that I was not concerned, but it is amazing what some people focus on as they look for something negative to focus on. I say – “Eliminate the Negatives, focus on the Positives”.
And so, stocks ended the day mixed as they digested a ‘barrage of statements’ out of the WH on trade policy. Yes, tariffs are coming, but why are you surprised? He ran on the theme that ‘tariffs are his favorite word in the dictionary’! Did anyone think it wasn’t happening?
The Dow lost 188 pts, the S&P up 1 pt, the Nasdaq added 50 pts, the Russell gained 4 pts, the Transports lost 48 pts, the Equal Weighted S&P down 16 pts while the Mag 7 Index lost 18 pts.
3 of the 11 sectors ended higher – Industrials +0.1%, Utilities + 0.5% and Tech + 1.1%. The other sectors ended lower with Consumer Staples leading the pack down 1.9%….as sticky inflation and tariff talks ‘could’ squeeze margins for the sector….as those companies may not be able to ‘pass on’ those higher prices to consumers if the economy stalls. Basic materials – 0.1%, Healthcare – 0.75%, Energy – 0.5%, Consumer Discretionary – 0.4%, Real Estate – 0.4%, Communications – 0.2%.
Down the chain – Homebuilders – 1%, Retailers -1.1%, Aerospace and Defense + 1.1%, the Value Trade – 0.6%, the Growth Trade + 0.7%, Semi’s up 0.75%, Big Pharma – 0.5%, Biotech – 0.5%, Airlines + 0.4%, Oil Exploration Production -0.8%…. The contra trades mixed – SH flat, DOG + 0.5%, PSQ – 0.2%, VIXY – 2%, while the SPXS was up 0.2%.
Bonds gained – the TLT up 0.6%, the TLH + 0.45% and this was after a successful $44 billion auction of 7 yr treasury notes. Yields on the 2 yr fell to 4.08% while the 10 yr fell to 4.25% piercing the yield on the current 3-month bill causing – guess what? An INVERTED yield curve – which they are reminding us of is ‘a largely accepted and largely accurate, sign of an impending recession within 18 months. ARE YOU KIDDING ME? That’s what they said the last time the yield curve inverted in 2021 and remained inverted until 2024……So, don’t go lighting your hair on fire just yet…… Now, remember, the driver behind falling bond yields appears to be investor nervousness about an economic slowdown rather than confidence in a stronger economy. Note the latest sentiment and consumer confidence numbers…. which is notable but not definitive.
Oil also continues to retreat….falling 0.2% to end the day at $68.82 leaving us just about $2 above the $66 range that we identified last week and this is AFTER the EIA reported that US crude stockpiles FELL by 2.3 million barrels last week and Trump shuts down Chevron’s Venezuela oil permit (because they don’t want the dangerous illegal Venezuelan migrants back) – further choking President Maduro’s regime…..both of those events should have boosted oil – one shows demand is fine (fall in stockpiles) while the other shows a tightening of supply (shutting the permit)…yet oil continues to trade a bit lower……but I think it’s gonna find some support right in here…..$68 ish….But remember – he campaigned on lower oil prices so let’s give it a chance to see what happens next. And if the Saudis in fact – increase production in April – that will only put more pressure on prices…. Lower prices for energy will be good for global inflation….
And gold is plunging – gold traders are taking profits after the dramatic move higher. This morning it is down $25 trading at $2906! So I guess when the chart suggested it was either gonna break out or break down last week – it broke down! My gut tells me it can probably continue to move down to the $2850 ish range. And if the Russian/Ukraine conflict comes to an end – then I would not be surprised if it tested even lower than that. Zelensky signed the ‘mineral ‘deal (that’s a positive) and so it appears that this chapter is about over….
The VIX is in retreat…..down 6.2% at 17.90…..still above the trendlines but moving lower…Now that the NVDA earnings are out, ‘some’ of the angst is gone….and that will most likely cause the VIX to settle down….which doesn’t mean that the markets won’t continue to retreat – they might, just not with a level of ‘panic’ that a rising VIX suggests. Recall, the VIX is about ‘fear’ it measures market volatility and investor sentiment, not market performance directly. It tracks the expected volatility of the S&P 500 over the next 30 days, based on options pricing. When the VIX is high, it typically signals uncertainty or fear among investors, often during turbulent times. When it’s low, it suggests confidence or calm in the markets. So, while it can reflect reactions to market conditions, it’s not a gauge of whether stocks are up or down.
US futures are rallying…. The Dow +120, S&P’s +40, the Nasdaq up 138, while the Russell is up 20. European markets are lower – autos getting slammed…. on the back of the tariff talk…. after Trump threatened to impose 25% tariffs on imports out of the ‘zone’. Tariffs coming as well to Mexico and Canada unless of course something changes.
The S&P closed at 5956 – up 1 pt. We tested and breached (temporarily) the intermediate trendline support was at 5945 (again) before finding support. This morning, markets are breathing a sigh of relief after the NVDA results…so the countdown begins anew…. NVDA reports again on May 22nd! Get ready!
Remember – give me a call to discuss your wealth building plan. 561-244-2504.
Take good care.
Sources: Bloomberg, CNBC, Reuters, Wall Street Journal
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The market commentary is the opinion of the author and is based on decades of industry and market experience; however, no guarantee is made or implied with respect to these opinions, which may not necessarily align with our firm’s standpoint.
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Calzochini di Pollo
This one is for the ‘kids’. It sounds so much better in Italian than the translation which is actually ‘Chicken Socks”
For this you need: 1 lb. of ground chicken, Egg, parmegiana cheese, s&p, ham (you can also use prosciutto), provolone cheese (sliced), Olive oil and plain breadcrumbs.
Heat your oven to 375 degrees.
In a bowl – add the ground chicken, 1 egg, 1 c of parmegiana, season w/ s&p – Mix well.
Now, make a large ‘meatball’. Now lay down some parchment paper and put the meatball on the paper. Cover with another piece and flatten out.
Now place 2 slices of provolone and 1 slice of ham and carefully ‘roll it (using the parchment paper to assist) into what kind of looks like an empanada.
Now place it in a bowl of breadcrumbs to cover both sides. Place on a baking sheet and drizzle with olive oil.
Bake for 25 mins…. You can then broil it for 2 mins just to get the breadcrumbs a bit crusty. Cut into it and the provolone is melty and gooey while the ham adds flavor…it’s kind of like ‘Chicken Cordon bleu’ without the sauce!
Buon Appetito
