Things you need to know.

• Jensen Huang did NOT disappoint!
• 3 Judge Panel (in NYC) strikes down Trumps Tariffs.
• Stocks are surging around the world.
• Bonds down, yields up, oil teasing trendline resistance.
• Eco data – a non-event.
• Try the Creamy Garlic Chicken

BAM! You need to know TWO things…..The first is that Jensen Huang crushed it AGAIN (What did I tell you yesterday?) – even after taking that hit ($4.5 billion) from US semiconductor exports to China! NVDA beats on all metrics (you can’t be surprised) and traders took it higher… Jensen telling investors that NVDA went from being a ‘chip’ company to a ‘tech’ company to what is now an ‘INFRASTRUCTURE’ company…. Because they provide the ‘fundamental building blocks for the AI era’. “NVDA is essentially creating the AI factories that will power the next generation of AI-driven innovation” Oh, and he predicted ‘exponential growth’ as well.

Now just to make it clear so that you don’t have to ask –

EPS – BEAT, Data center revenue – BEAT, Compute revenue – BEAT, Networking revenue – BEAT, Gaming revenue – BEAT, Professional visualization revenue – BEAT, Automotive revenue – BEAT, Adjusted Gross Margins – BEAT, R&D expenses were less than expected – so that’s a BEAT, Adjusted Operating Expenses – less than expected so that’s a BEAT….Are you seeing a pattern?

This morning it is quoted up $7.50 or 5.6% at $142.36, just $1 below the February 17^th high of $143.44 – which represents some level of resistance (not a lot, but some) and this is KEY. Why? Because if we pierce that then the January high of $153 is in the center of the bullseye. If we fail to pierce it – all that means is that we need to digest all of this news and allow the stock to stabilize. Either way – it’s a WIN for everyone – except those who were betting against him (How’s that working out?).

And there are a lot of beneficiaries – all of these names are quoted higher this morning….……AMD is up 3.5%, ASML + 2.5%, AVGO + 3.5%, QCOM +2%, AMZN +2.7%, MSFT + 0.6%, EQIX + 0.4%, HPE + 1.9%, CRWV +5.2% and the list goes on….

And then the second is that a 3-judge panel in Manhattan for the US Court of International Trade declared that the Trump Administration can not invoke the 1977 law (IEEPA – Int’l Emergency Economic Powers Act) giving him ‘emergency powers’ to invoke all kinds of tariffs on dozens of countries. And that also includes any tariff levied on Canada, Mexico and China over the security of the border and fentanyl trafficking. Which sounds to me like this ‘panel’ of judges has not problem with an open border and fentanyl trafficking. Brilliant! These judges must be Harvard graduates!

And while this does throw Trumps tariff strategy into turmoil – our friends at Strategas say – ‘not so fast’ – what this means is that the long legal process is just beginning. In any event – while it appears bullish – it may be short lived. The federal appeals court may have a different view of this and even if they don’t, – he can always ‘invoke the Balance of Payments Act and/or the Tariff Act of 1930 – he could also use executive power under Section 301 of the Trade Act of 1974 to reimpose tariffs. (there is also the Trading with the Enemies Act of 1917 that could play a role – but that’s a real stretch because it restricts trade with countries deemed hostile to the US during times of war – which is NOT the case at the moment) … so get ready, because we will be talking about this for a while. Remember – it ain’t over until the ‘fat lady sings’……

In any event it is RISK ON – stocks are surging – taking back any of the losses from yesterday…. Dow futures are up 400 pts or 0.9%, S&P’s up 90 pts or 1.5%, Nasdaq up 427 pts or 2.2% while the Russell is up 34 pts or 1.6%.

Eco data today includes 1^st revision to 1^st qtr. GDP (non-event), Core PCE Index Q/Q – at 3.5% – which is unchanged, (should be a non-event), Initial and Cont. Claims (non-event) and Pending Home sales – which are expected to be down 1% but will be another non-event.

Bonds sold off a bit yesterday and are down again this morning – sending yields UP. 2 yr yields are now back over 4% at 4.02%, 10 yr is yielding 4.53%, and the 30 yr is yielding 5.02%… levels that prove to be a bit of an issue for stocks – but it appears as if no one is paying attention to that right now…they are just focused on NVDA and the court ruling.

Gold sold off a bit yesterday – down $15 to end the day at $3,322 and this morning it is flat….as it too, is trying to price in what this all means…..Gold should retreat on this news – but it is sitting atop trendline support – should it fail to hold then we could see a swift move to $3200, if it holds, then I think it just churns right here. There is no reason for it to rally on this news at all.

Oil continues to kiss and tease the trendline at $62.60…..unable to penetrate it…..but here is the issue. The sense is that if these ruling holds – then that will benefit the global economy and trade and that suggests demand for energy will rise and that means that oil prices should rise as well. If not – then demand for energy stays constant (where it is) and oil prices will churn lower. Remember – OPEC+ has announced production increases in June so that brings more supply to the markets…. More supply when demand is constant should see lower prices, while more supply when demand is increasing should see higher prices.

European markets are higher on the back of all this news…..They too are loving the NVDA news and the Court news…. Markets across the zone are up between 0.25% – 0.6%.

The S&P closed at 5888 – down 32 pts…. Short term resistance is at 5968 – a level that is sure to be violated on the opening trade…..which leaves S&P 6000 vulnerable – a move up and thru 6000 will ignite a whole new level of excitement and optimism – short lived as it might be…and I only say that – because the excitement today will be met with caution tomorrow….as we tease the overbot level on the RSI scale. In any event – enjoy the excitement while it lasts!

Call me for a free (no obligation) portfolio analysis. 561-931-0190

Take good care,

kpolcari@slatestone.com

Sources:  Bloomberg, CNBC, Reuters, Wall Street Journal

Disclosure: The content provided in this material is designed for educational and informational purposes only, and it is important to note that it does not constitute personalized recommendations. This commentary is not nor is it intended to be relied upon as authoritative or taken in substitution for the exercise of judgment.  The comments noted herein should not be construed as an offer to sell or the solicitation of an offer to buy or sell any financial product, or an official statement or endorsement of Kenny Polcari or SlateStone Wealth.

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.

While considerable effort has been invested to ensure the accuracy and dependability of the information presented, we must clarify that we cannot guarantee the accuracy of third-party information. Our usual sources for third-party data include channels such as Bloomberg.

Creamy Garlic Chicken

Simple and delish…

For this you need chicken pieces (legs and thighs) skin on, bone in. a whole garlic bulb, olive oil, butter, 1 c of half and half, s&p, paprika, and chopped parsley.

Now begin by using an oven safe cast iron pan.

Preheat your oven to 350 degrees.

Season the chicken with s&p. Set aside for 10 mins.

In the pan – melt ½ stick of butter and a splash of olive oil.

Now fry the chicken on both sides until it gets nice and golden on both sides. Then transfer the pan to a 350-degree oven and cook for 20 mins.

While that is happening – grate the whole bulb of garlic using a micro plane grater.

Remove the chicken from the oven and place the chicken pieces on a plate – cover to keep warm.

Now put the pan back on the stove – add the grated garlic – cook for 4 mins…now add in the half and half – season with s&p and let it come to a boil. Now add the chicken back, dress with the parsley turn the heat to simmer and let it simmer for 5 mins.

When serving – place the chicken on the plate and top with the sauce.

Buon Appetito