ANDIKA BULLETin 23 FEB 2024

With USD$2 trillion market cap in its crosshairs, NVDA stock soared overnight, extending overnight gains after beating-and-raising again...

Adding the most market cap in a single-day ever - up $277BN...

...That's more than the entire value of BHP and more!

That is 2 Goldmans, half a JPMorgan, or a whole Netflix or Adobe added in a day.

MAG7 stocks added over $500BN today to a new record high, second only to 11/10/22's explosion higher driven by AAPL...

And all that market cap gain was driven by a $2.1BN 'guide-up' on Q1 revenue.

And as goes NVDA, so goes the entire stock market with Nasdaq leading the charge (up 3%) and the S&P up over 2%. Small Caps lagged with a mere 0.75% gain...

Elsewhere, US macro was positive with initial jobless claims tumbling and existing home sales rising (though admittedly less than expected).

But, the economy doesn't matter...

Higher yields don't matter...

Tumbling rate-cut expectations don't matter...

Rising bond volatility doesn't matter...

Valuations don't matter (Tech is now trading 7 turns richer than the market - the highest since 2005)...

Finally, bear in mind what the FOMC said in the Minutes yesterday

"Several participants mentioned the risk that financial conditions were or could become less restrictive than appropriate, which could add undue momentum to aggregate demand and cause progress on inflation to stall."

Well, financial conditions are very easy compared to Fed Funds...

...and US financial conditions are extremely easy relative to the EU and UK...

In other words, the higher NVDA goes, the tighter credit spreads compress, and the more the MOMO and FOMO funboys chase this insane market, the longer The Fed will sit on its hands and not cut rates. Of course, that assumes we get through March without a banking crisis.

Have a good weekend!

This information contains unsolicited general information only, without regard to any individual’s investment objectives, financial situation or needs. It is not specific advice for any particular investor or trader. Investment in the stock market involves risk.

This information may not take into account your investment objectives or financial situation, and you should obtain advice based on your own individual circumstances before making an investment decision.

This information is made available to you by ANDIKA Pty Ltd ABN 41 117 403 326, a licensed securities and derivatives dealer (AFSL # 297069).