The Buzz on Business for February 23rd, 2024

It has become apparent to us here at the Buzz on Business that the Artificial Intelligence revolution, which we see all around us, is analogous to the internet revolution of the late 1990s. It is analogous but with one very important difference. In the 90s, internet stocks soared, even though they often had no profits. Sometimes, not even sales!

Markets moved because some analyst working in a basement office in Lower Manhattan mentioned some stock on TV. Today’s revolution has real, substantial companies producing amazing products with incomprehensible technologies and achieving legendary sales and profit growth. This is not just AI hype. Artificial Intelligence is real! NVIDIA is real!

While all new technologies are disruptive, we all stand to benefit. If we are investors, we already have.

Stock Market Report

We said yesterday that a sense of relief would come over the markets on Thursday and that NVIDIA would drag the broader market higher. We were right!

• The Dow Jones Industrial Average, of which NVIDIA is not a member, was up an astonishing 457 points. That’s 1.2%, and it closed above 39,000 for the first time, at 39,069.
• The S&P 500 was up over 2%, 105 points. And it closed at 5087, a new all-time high for the S+P.
• The tech-heavy NASDAQ composite was up an extraordinarily 3 percent, 461 points, and closed above 16,000 at 16,042.
• The small caps were mostly left out of the party for some reason. The Russell 2000 was up just 6six-tenths of a percent. A pretty good day any other day, and it closed at 2009.
• Regular listeners to this podcast know we follow the SOXL, a Philadelphia Semiconductor Index fund with three-to-one leverage. It was up 15% on the day, a pretty good year.

Bond Market Report

Interest rates were mixed.

• The yield on the 2-year treasury was up six basis points, and it closed at 4.712%.
• The 20-year was down; it closed at 4.574%, off 3 ticks.

Oil, Gold, and Bitcoin

• Oil was up 32 cents, and a barrel now changes hands at $78.29.
• Gold was off $3.60 and closed at $2,031.
• At 4:00 PM Eastern Time, Bitcoin stood at $51,698, up 255.00.

Earnings Season is Above Expectations So Far

Twenty-two public companies reported earnings during the day on Thursday. Only six missed expectations, and those didn’t miss by much. We’ve dug into the results this earnings season thus far and the news is very, very good, indeed. If we can just get a slow news day here sometime, we’ll update our listeners on all of that.

Excellent Economic News

The labor market continues to be strong; both initial and continuing jobless claims came in well below expectations. Existing home sales came in above expectations. The Standard and Poor Purchasing Managers Index was mixed. There are actually three numbers in the complex. Still, the one we care about, the US Manufacturing Purchasing Managers Index for February, came in strong, above expectations and above last month’s number.

Chips Up, Intel Down

We reported on Nvidia’s earnings yesterday, but they’re worth repeating. The company earned $5.16 a share in the fourth quarter versus expectations of $4.61. And they did that on revenue of $22.1 billion versus expectations of $20.55 billion. Perhaps more interestingly, NVIDIA raised guidance for the first quarter, the quarter we are in, and the rest of the year.

Wall Street partied like it was 1999. One exception was Intel, another chip maker. It was down over 1% on the day. That was more than a little odd when the semiconductor index was up 5%