The Buzz on Business for June 27th 2024

Back in 2007, oh my it’s hard to believe that was seventeen years ago, back in 2007 we bought a new computer and we wanted to have multiple monitors. Having two or three monitors was much less common then, than it is now and damnit, we wanted three monitors on our new computer. So, the sales rep sold us a computer and two graphics cards.

The manufacturer of those graphics cards was a company we had never heard of. It was NVIDIA. In 2019—hard to believe that was five years ago—we bought another new computer, and we’ve still got it, and it came with an NVIDIA Quadro P620 Graphics Processing Unit. We’d heard of NVIDIA by then.

In 2019 NVIDIA stock was trading under $4.00 a share, on a split adjusted basis. Four dollars.

In 2007, again split adjusted, it was around $0.30.

NVIDIA stock closed yesterday at $126.40 per share.

This represents a compounded annual percentage rate return, since 2007, of over 59%. Annually.

Sometime last year we moved our computer and in so doing, plugged the monitors into the wrong place—not into our NVIDIA graphics card. When this was pointed out to us—by an NVIDIA customer service rep, it was like we had a brand-new computer!

And not only has this company achieved spectacular returns from selling and servicing fantastic products that people want and need, it seems to us that the entire stock market is now taking its cues from NVIDIA. If the stock is up, the NASDAQ and S&P, of which NVIDIA is a member, have good days. If it’s down, the market is down. Yesterday, NVIDIA was more or less flat, and you guessed it.

You know, it’s fashionable—I guess it’s always been fashionable—to criticize and condemn extraordinary success, of which, NVIDIA is surely an example. But nobody is forced to do business with the company. Nobody is forced to work there. Nobody is forced to buy its shares.

Seventeen years ago, we’d never even heard of this company. We’d never even heard of a Graphics Processing Unit. Now, we’re not sure we could get along without them.

Stock Market Report

Another inconclusive day for stocks on Wednesday. Volume rose but declining stocks led advancers, once again.

• The Dow Jones Industrial were up just sixteen points, basically flat, and they closed at 39,128.
• The S&P 500 was up nine points. That’s a bit under two-tenths of a percent and they closed at 5,478.
• The NASDAQ Composite had a slightly better go of things yesterday. It was up eighty-eight points, that’s about one half of one percent and it stands at 17,805.
• Not so much the Russell 2000. It was off two-tenths and closed at 2,018, down four points.

Bond Market Report

An odd day in the bond market as well. We preface our report here by noting that the to sources from which we get our data differed on Wednesday’s results, by a fair amount.

• So, the yield on the 2-year treasury was basically flat. It was up less than half a tick and it closed at 4.751%
• The yield on the 20-year was up strongly. It closed at 4.569% up over eight basis points.

Oil, Gold, and Bitcoin

• Oil was up a minuscule $0.12 and a barrel now changes hands at $80.83.
• Gold was down $21.70 and a troy ounce will now set you back $2,310.20.
• Bitcoin was likewise down. It closed at $60,991.41 off $1,043.18

Big Finish to the Week from the Econ Calendar

Mixed news from the housing market Building Permits exceeded expectations but came in lower than last month and they’ve been in a bit of a downtrend lately.

New Homes Sales were also released. They missed expectations and came in below last month.

A bunch of economic data is released today:

• Initial and Continuing Jobless Claims
• Durable Goods Orders
• Gross Domestic Product for the first quarter
• A bit more housing data, among other reports

But all eyes are on the Personal Consumption Expenditures Index which rolls out today and tomorrow. Expectations are that Core PCE prices in the first quarter rose at a 3.6% annual rate. We’ve had some good news on inflation in recent weeks. Let’s hope it continues.