Category: Daily in Portfolio Management

Today, Dave Ramsden, deputy governor of the Bank of England, released an important statement  about the inflation trend in the UK during the Association for Financial Markets in Europe meeting.  According to Ramsden, the general increase in the level of prices seems to be persistent, although  factors like services’ prices as well as salaries growth have experienced a remarkable decrease in the  last months. He also stated that it is vital to understand if this prices’ growth will continue for a period  of time that is sufficiently long before taking into consideration drastic cuts in BoE rates’ levels, which  are already high.   Macy’s (M) (+3.37% at 4:00 PM EST) just reported 2023 Q4 revenue and earnings. According to the  data of the Cincinnati based company, there was a decline in…

Google recently encountered significant backlash for its AI image generation tool, prompting a rapid reassessment and temporary suspension of the service: the controversy stemmed from numerous historical inaccuracies and questionable outputs produced by the tool, resulting in widespread criticism and a notable decline in Alphabet's shares, which fell almost 4% on Monday to $138.51 as of early afternoon. The image generator, integrated into Google's Gemini suite of AI models, permitted users to input prompts to generate images, however, it quickly drew attention for its flawed depictions, including instances of racially diverse portrayals within historically specific contexts. This debacle highlighted broader concerns within the AI industry regarding ethics and oversight. Margaret Mitchell, a prominent figure in AI ethics and former leader of Google's AI ethics group, emphasized the necessity for nuanced…

Despite the robust performance of the U.S. economy and the flourishing tech sector, the year 2024 has seen a surge in workforce reductions within the technology industry, raising concerns and signaling a significant shift in the landscape of employment and investment strategies. While indicators such as Nvidia's impressive earnings and the soaring Nasdaq index suggest a thriving tech environment, the reality for tech workers paints a starkly different picture. According to Jeff Shulman, a professor at the University of Washington’s Foster School of Business, these layoffs reflect the evolving dynamics of work and technology, as well as a shifting investor preference towards growth over profitability. Data from Layoffs.fyi reveals a concerning trend: the number of tech dismissals in 2024 has surpassed that of the previous year, with over 42,000 employees…

Palo Alto Networks (PANW) (Purchased 0.2 units @ $245.03) was up by around 5% on Friday after the California based firm fell following second quarter results. Revenue was in line with analysts’ estimates, reaching $1.98 billions, while EPS beated analysts’ expectations by far, attesting at $5.47. However, guidance was much lower than expected for FY 2024, which led to a sharp decline. The stock is now rising again due to the broader market rally caused by Nvidia’s sharp increase.  Warner Bros. Discovery missed analysts’ expectations for revenue and earnings due to poor advertising revenue and due to the streaming service company failing to provide free cash flow guidance for 2024. As a result of that, the company fell 12% in early trading on Friday. Going through the numbers, the company…

Feb 23rd, 2024 - Nvidia’s stock rallied 15% following a massive earnings beat, where they announced that their 2024 Q1 revenues would also be higher than previously expected. The stock also announced a forecasted 233% increase in revenues for 2025 Q1, which means the stock is forecasted to continue rallying and growing for the next year. Nvidia beating earnings propelled the market index to a 2% increase in price, meaning they now stand at $ 5087.03.  Supermicro (SMCI) also rose as a result of the strong earnings. The company rallied almost 34% given their tight correlation with companies in the artificial intelligence industry. The US company manufactures high quality servers specifically designed and produced for AI computing. The company's price targets range from $700 to $1300, meaning some financial institutions…

One of our portfolio holdings, Nvidia (NVDA) (Purchased 0.24 units @ $471.73) announced its  fourth fiscal quarter earnings that exceeded estimates. Nvidia announced earnings per share of $5.16 vs $4.64 and revenue of $22.10 billion vs $20.62 billion expected. Nvidia CEO Jensen Huang responded to investors' skepticism about the sustainability of growth. Huang said the projections for the growth seem positive due to the demand for the company’s GPUs. The demand for these GPUs is driven by generative AI. In the extended trading session, Nvidia shares increased by almost 10% following the announcements. Amazon (AMZN) is set to join the Dow Jones Industrial Average on Monday, February 26th. The e-commerce company is replacing the pharmacy company Walgreens Boots Alliance Inc (WBA) One of our portfolio holdings, Palo Alto Networks (PANW)…

Feb 20th, 2024 - After the UK inflation rate in January 2024 reached 4.00 %, Goldman Sachs (GS) (+0.02% at  4:00 PM EST), in a research note, asserted that there is a high probability that BoE will delay  interest rate cuts from May to June, with subsequent stronger interventions during the final  semester of 2024. The US investment bank believes the Central Bank will introduce five consecutive 25 basis point cuts, determining a decrease in interest rates from 5.25% to 4%.  Also, a terminal rate equal to 3% should be reached by June 2025. As reported by many Goldman Sachs analysts, the main reasons behind this delay are the surprising strength of the UK labor market and the wage growth currently ongoing, but they also predicted a remarkable reduction of…

Feb 19th, 2024 - In a recent turn of events, shares of Nintendo took a significant hit, following reports suggesting a delay in the launch of the highly anticipated Switch 2, the next iteration of its flagship gaming console. The company’s stock in Japan closed 5.84% lower amidst growing concerns regarding the company's future prospects. According to a report by Bloomberg over the weekend, sources familiar with the matter revealed that Nintendo had informed game publishers about the potential delay of the Switch 2 until the early months of 2025; this news comes as a disappointment to both investors and gaming enthusiasts who were eagerly awaiting the release of the next-generation console. Initially targeting a release toward the end of this year, Nintendo reportedly warned game makers that the launch…

Wall Street is witnessing a seismic shift as Big Shale emerges as the new powerhouse in the energy sector. The recent $26 billion merger between Diamondback Energy Inc. and Endeavor Energy Resources LP marks a watershed moment, reflecting a significant departure from past skepticism towards the shale sector. This monumental deal is just one in a series of record-breaking transactions, totaling approximately $250 billion in US oil and gas deals over the past year. Diamondback's move to acquire Endeavor has captured investor attention like never before. The stock market responded with an immediate 11% surge in Diamondback's stock value, signaling resounding approval from investors. This merger frenzy not only consolidates fragmented wildcatters but also signifies a broader industry push towards efficiency and profitability over sheer output growth. The shift towards…

On Friday, Coinbase stock surged 16% after posting its first profit in two years. The largest US cryptocurrency exchange has reported significantly better than expected earnings thanks to growth in transaction volumes. The company posted for its first quarter an adjusted EPS of $1.04, better than the $0.02 EPS forecasted by Wall Street analysts. Quarterly results surged with transaction revenue up 64% due to Bitcoin spot ETF approvals and anticipated macroeconomic improvements in 2024. The Vice President of Investor Relations, Anil Gupta, dismissed concerns about fee compression, noting a surge in trading volumes to $154 billion in Q4, surpassing analysts' projections by far. Coinbase shares have shown bullish momentum, bouncing off the 50-day moving average, with attention on the $210 upper trendline. The streaming service provider Roku lost 22.3% of…