Earnings should return to growth in 2024 across all major global markets after a difficult 2023, led by emerging markets
All major regions are on track for earnings declines in 2023, creating easy comparisons for 2024. Source: Gina Martin Adams, Bloomberg
Nvdia in a virtuous cycle?
As highlighted, by Kakashii, Nvidia is somewhat fuelling their own growth by investing in AI startups which will purchase their AI chips! Indeed, Nvidia is one of generative AI’s most active investors. Let's review some of the deals the chipmaker is backing. Behind the scenes, Nvidia has been investing heavily in generative AI companies. The chipmaker’s overall deal activity has climbed dramatically in 2023 (see chart below)
The growth rate of capital being poured into retail money market funds (MMFs) is at its highest level in several decades
Retail MMFs recently surpassed $1.6 trillion; a record high. Source: Koyfin @KoyfinCharts
Visual Capitalist's Marcus Lu created the following chart, visualizing GDP growth forecasts from the IMF’s October 2023 World Economic Outlook
Unsurprisingly, many of these countries are located in Asia and Sub-Saharan Africa—two of the world’s fastest growing regions.
US Treasuries were bid this week due to the search of "safe havens" on the back of Middle East turmoil
However, ugly auctions on Thursday came as a harsh remainder of the unfavourable supply/demand situation faced by US Treasuries. On the supply side, there is a tsunami of notes and bonds that is going to flood the market. And it is occurring while the Fed, under its QT program, is letting about $60 billion a month in maturing Treasury securities roll off the balance sheet without replacement. With the Fed reducing its holdings, that tsunami of notes and bonds being issued will have to find buyers, and those buyers will have to be enticed by yields. Unless inflation and growth slow down meaningfully, yields are unlikely to drop aggressively. Source: www.wolfstreet.com, Bloomberg
This chart explains by itself why the market mood has been deteriorating over the last few weeks:
Growth forecasts moving down / world inflation going up. What else? Source: www.zerohedge.com, Bloomberg
This chart from Morgan Stanley shows that growth stocks are missing in Europe. That's why European indices are trading like value stocks
Source: Morgan Stanley, HolgerZ
The generative AI software market is forecast to rapidly grow from $1.5B in 2022 to nearly $280B in 2032
Representing a 69% CAGR – driven by AI assistants and workload infrastructure software, which could contribute $160B combined. Source: Bloomberg, Beth Kindig Potential winners? $META $ADBE $NVDA $MSFT (not an investment recommendation)
