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Tech Stocks Recapture their Old Mojo as Important Numbers Emerge
U.S Stocks ended mixed on Thursday, with tech stocks leading the way. Nvidia Corp. (NVDA) soared 24%, now sitting squarely as the 5th largest public company in America right behind the trillionaire club. These gains are yet another sign that investors are willing to invest in promising tech stocks, despite the growing worries of a US debt default and impending recession, high interest rates, inflation and a slowing Chinese economy.
Marvell Technology Inc. (MRVL) Beats Earnings, Costco Wholesale Corp. (COST)... Not So Much.
This sounds familiar: Investors can’t seem to get enough tech in their portfolio these days and after Nvidia’s big move, we’re getting another big tech move with Marvell Technology up almost 17% after hours on only a small beat and in line with consensus estimates for Q2.
It seems only one thing is driving this market; AI as Marvell projected that AI revenue in fiscal 2024 will “at least double” as it becomes a key growth driver.
Investments in tech are also helping solar power, which is on par with overtaking spending on oil production for the first time according to the IEA.
Meanwhile Costco missing earnings, tells a completely different story, one where the middle class is getting squeezed while inflation takes its toll. At least the hot dogs are still $1.50
Key Economic Data
The government’s two main measures of U.S. economic activity diverged in the first quarter. GDP rose at a revised 1.3% annualized pace in Q1, up from previous estimates. However, a gauge of the income generated and costs incurred from producing goods and services – gross domestic income – decreased 2.3% after falling 3.3% in Q4. The average consumer is losing as still-high inflation and tighter credit conditions weigh on the economy
Once again, a deal has not been reached to raise the debt ceiling as Republican and White House negotiators continue to work behind closed doors. Leaked information claim the two sides have narrowed differences, but as we discussed yesterday with Fitch’s potential downgrade, damage has already been done.
Data releases set for today include: U.S. consumer income, wholesale inventories, durable goods and University of Michigan consumer sentiment.