🖥 All eyes on Nvidia

and homes getting expensive

Good morning investors! The market yesterday was mixed, and today is all about Nvidia.

Today we cover:

  • Homes are getting expensive

  • Nvidia to announce earnings today

  • Investing in war times

📊 Economy and News 

Home prices hit record high

Despite rising mortgage interest rates, home prices reached an all-time high on the S&P CoreLogic Case-Shiller U.S. National Home Price Index.

For the three-month period ending in June, home prices across the country were 5.4% higher than in June 2023. While this marked a record level for the index, the annual increase was lower than May's 5.9% rise.

The index's 10-city composite saw a 7.4% annual increase, a decrease from the 7.8% growth recorded the previous month. Similarly, the 20-city composite rose by 6.5% year-over-year, down from a 6.9% increase in May.

Breaking it down: New York experienced the largest annual increase among the 20 cities, with home prices rising 9% in June. San Diego and Las Vegas followed closely, with yearly gains of 8.7% and 8.5%, respectively. In contrast, Portland, Oregon, recorded the smallest growth among the top cities, with just a 0.8% increase in June.

Rate: The average rate for a 30-year fixed mortgage began April slightly below 7%, then surged to 7.5% by the month's end. Rates remained above 7% before dipping back below that threshold in July. Currently, the 30-year fixed rate is hovering around 6.5%.

Expectations: Although home prices are expected to ease slightly month-to-month as fall approaches, driven by seasonal trends and increased inventory, they are unlikely to see a significant decline. Prices are still anticipated to remain higher than they were last fall.

Global hits:

Interesting: IBM is cutting more than 1,000 jobs in China, as geopolitical tension between Beijing and Washington prompts many global companies to reassess their future in the world’s second-largest economy.

Good to know: Copper prices near six-week high as one strategist says the ‘worst of the correction is over’.

📈 Stocks

S&P 500 5,625.80 (+0.16%)
DJIA 41,250.50 (+0.024%)
NASDAQ 17,754.82 (+0.16%)
BRENT CRUDE 79.81 (-1.99%)
* Prices as of Aug 28th, 12:20 AM UTC

All eyes on Nvidia

As the leading beneficiary of the artificial intelligence boom, Nvidia's market cap has surged nearly ninefold since the end of 2022. However, after reaching a record high in June and briefly becoming the world’s most valuable public company, Nvidia saw its value plummet by nearly 30% over the next seven weeks, losing about $800 billion in market cap.

Currently, the stock is rallying again, now within about 6% of its all-time high.

As the chipmaker prepares to report quarterly earnings today, its stock volatility is a major focus for Wall Street. Nvidia’s report comes weeks after other tech giants, like Microsoft, Alphabet, Meta, Amazon, and Tesla, completed their earnings announcements, with many of them mentioning Nvidia as they invest heavily in its GPUs to train AI models and handle massive workloads.

Investors are keenly watching for any indications that major cloud providers might be shifting their demand for AI processors.

Nvidia has been the primary beneficiary of the AI surge and is expected to post a fourth consecutive quarter of triple-digit revenue growth.

Wall Street will be closely watching the forecast as year-over-year comparisons become more challenging. Analysts predict another quarter of triple-digit growth, though at a slower rate of 112%, bringing revenue to $28.7 billion. Going forward, year-over-year comparisons will become more difficult, with growth expected to decelerate over the next six quarters.

Shocking: Mark Zuckerberg says Meta was ‘pressured’ by Biden administration to censor Covid-related content in 2021.

Good to know: Care.com to refund $8.5M to customers for its ‘deceptive’ practices, FTC says. On the other hand, Buy now, pay later firm Klarna has swung to first-half profit ahead of IPO.

Controversial: Shares of Temu parent company PDD plunge almost 29%; ‘too large a correction’, says analyst. On the other hand, Walmart has recalled Great Value apple juice sold in 25 states due to elevated arsenic levels.

💵 Personal Finance

Top stocks to consider during war times

In times of geopolitical uncertainty and conflict, financial markets often experience heightened volatility, making investment decisions particularly challenging.

While many sectors may suffer, certain stocks have historically demonstrated resilience or even growth during periods of war. These companies often operate in industries that benefit from increased government spending, shifts in global supply chains, or heightened demand for specific goods and services.

For investors seeking to navigate the complexities of wartime economies, here are some stocks worth considering, each with unique attributes that could position them as strategic additions to your portfolio.

  • Northrop Grumman, one of the most well known weapons and military technology producers. The company has chosen not to apply to be prime contractor for the U.S. Air Force's Next Generation Air Dominance program but it still has a lot going in its favor.

  • Rocket Lab, a fast growing aerospace and defense company, is set to succeed. Specializing in launch services, spacecraft engineering, and spacecraft management solutions, it has been in the news for some bad reasons, including a failed rocket launch, but it can still be a good investment given future prospects.

  • This might come as a surprise but Boeing belongs here as it is not just a commercial aircraft supplier but also one of the largest U.S. defense contractors. The stock is waiting to take off.

  • Highly exposed to US government cybersecurity spending, Leidos is a horse worth betting on. It offers technology services and solutions to the defense and intelligence industries and is predicted to double in the next two years.

💰 Be a Better Investor

“Buy land, they’re not making it anymore.”

Mark Twain

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.