CWS Market Review – February 23, 2024
“Central banks are divided in four categories: the bad ones, like the Federal Reserve, the very bad ones, like the ones in Latin America, the horribly bad ones, and the Central Bank of Argentina.” – Javier Milei
Wall Street was gobsmacked this week by the phenomenal earnings report from Nvidia. The AI frenzy helped the chip giant smash Wall Street’s forecasts. Nvidia’s net income soared 769%.
On Thursday, shares of Nvidia jumped 16%. That works out to a one-day increase in market value of more than $275 billion, which is a record for any company. Nvidia is now the third-most valuable company in the world, trailing only Microsoft and Apple.
The Nvidia news was enough to help lift the S&P 500 to a new all-time record high on Thursday. The index had its single-best day in more than 13 months. The gains, however, were far from evenly spread. On Thursday, the S&P 500 Growth Index rallied 3.3%, while the S&P 500 Value Index gained 0.70%. Thursday was all about growth.
Even the Nikkei 225 got in on the action. The Japanese market index made a new high for the first time in 34 years. The Nikkei finally surpassed its peak from December 1989.
On Wednesday, the Federal Reserve released the minutes from its most recent meeting. The minutes indicated that FOMC members are very cautious about cutting interest rates too quickly. The battle against inflation may not be over just yet. Traders are nearly evenly divided on the odds of a rate cut in June.
In this week’s issue, I’ll go over our Buy List earnings reports from this week. Intuit, the TurboTax people, beat earnings by more than 14%. McGrath RentCorp, which is being bought out, raised its dividend for the 33rd year in a row. We also got a nice 11% dividend hike from Thermo Fisher.
Thursday’s market was good to us as well. We had several new highs on our Buy List: Abbott Labs, Amphenol, Fiserv, Heico, ICE, Otis, SAIC and Stryker (already an 18% winner YTD). Later, I’ll preview the Buy List earnings reports on tap for next week.
This was a busy week, so let’s jump right in.