NVDA made a new high last week. It simply soared as it reported earnings and it is now just about the only stock people are talking about. It’s move, of course, helped push the S&P 500 up to a new 52-week high. How much longer can NVDA keep going up at this pace?
We’ll see.
A lot of people have made comparisons with NVDA and CSCO back in 1999, myself included, but now it reminds me of when silver went up in 2011, although the move in early January is similar to the breakout that CSCO made in November of 1999.
A lot of big money investors are cashing out.
Bill Gates sold off all of his “magnificent seven” big cap tech stocks holdings. He sold all of his shares in Apple, Google, Amazon, Meta, and yes NVDA.
This is according to his recent SEC filings that includes his holdings dated 12/31/2013.
Here are some of his trades.
You can find the complete Gates report here.
Of course, I’m sure there are some Robinhood traders who think he is a fool for selling all of these big cap tech stocks like he doesn’t know anything about the sector and they do, much as they thought they knew about Gamestop in 2022 or crypto coins.
Meanwhile, shares of NEM crashed last week as the company announced that it was cutting its dividend almost in half in order to pay off its debt load more quickly.
Gold mining stocks have been performing poorly for over a year now and have been lagging the performance of gold, which has been doing well during this rate hiking cycle, trading in a range, and now holding above what is becoming solid support in the $1980-$2000 range.
What is hurting gold stocks?
I talked about that with Jordan Roy-Byrne of thedailygold earlier this month in a Youtube interview I did with him.
He thinks it is higher costs, from rising energy prices and inflation, hurting the profitability of mining operations.
He believes that once gold goes above $2100 that the margins for mining will become more profitable and the stocks will soar.
But, gold isn’t likely to get above $2100 until the Federal Reserve really starts to lower interest rates.
And despite all the rate cut talk, right now, there is simply no justifiable reason for the Federal Reserve to do that.
There is no recession and inflation has not gone away.
In fact, the continued stock market speculation, and now growing mania in NVDA, may be evidence that interest rates are not too high at all, and should not be reduced.
The day will come when the next recession emerges and many things that seem normal now, to those heavily trading these markets, will change overnight. But I do not know if that will happen in the second half of this year or sometime next year.
Earlier this month I talked with Scott Horton of The Libertarian Institute about my views on the economy and markets.
-Mike
