⛳Steady Uncle Powell🌴

The Fed is eyeing half-point rate hikes for the next few meetings, and the market is okay. After all, this had been communicated and the FOMC minutes aligned with such realisation. 

Investors gave their cheer to the minutes as it missed signs of a more aggressive hawkish tone that has often been spoken in public. A clear indication is that at 3 am Singapore time or 3 pm in New York time, the Dow had risen by 0.9% after laying flat like Snorlax for the whole period of trading. 

Analysts are now viewing on the horizon that the Fed might be seeing a possibility of a downward trajectory on inflation and that labour market imbalance will start to ease. This might give the Fed some rooms to breathe, and perhaps we might even have a chance to shift gear back to the 25 basis point historical norm rate hike. 

Nonetheless, suppose the inflation situation is not improved after the July FOMC meeting, Pika World expects the Fed to continue on the 50 bps rate hike, and the narrative of a hotter 0.75% rate hike might be on the card again. 

Moreover, the minutes did not talk about the expansion of reducing the Fed balance sheet, which is a critical sign for the market to stabilise. After all, this would tighten monetary conditions further and cause a brake on economic expansion. 

💻Nvidia: Take a drink from the dispenser🔦

After a hot season last year, it’s time to chill and take a refresher look at the latest earnings result. It wasn’t all bad; after all, Pika World had expected a slowdown in PC sales and corporate spending globally. 

The softer guidance sent the stock down in the after-hours trading. The reduction in business from Russia and manufacturing woes in China hammered the performance. In March, Nvidia had already advised investors that they were halting all sales in Russia. This will impact the end-market sales in the gaming sector, especially so for premium graphic chards. The issues in China also worsen the supply and demand of their products in areas where there is a shutdown. 

We would have expected a more dramatic sell down in after-hours. However, it appears moderate as the company results were still ahead of expectation, as revenue hit a high of $8.29 billion from a year ago, much higher than its estimate of $8.1 billion. 

Even as there is a challenging macro-environment, the CEO conveyed confidence in its data centre and gaming sector, which bodes well for stabilising the business. Also, the company had expanded its stock repurchase program to $15 billion. Nvidia had already purchased $2 billion of stocks and returned a dividend sum of $2.1 billion for the quarter. 

Pika World will be buying a tiny sum in this pullback.