Lombard's Dario Perkins, September 2:
It is a sad state of affairs (for economists, anyway) when the latest earnings report from a single stock name is a much bigger deal than the US CPI or non-farm payrolls. But that was the situation we found ourselves in last week, so it's hard for me to write my Monday Chart Story on anything else.
The question is whether I can add any value to the coverage. I'll let you be the judge of that...
1/6Our strategy team certainly believes I can add value. Unfortunately, that value comes from being a reverse indicator. Every so often, they ask me for my views on NVIDIA, presumably so they can advise the EXACT OPPOSITE . After spending 18 months writing sceptical takes on AI and forecasting a big rotation (remember the Tangible 20s?) I capitulated in July (at the peak) and now own the stock PA. Last week I found myself watching the NVIDA release live on CNBC, which in itself is revealing.
2/6As an economist - not a market strategist - my first “hot-take” on NVIDIA comes from many years watching macro surprise indices. Those things are mean-reverting, because it is impossible to keep surprising analysts in the same direction. Eventually, the consensus will catch up and the spread narrows (or even overshoots). So it should be no surprise (pun intended) that NVIDIA beats are also mean reverting, something that was lost on a lot of the media coverage last week.....
....MUCH MORE
