This is the tale of one of the most consequential proposed U.S.-international deals in recent history. Although both Presidential candidates were opposed to it on the campaign trail, its supporters hope that the rhetoric will cool now that the election is over, and the deal will receive final U.S. regulatory approval by year-end.
Recently featured on CNBC TV, Paul Meeks shares his optimistic outlook on technology giants like Nvidia and Micron. Despite recent market turbulence, Meeks believes Nvidia's growth prospects remain strong, identifying current conditions as a potential buying opportunity. He explains that although fears have gripped the semiconductor sector, Nvidia’s future looks incredibly promising, supported by robust earnings projections. Watch the video for full details.
Welcome back to "Tech Tune Up with Paul Meeks"! In this episode, recorded on September 4, 2024, Paul dives into the latest tech news with a focus on Nvidia. He'll also discuss AMD's recent $5 billion acquisition of ZT Systems, a server vendor, highlighting the industry's race to catch up with Nvidia in the AI accelerator chip market. Don't miss Paul's insights and answers to viewer questions throughout the show!
The Federal Reserve is preparing for its first interest rate cut, which could impact the tech sector. On one hand, lower rates can lead to higher valuations for tech stocks. On the other, the rate cut signals concerns about a potential recession.
Paul Meeks is on CNBC’s Squawk Box to discuss Nvidia’s growth and the post -report. Watch here for the full interview.
So what I'm worried about is, at least not yet, have I seen enough real, what I call needle moving use cases for AI, because what I'm a little bit worried about, not for all companies, some companies, obviously will be huge beneficiaries, but for many companies, I believe AI will be a feature, not a product, not a product platform.
In case you have been living under a rock, “AI” is artificial intelligence. The bulls think it will lead to the next industrial revolution and that it may even be bigger than the Internet. The bears say, “where’s the beef?” and doubt whether the billions now being spent on AI infrastructure will ever really generate an adequate ROI (return on investment).
So what I'm worried about is, at least not yet, have I seen enough real, what I call needle moving use cases for AI, because what I'm a little bit worried about, not for all companies, some companies, obviously will be huge beneficiaries, but for many companies, I believe AI will be a feature, not a product, not a product platform.
Here's a company, as you've heard me say before, hasn't grown for about a year and a half. And right now the stock is trading at 228, an all time high, egregiously expensive, priced well over the highest price targets by Wall street analysts. And it's a bet the ranch scenario on when they put AI on board on their iPhone, you will immediately upgrade your phone and we will know, because this is the ultimate test, not just for Apple, but for AI features. We will know at Christmas because they will announce the iPhone 16 with a lot of fanfare, and then they will actually do that in the fall, and then they'll ship at Christmas.
The jury is in for the first half of 2024 and the market did just fine, actually better than fine given the nastiness here and abroad. The S&P 500 was +14.5 percent through June and the tech-laden NASDAQ Composite was +18.1 percent. It continues to be a tech world and we’re just living in it; and AI (artificial intelligence) is still driving the sector.
Paul Meeks, CFA, CAIA and the roundtable Berna Barshay, Jeff Macke, Benjamin Brey, CFA, and Russell Young debate Ben's analysis on the employment data and Jeff noting mixed signals from retailers like Five Below $FIVE and Walmart $WMT.
As we chart the course through the ever-evolving economic landscape, our vision for 2024 is anchored in both empirical analysis and the discerning judgment that comes with years of market experience. The year ahead is poised with unique opportunities, tempered by strategic challenges that require our astute attention.
Market Outlook 2024:
S&P 500: We project an ascent to 5,100, marking a 7% increase, spurred by an improving economic milieu and evolving market dynamics.
Russell 2000: Anticipated to surge 20% to 2,404, spotlighting untapped potential within the small-cap sector.
Market Perspective:
Our assessment of the S&P 500, currently at 4,715, aligns with a moderate yet steady climb, reflective of an economic recuperation phase and a momentum shift from 2023's recovery. The NASDAQ's impressive ascent this year and the Russell 2000's stagnation over the past three years signal a realignment towards smaller cap stocks, which we believe will spearhead the next bullish phase.
Headwinds:
• Earnings Growth Moderation: The expected slowdown in earnings growth may usher in periods of heightened volatility.
• Valuation Pressures: The current pricing of large-cap equities, particularly in the tech sector, may constrain further gains.
• Consumer Expenditure: The deceleration in post-pandemic consumer spending could temper earnings projections towards the latter half of 2024.
• Interest Rate Landscape: Persistent high rates pose a tangible threat to corporate profitability and market liquidity.
• Geopolitical Risks: While unlikely, the potential for conflicts, such as China's aggressive posturing towards Taiwan, cannot be ignored.
Tailwinds:
• Monetary Policy Shifts: An anticipated easing of interest rates by the Fed as early as March 2024
could catalyze market buoyancy.
• Geopolitical Equilibrium: Stabilization in global hotspots could enhance market confidence.
• Technological Advancements: AI's expansion is expected to contribute significantly to efficiency and earnings growth.
• Housing Market: The ongoing demographic shift towards remote work is poised to sustain housing market vitality.
• Political Stability: A lull in legislative turbulence may provide a conducive environment for corporate expansion.
Opportunities In 2024:
Small-Cap Stocks: We identify compelling valuation in small-cap stocks, which have lagged in recent market rallies.
Our strategy for 2024 will blend a curated selection of small-cap equities with a continued emphasis on premier-quality companies. We intend to capitalize on sectors that resonate with the current economic climate, focusing on domestic manufacturing, supply chain robustness, and infrastructural development.
In navigating these waters, we remain steadfast in our commitment to prudence, patience, and the courage to pursue the path less trodden. Building wealth is an expedition, not a sprint, and our dedication to guiding you towards your financial aspirations stands unwavering.
We extend our heartfelt gratitude for your continued trust and partnership
In the complex process of portfolio management, Harvest Portfolio Management has woven a rich history of more than 35 years, drawing inspiration from the fiduciary principles of yesteryear. During the Middle Ages in England, the stewardship of the church played a pivotal role in safeguarding the financial health of the noble class, emphasizing preservation and growth in parallel — a practice we hold dear in our portfolio construction approach today.
Initial Overview
Our journey begins with a holistic analysis of your current holdings and the governing documents that dictate your financial pathway. This stage is akin to understanding the lay of the land before sowing the seeds for a fruitful harvest. We delve into the details of your financial aspirations to build a foundation grounded in your unique circumstances and objectives.
Risk Assessment
Just as the stewards of the past would cautiously manage the estates entrusted to them, we consider your risk tolerance seriously. We navigate the fine balance between risk and reward, ensuring your portfolio aligns harmoniously with your comfort level, facilitating a journey of financial growth that is both prosperous and secure.
Time Horizon
Our portfolio construction process takes into account the ebbs and flows of life’s journey. It encompasses significant milestones such as tuition payments, retirement needs, gifts, and philanthropy, envisioning a financial roadmap that mirrors your life’s phases and cherished objectives. This practice is akin to ensuring the land nurtures various crops for diverse seasons, yielding a rich and varied harvest year after year.
Asset Allocation
With a timeline in place, we arrive at a juncture where we delineate the asset allocation. The essence is to foster a bountiful yield by distributing assets judiciously between equities and fixed income, charting a course that balances growth potential with risk management, while always staying true to your life’s script.
In-depth Research
Every potential stock and bond is then meticulously analyzed, taking a leaf from the detailed inventories maintained in the past, where every asset was scrutinized for its potential risk and return. Our contemporary approach integrates a deep analysis of quality, current valuation, and future outlook, ensuring a robust and fruitful portfolio grounded in fundamental research and foresight.
Diversification and Exposure
As we arrive at the final stage of construction, we draw upon the vast universe of opportunities that the financial landscape offers, creating a relatively stable base of diversified assets. Each security, representing an individual opportunity and risk, is fine-tuned to maintain balance, with a disciplined approach limiting exposure to any single entity to and initial allocation of 2% or less. This strategy, mirroring the diversified crops of an estate, ensures a healthy, risk-mitigated growth.
Conclusion
Our portfolio construction narrative is one enriched with time-honored practices, a journey we have curated meticulously for over 35 years. At Harvest Portfolio Management, we see beyond numbers, envisioning a portfolio that is a living entity, a reflection of your aspirations and a guardian of your financial well-being, a stewardship rooted in history, nurturing your financial growth with a vision that spans generations.
