Equities Look to Bounce Back
On the radar: Nvidia's GTC conference and the Fed's next policy meeting
Equities are shrugging off pre-market declines from Adobe (ADBE) and Ulta Beauty (ULTA) in a bid to recapture some of yesterday’s decline. Despite that move, all major stock market indices save for the Russell 2000 are on track to put in another positive week. Investors should be mindful of the leading nature of that small-cap index for the overall market as they get ready for Nvidia’s (NVDA) upcoming GTC developer conference that begins on Sunday and features a keynote from CEO Jensen Huang on Monday, February 18.
On Wednesday, the Fed will conclude its latest policy meeting, and while the market expects no change in policy, the market will lean into Fed Chair Powell’s comments and the updated set of economic projections. Given this week’s February inflation data, odds are high that the Fed will stick to its “need to see more progress on a sustained basis” mantra as it lifts its 2024 GDP and inflation forecasts. The subliminal message is shaping up for rate cut timing to move into 2H 2024, something that could lead to a modest resetting of GDP and earnings expectations for 2024.
For more, be sure to read our Daily Markets column published each day by Nasdaq.
Model Musings
CHIPs Act
“The US plans to award more than $6 billion to Samsung Electronics Co., helping the chipmaker expand beyond a project in Texas it has already announced, according to people familiar with the matter. The money from the 2022 Chips and Science Act would be one of several major awards that the Commerce Department is expected to announce in coming weeks, including a grant of more than $5 billion to Samsung’s Asian rival, Taiwan Semiconductor Manufacturing Co…” Read more here
Data Privacy & Digital Identity
“A French government department - responsible for registering and assisting unemployed people - is the latest victim of a mega data breach that compromised the information of up to 43 million citizens.” Read more here
“The ransomware attack on EquiLend in Jan. 2024 has resulted in customer data theft, the financial giant has confirmed in a data breach notification letter to its customers earlier this week. "We are writing to inform you of a recent data security incident that involved your EquiLend payroll and other human resources information, including your name, date of birth and Social Security number," the New York City-based company said.” Read more here
Digital Infrastructure & Connectivity
“Over the past year, electric utilities have nearly doubled their forecasts of how much additional power they’ll need by 2028 as they confront an unexpected explosion in the number of data centers, an abrupt resurgence in manufacturing driven by new federal laws, and millions of electric vehicles being plugged in… Many power companies were already struggling to keep the lights on, especially during extreme weather, and say the strain on grids will only increase. Peak demand in the summer is projected to grow by 38,000 megawatts nationwide in the next five years, according to an analysis by the consulting firm Grid Strategies, which is like adding another California to the grid.” Read more here
EV Transition
“A GOP bill that would bring Wisconsin one step closer to building a network of fast-charging stations for electric vehicles has cleared the state Legislature… Currently, only utilities can sell electricity by the amount of power used, also known as charging by the kilowatt-hour. But the state needs to allow retail sale of electricity by charging station operators in order to access more than $78 million in federal money to build out electric vehicle infrastructure.” Read more here
The Strategies Behind Our Thematic Models
Aging of the Population - Capturing the demographic wave of the aging population and the changing demands it brings with it.
Artificial Intelligence – Software, chips, and related companies that facilitate the collection and analysis of large data sets and autonomous generation of solutions given non-machine language prompts.
CHIPs Act – Capturing the reshoring of the US semiconductor industry and the $52.7 billion poised to be spent on semiconductor manufacturing.
Cloud Computing – Companies that provide hardware and services that enhance the cloud computing experience for users, such as co-location, security, and edge computing.
Consumer Inflation Fighters - Companies poised to benefit as consumers stretch the disposable spending dollars they do have.
Core Holdings – Companies that reflect economic activity and are large enough to not get pushed around by day-to-day market trends. Low-beta, large-cap names able to better withstand economic turmoil.
Digital Infrastructure & Connectivity -The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment.
Data Privacy & Digital Identity - Companies providing the tools and services that verify authorized users and safeguard personal data privacy.
EPS Diplomats - Profitable large capitalization companies proven to produce above-average EPS growth and provide investors with the benefit of multiple expansion.
EV Transition - Capturing the transition to EVs and related infrastructure from combustion engine vehicles.
Guilty Pleasure – Companies that produce/provide food and drink products that consumers tend to enjoy regardless of the economic environment and potential long-term health hazards associated with excessive consumption.
Homebuilding & Materials – Ranging from homebuilders to key building product companies that serve the housing market, this model looks to capture the rising demand for housing, one that should benefit as the Fed returns monetary policy to more normalized levels.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Luxury Buying Boom - Tapping into aspirational buying and affluent buyers amid rising global wealth.
Market Hedge Model – This basket of daily reset swap-based broad market inverse ETFs protects in the face of market pullbacks, overbought market technicals, and other drivers of market volatility.
Nuclear Energy & Uranium – Companies that either build and maintain nuclear power plants or are involved in the production of uranium.
Precision Ag & Agri Science – Companies that look to address shrinking arable land by helping maximize crop yields utilizing technology, science, or both.
Rebuilding America - Turning the focused spending on rebuilding US infrastructure into revenue and profits.
Safety & Security – Targeted exposure to companies that provide goods and services primarily to the Defense and security sectors of the economy.
Space Economy – Companies that focus on the launch and operation of satellite networks.
The strategies behind our Dividend Income Models:
Monthly Dividend Model – Pretty much what the name says – this model invests in companies that pay monthly dividends to shareholders.
ETF Dividend Model – High-yielding ETFs that provide a range of exposures from domestic equities, international equities, emerging market equities, MLPS, and REITs.
ETF Enhanced Dividend Model – A group of high-yielding ETFs that utilize options to enhance yield through collecting option income.
Don’t be a stranger
Thanks for reading and if you have a suggestion for an article or book we should read, or a stream we should catch, email us at info@tematicaresearch.com. The same email works if you want to know more about our thematic and targeted exposure models listed below.