Happy Friday!
The S&P 500 index reaches 34th all-time high as consumer spending peaks. A new king is crowned — Nvidia becomes the most valuable company in the world — for a day. Prepare for crowded skies this summer. Have you ever had a 4-legged golf caddie?
Special Note: After 7 years in our Minneapolis office, we have moved to our new office at 7660 France Ave S in Edina, MN!
#1 – Weekly Market Recap – Stocks rose during the shortened trading week fueled by Monday’s rally as the S&P 500 set its 34th all-time high this year.
The S&P index rose +0.7% through Thursday to close at 5,473, while the Nasdaq increased +1.0% and the Dow Jones index climbed +0.7%.
Early Friday showed signs of investor fatigue as stocks were poised to open down slightly. This is not necessarily a surprise, or warning signal, given outsized stock returns this month, quarter and year.
The week started with a broad-based rally as analysts rushed to upgrade year-end S&P 500 price targets. Investment firms Evercore, Goldman Sachs, and Citi upgraded their year-end price targets. The most aggressive upgrade was Evercore ISI as they increased the year-end S&P 500 price target from 4,750 to 6,000. The +26% target price increase vaulted the research firm into the pole position as the most bullish.
As we have written on numerous occasions, a wave of investor exuberance appears to be pushing the S&P 500 to record after record in 2024. At DSG Advisors, we anticipate that a dose of caution could be warranted as market breadth has narrowed significantly with less than 50% of the S&P 500 companies trading above their 50-day moving averages while economic data softens.
As reported Tuesday, the consumer spending growth rate appears to have peaked and is declining on an inflation adjusted basis. As we have seen throughout history, it is hard to have robust economic growth without growth in consumer spending.
#2 – A New King is Crowned – Just two weeks ago, we wrote about Nvidia (NVDA) passing Apple (AAPL) to become the 2nd most valuable company in the world. At the time of writing, NVDA trailed #1 Microsoft (MSFT) in valuation by about 6%.
On Tuesday, Nvidia became the “Most Valuable Company” with a market capitalization of $3.34 trillion. Nvidia’s valuation is currently larger than the stock market capitalization of France, Germany, Canada or the UK.
Combined, the 3 US technology giants Nvidia, Microsoft and Apple are worth approximately $10 trillion — roughly 20% of the overall S&P 500 index.
As shown in the chart below, the speed at which Nvidia has reached the #1 Most Valuable Company milestone has been historic.
While Nvidia’s run from $1 trillion to $2 trillion was unprecedented (Nvidia accomplished the feat in 9 months versus the roughly 2 years it took Microsoft and Apple), the jump from $2 trillion to $3 trillion was simply breathtaking. It took Nvidia just 96 days to rise from $2 trillion to $3 trillion in valuation. This was about 10x faster than both Microsoft and Apple.
Nvidia’s record-breaking surge underscores its pivotal role in shaping the future of technology. As it continues to drive AI advancements, Nvidia has become a formidable force in global technology innovation.
Nvidia’s supersonic gain has investors wondering whether its valuation increase is justified or reminiscent of historic market bubbles. Only time will determine Nvidia’s final place in history, but it is astonishing that any company could increase its market value by $2 trillion in a single year.
Source: CNBC
#3 – Frequent Flyers – Be prepared for crowded planes this summer…the airline industry is setting its sights on a record 5 billion passengers in 2024.
This comes just three years after the pandemic, which resulted in the most severe crisis in the industry’s history. In 2020, due to Covid, international travel nearly came to an abrupt standstill. According to the International Air Transport Association (IATA), global passenger numbers dropped by 60% and passenger revenue fell almost 70%, crippling the industry.
Now, three years later, the industry has fully recovered. IATA is estimating industry revenues could hit a new record of nearly $1 trillion this year, with nearly 5 billion air travelers in 2024, exceeding the 2019 passenger number by more than 400 million.
In a recent statement ahead of IATA’s 80th Annual General Meeting in Dubai, IATA’s Director General Willie Walsh said, “With a record five billion air travelers expected in 2024, the human need to fly has never been stronger. Moreover, the global economy counts on air cargo to deliver the $8.3 trillion of trade that gets to customers by air. Without a doubt, aviation is vital to the ambitions and prosperity of individuals and economies.”
Source: Statista
#4 – Goat Caddies – At Silvies Valley Ranch in the Blue Mountains of eastern Oregon, golfers can play a round with a 4-legged caddie — a goat.
The goat caddie concept was born of necessity. The Silvies’ short course, the seven-hole “challenge course,” was simply too steep for golf carts to be driven safely. Since golfers only needed a few clubs to play the course, the ranch decided to put some of their 3,000 goats to work.
Potential caddies are evaluated on their friendliness and physical aptitude. Those that make “the cut,” are fitted with a custom-made golf bag – tailored by Oregon-based Seamus Golf. The bag contains six clubs, extra balls, and tees. The caddies also carry drinking water and their daily wage — a handful of peanuts.
Eight goats currently make up the Silvies Valley Ranch caddy roster: Chunky, Mulligan, Harry, Bogey, Birdie, Charlie, Carrot and Jack. There are nine additional goats in training and ten younger prospects in the wings.
Chosen candidates are taught the course and put on a carefully monitored physical and nutritional regime before starting their new role. Once the chosen caddies are at least two years old, they work six-hour shifts 3-4 days a week. An on-site vet visits the caddy shack – situated next to the Silvies owner club house – on a weekly basis.
Dr. Scott Campbell, the Silvies Ranch owner, says the caddies enjoy their work. “These goats want to be around people. They want you to give them a peanut. They want to go out and have a good time with you.”
Besides caddying, the goats also serve as grounds crew attendants by chewing their way through the Scottish thistle and gorse that makes up the course’s rough and outer brush. Though they do eat grass, weeds are their preferred snack, meaning they pose little threat to greens and fairways.
As for recommending what club to use, you may have to determine that on your own…the goats don’t know what club to use for the best shot…yet!
Source: CNN
Have a great weekend!
Denver & the DSGCA Team