Saturday, December 9, 2023

Making sense of the markets this week: February 26, 2023

Intel swoons on dividend cuts whereas Nvidia soars on A.I. frenzy

It was additionally a blended bag for semiconductor firm earnings this week. On Wednesday, Intel (INTC/NASDAQ) minimize its dividend by 65% from $0.37 to $0.13, weeks after asserting main cuts in govt compensation. That prompted Morgan Stanley to declare its inventory regarded higher after the minimize, and the inventory rose a tad on Thursday. However that transfer was eclipsed by an enormous transfer in Nvidia (NVDA/NASDAQ), which soared 14% Thursday, on high of a leap after constructive earnings information on Wednesday. Even earlier than that, the inventory was up 45% in 2023 over the agency’s sturdy place within the more and more manic A.I. sector.

Inflation watch: Transport containers

If you would like a fast technique to quantify simply how dramatic the post-COVID client swap to companies and away from items has been, the price of transport containers is down 85% from its pandemic peak, and is now beneath pre-pandemic ranges.

Supply: Monetary Occasions

An enormous a part of the prices of manufactured items in North America comes from transportation: shifting uncooked supplies to the producers, and transport the ultimate merchandise from abroad factories to our native retailers. Consequently, with lowered oil costs and transport container charges being down 85%, it represents a large price discount. And with 90% of products reaching retailers through ships, and the amount of products demanded being down 5% year-over-year, the disinflationary pressures from the products facet of the CPI market basket ought to proceed to assist out shoppers.

With the world’s greatest transport firms utilizing unprecedented large earnings through the pandemic to improve and develop their capability, we shouldn’t see transport costs pattern upward for some time.

Supply: Monetary Occasions

Now if we may simply get the companies sector to observe the same disinflationary sample, central bankers world wide—and common people, too—may breathe a sigh of reduction. Inflation headlines may then retreat again to the sixth web page of the enterprise part, versus screaming in daring font “above the fold” every month.

Kyle Prevost is a monetary educator, writer and speaker. When he’s not on a basketball court docket or in a boxing ring making an attempt to recapture his youth, you could find him serving to Canadians with their funds over at and the Canadian Monetary Summit.

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