Tyson Foods to close major Nebraska beef plant amid cattle shortage - WSJ
Nvidia has been under attack by the media, insinuating that it makes “circular” alliances with companies that drive their stock prices higher, which then allow those companies to raise capital to buy Nvidia GPUs. Bloomberg reported on Thursday that Nvidia’s receivables have risen 89% and are outpacing sales, implying that some new customers may not have the capital to pay for expensive Blackwell GPUs.
The abrupt intraday reversal on Thursday in Nvidia and the overall stock market was largely caused by these insinuations and higher receivables, which, in my opinion, are entirely unwarranted. Barron’s on Friday had a great article entitled “Nvidia Is Now Misunderstood. Here’s What Mattered Most From Earnings.” In my opinion, Nvidia remains a screaming buy, especially after its Thursday pullback.
There have also been reports trying to imply that the data center boom would be constrained by construction delays as well as soaring electricity costs. The simple fact of the matter is that the U.S. is the “Saudi Arabia” of natural gas, so the U.S. has unlimited resources to cheap electricity via natural gas turbines. Although both GE Vernova (GEV) and Siemens have 5-year order backlogs for their train-sized natural gas turbines, the data centers can also operate on smaller turbines per data center that are widely available, thanks to the aviation industry.
New York Fed President John Williams said during a speech in Santiago, Chile, that he sees room in the near term to cut key interest rates again as the labor market softens. Specifically, Williams said, “I still see room for a further adjustment in the near term to the target range for the federal funds rate to move the stance of policy closer to the range of neutral, thereby maintaining the balance between the achievement of our two goals.” Barron’s then reported that there is up to a 70.9% chance of a December Fed rate cut.
The FOMC minutes were released on Wednesday, and it is clear that a lot of Fed members are frustrated by the lack of economic data due to the recent federal government shutdown. The October payroll report will be delayed until December 16th, after the December FOMC meeting, which will likely further frustrate the Fed. Since the Fed is data-dependent, they may not cut at the December FOMC meeting, but stay tuned since there will be an insightful ADP private payroll report for November in early December that could influence a couple of FOMC members.