What we’re reading (3/4)
“Nvidia’s Surge Stokes Talk Of A Bubble” (Wall Street Journal). “The stock has risen more than sevenfold since Oct. 14, 2022, and Nvidia is now the third-most-valuable U.S. company, with a market value above $2 trillion. The chip maker added nearly $280 billion in value in just two trading sessions after reporting blowout fourth-quarter results on Feb. 21. It took just 180 trading days for Nvidia’s value to rise to $2 trillion from $1 trillion; it took more than 500 trading days for both Apple and Microsoft to reach that milestone.”
“A Frothy Market Misses Vital Bubble Ingredients” (Wall Street Journal). “Valuations don’t suggest a lot of speculative buying…The Nasdaq peaked at over 100 times predicted earnings for 12 months ahead in the late-1990s dot-com bubble because buyers didn’t think valuations mattered any more. At the moment the Nasdaq’s at 27 times forecast earnings, much lower than the 35 times it traded at in late 2020. Nvidia’s stunning rise hasn’t been about higher valuations, either—its profits and forecast profits have been rising faster than the share price, so it trades at a lower valuation than before the AI boom started with the release of ChatGPT.”
“Why We Expect Inflation To Fall In 2024” (Morningstar). “In our latest Economic Outlook, we detail that the drop in inflation has been driven principally by the unwinding of price spikes owing to supply chain resolutions and by the slowing pace of economic growth because of the Fed’s tightening.”
“JetBlue, Spirit End Bid To Merge After Antitrust Objections” (Washington Post). “JetBlue Airways and Spirit Airlines announced Monday they have dropped plans to merge, a transaction that would have created the nation’s fifth-largest carrier. In a statement, JetBlue said that while the two companies still believe in the ‘procompetitive benefits of the combination,’ it was unlikely they would be able to reach the necessary legal and regulatory approvals by July 24 as called for in their agreement.”
“The Core Of The Tax Code Will Change, But We Don’t Know How” (New York Times). “On Dec. 31, 2025, critical parts of the 2017 federal tax law are scheduled to expire. After that sunset, they would revert to what they would have been if that sweeping tax legislation, passed in the first year of the Trump administration, had never taken effect.”
