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Nvidia sees over >$80b added to its market cap in a single trading day!

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Market Headlines 👀 

• US 10y yield hits a 16 year high on fear of interest rate outlook.

• Nvidia (NVDA) stock sees a massive rally as Wall St firms continue to raise price targets ahead of earnings on Wednesday.

• Snapchat (SNAP) continues exploring generative AI, with its latest feature titled “Dreams” which will allow users to generate images in imaginative backgrounds.

• SentinelOne (ADD) hires investment firm as the cyber-security company is exploring a sale.

• Alphabet (GOOGL) announces it will begin purging accounts that haven’t been used in two years or longer.

• Facebook (META) per report, Facebook is preparing software which will allow developers to automatically generate programming code.

• Subway eat fresh sandwich chain nears a sale of the chain for $9.6b to PE firm Roark capital.

• Goldman Sachs (GS) looks to sell its investment advisory business it bought four years ago.

• DuPont (DD) agrees to sell 80% stake in its Delrins unit for about $1.8b.

• WeWork (WE) announces a 1:40 reverse stock split.

• New York and California have seen trillions in assets leave through the pandemic, interesting article providing more data.

Earnings 💸

• Zoom (ZM)

  • EPS: $1.34 beats (exp. $1.05)

  • Revenue: $1.14b beats (exp. $1.11b)

  S&P 500 Heat Map

A Note From Masterworks

Yes, this platform’s 77% return is an outlier – but the rest may surprise you

The news is true: Masterworks’ 15th sale just weeks ago returned an impressive 77% to investors. While such a high return is an outlier for the blue-chip art investing platform, you might be wondering what their prior sales delivered. Glad you asked…

Every one of their sales has returned a profit to investors, with 12 of them delivering double-digit returns, and 1 delivering triple-digit annualized returns.

In full, Masterworks has over 300 paintings and their 15 exits have delivered: 32%, 39.3%, 36.2%, 27.3%, 9.2%, 33.1%, 21.5%, 17.8%, 13.9%, 35%, 10.4%, 325.5%, 4.1%, 17.6%, and 77.3%, net annualized returns*.

Every sale but one outperformed the stock market in the period from when it was offered to when it was sold.

Got your attention yet? Readers can skip the waitlist with this exclusive link.

_{See important disclosures at masterworks.com/cd}

Recap Around the Street 🧠

At this year’s Jackson Hole Symposium happening next week, we expect a discussion about that elusive r* neutral rate, trying to make sense of economic resilience despite higher rates and broad expectations for weakness (we argue a big portion of it is pandemic distortions, fiscal support, and the long-tail of QE).

Looking tactically at these markets, we make the following observations:

For equities, we do expect the corrective period to continue in the near-term. Short term, U.S. equity indices are nearing oversold levels (essentially moving too far too fast to the downside, using measures like the relative strength index), which could support slight short-term stabilization, but note that we remain in a tough seasonal stretch through October, with September being the worst month on the year for a seasonal headwind.

Further, we have not quite seen a “washout” in equity market breadth, using measures like the percentage of issues above their 50-day moving average (at 34% today vs. 90% at the end of July before the sell-off, but still above the ~20% level that has indicated broader capitulative selling, meaning we are getting closer to “flushed” but not quite).

We are starting to see a spike in downside protection (looking at measures like the put-call ratio), but these have not reached prior extremes yet. For now, we expect a “standard” and healthy U.S. equity correction (throughout U.S. equity history, high-single-digit to low-teen corrections are common even during the most powerful bull markets) that can provide an entry point for underweight investors, but of course will remain vigilant in monitoring for signs of rising growth fears that could increase downside.(Contributed by Cameron Dawson, CIO at NewEdge Wealth as of 8/18/23).

Treasury Bond Auction Committee (TBAC) just signaled some flexibility around treasury bill guidance (limit 20% of outstanding debt recommendation). T-Bill issuance currently just above 22%. Flexibility on 20% limit has positive implications for liquidity and meeting short term collateral needs for overnight borrowing. (Contributed by Benjamin Lavine, CIO at 3D/L Capital).

Market Preview 🎞️

• Tuesday, August 22nd: Existing home sales; BRICS summit begins; Richmond Fed manufacturing and business conditions

• Tuesday earnings: Lowes (LOW), and Toll Brothers (TOLL)

• Wednesday, August 23rd: MBA mortgage applications;S&P Global manufacturing, services and composite PMIs; New home sales

• Wednesday earnings: Snowflake (SNOW), Nvidia (NVDA), Splunk (SPLK), Grab Holdings (GRAB), Autodesk (ADSK), Foot Locker (FL),and Peloton (PTON)

• Thursday, August 24th: Weekly jobless claims; Durable good orders

• Thursday earnings: Affirm (AFRM), Ulta Beuty (ULTA), Marvell (MRVL), and Workday (WDAY)

• Friday, August 25th: University of Michigan sentiment and inflation expectations survey; Jerome Powell speaks at Jackson hole

That’s all for today, folks! We’ll be back around the same time tomorrow with a curated list of important news, economic data and market highlights. 

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