The DC Today - Thursday, June 1, 2023
The Dividend Cafe
The Dividend Cafe - The Bahnsen Group
4.9 • 572 Ratings
🗓️ 1 June 2023
⏱️ 7 minutes
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Summary
Today's Post - https://bahnsen.co/3C3vY77
As expected, the House passed the McCarthy-Biden debt ceiling bill, and the Senate will do their part by this weekend. The bill passed by a vote of 314-117, quite the nail-biter, with 165 Democrats voting yes and 149 Republicans voting yes.
This allows us to now change our focus to the next end-of-the-world moment. Do not fear – it will not take long – a new culprit for the cause of Armageddon will arrive shortly. And the media will be ready to tell you what it is.
Futures are now at a 78% chance of a Fed Rate pause at the June 14 meeting (it was less than 40% just two days ago). Several Fed officials have come out jawboning the idea of a pause. I think there is almost a 0% chance that these Fed officials making public comments to this effect do not mirror the view of Chairman Powell himself.
The world’s largest chipmaker most connected to Artificial Intelligence is trading at a mere 197x earnings now, which is just the bargain basement level of 23x gross sales. It is sort of surreal to see this kind of excess and froth just a year after all these other shiny objects got taken to the woodshed. Human nature is immutable. C3.ai, a leading artificial intelligence software firm, is down -30% in the last 24 hours as numbers came in vastly below expectations. I bring this up because they are all over the news since, well, they lose $260 million per year on gross sales of $266 million per year. That negative -98% margin being attached to a $6 billion market cap is, shall we say, a sign of the times.
Links mentioned in this episode: TheDCToday.com DividendCafe.com TheBahnsenGroup.com
Transcript
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| 0:00.0 | Welcome to the DC Today, your daily market synopsis of the Dividing Cafe, brought to you every Monday through Thursday to bring you up-to-date information and perspective on financial markets. |
| 0:14.7 | Well, hello and welcome to the Thursday, DC Today, you know, these short weeks where you have a Monday holiday, it always seems to |
| 0:21.6 | go by quick. Market was actually up today and I'm going to quickly give you market metrics. |
| 0:27.4 | I just want to go through a couple other kind of newsworthy and more qualitative things |
| 0:32.0 | before I bid you a do for this Thursday evening. The Dow was up 153 points. That was roughly about half a |
| 0:38.5 | percentage point. S&P was upright at about one percentage point, NASDAQ about one and a quarter. |
| 0:44.3 | And tech was the leading performing sector today, but you had industrials, materials, and energy |
| 0:50.8 | all right behind it at about 1.25% each. So you had a bunch, and tech was right at |
| 0:59.3 | 1.3, you had a bunch of sectors that were just right on top of each other. And then the only two that |
| 1:05.2 | were negative were these defensives. Consumer Staples was down a tiny bit. And utilities were down, you know, three quarters of a point. |
| 1:13.4 | Technically, health care and real estate were up. |
| 1:16.4 | So not all the defensive sectors were down, but the only two that were down were defensives. |
| 1:20.4 | And that's been kind of this sort of world we're in. |
| 1:23.5 | And, you know, you look at a company that's's one of the news a lot lately is this company called |
| 1:27.6 | Nvidia, which is the leading chip manufacturer related to the AI space. |
| 1:33.6 | And you see a company trading it 1097 times earnings and 23 times sales. |
| 1:42.1 | And that's the, that's a bigger one, I think, for me to wrap my arms around 23 |
| 1:47.9 | times gross revenues. And, you know, you wonder how much of this can continue. And I don't have |
| 1:56.8 | an opinion on that. I don't have to have an opinion on that. We're not shiny object type investors. |
| 2:01.8 | We're not momentum investors. And I certainly have no reason to believe from the testimony |
| 2:05.8 | history that things that get real pricey can't get pricier. And a lot of people have their investment |
| 2:11.0 | strategy. Let's buy overpriced things that we think what's called greater fool theory. Others will |
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