【Morning report】Nvidia, potential issues with Blackwell design. Current US stocks are historically expensive.

moomooニュース米国株 wrote a column · Nov 17 17:19

【Morning report】Nvidia, potential issues with Blackwell design. Current US stocks are historically expensive.

Moomoo users, good morning!Here are the key points of the early morning report today.

Tokyo stock market expected range: 0.03 million7900 yen - 0.03 million8500 yen (closing price on the 15th: 0.03 million8642 yen 91 sen).
October's key economic indicators in the USA are strong.
The uncertainty of the US election has been removed, but policy uncertainty still remains.
The current valuation of US stocks is historically considered expensive.
● Is Nvidia facing issues with Blackwell design?
● Palantir, expected to surge on analysts' caution.
● 25 companies with increased revenue and profit in the first half of the year and low p/b ratio that can be purchased for less than 0.1 million yen
- moomoo News Julie

Market Overview

Source: moomoo app

◇On the 15th, the major indices in the USA market experienced significant declines. Continuing from the previous day, Chairman Powell's statement that "there is no need to hurry to cut interest rates" was still seen as negative news, leading to a decline. The strong October retail revenue exceeding market expectations also contributed to a retreat in interest rate cut expectations. Tech stocks like semiconductors and the Magnificent 7 were weak. $Tesla (TSLA.US)$ や $Palantir (PLTR.US)$ hedge gain. Pharmaceutical stocks are low. President-elect Trump nominated anti-vaccine activist Robert F. Kennedy Jr. as Secretary of Health and Human Services, which was seen as a selling point.
◇On the 18th, the Tokyo stock market is expected to see a significant decline in the Nikkei average stock price, mainly due to selling pressure on major tech stocks.

Top News
Solid performance in major U.S. economic indicators.
●Retail sales revenue exceeded expectations with a 0.4% increase compared to the previous month in October.
Seasonally adjusted retail sales revenue for October increased by 0.4% compared to the previous month, surpassing market expectations. The retail sales revenue for September was upwardly revised from a 0.4% increase to a 0.8% increase, indicating continued strong momentum in the U.S. economy ahead of the year-end holiday shopping season.
●U.S. industrial production declined by 0.3% in October, in line with expectations.
The industrial production index for October (seasonally adjusted) decreased by 0.3% compared to the previous month, in line with market expectations.

While the uncertainty of the US election has been removed, policy uncertainty still remains.
Uncertainty has been somewhat resolved due to Mr. Trump's victory, but new uncertainty has emerged in its place. It is the uncertainty of policies.
Mr. Steven Wieting, a strategist at Citi Wealth, mentioned that he is watching to see what the next administration's policies on immigration and tariffs, which Mr. Trump has campaigned on, will be. Depending on specific policies, these two could potentially impact both the market and inflation. According to Wieting, more detailed information on these issues may be available depending on who Mr. Trump appoints in the coming weeks.
President Trump's proposed solution to the fiscal deficit is to establish a 'Department of Government Efficiency' and appoint Elon Musk and Vivek Ramaswami to manage it, but it is still unknown how this new organization will function. (MarketWatch)

The current valuation of US stocks is historically considered expensive.
CAPE (Cyclically Adjusted Price-to-Earnings ratio)
The CAPE of the S&P500 index rose to 38.11 in November, reaching its highest level since the second half of 2021. Previously, it had only been at this level during the peak of the dot-com bubble.
PER (Price-to-Earnings ratio)
The forecasted PE ratio of the S&P 500 index surpassed 22 times for the first time since November 2021. This means that stock prices are relatively high compared to the expected profits that companies are projected to generate over the next 12 months.
ERP (Equity Risk Premium)
Compared to the historically high returns obtained by investors holding US government bonds, stocks may no longer offer attractive returns considering the increased risks. According to MarketWatch calculations, the ERP has fallen to its lowest level since 2002 this week. (MarketWatch)
●Buffett's cash on hand has reached a record high, raising concerns among some.Amidst this situation, there is a growing sense of caution among some.
Related Article:Mr. Buffett, while staying defensive, also goes against the trend! Increasing cash positions, making new investments in Domino's Pizza! What is his aim?

Is there a problem with the design of Nvidia's Blackwell?
Regarding Nvidia's latest AI semiconductor Blackwell, Bloomberg reported, citing The Information, that "due to overheating issues in recent months, they have been requesting suppliers to change the server rack design, leading to concerns of delayed deployment."
If true, concerns about delays with Blackwell may arise again. With earnings reports approaching, analysts have been notably raising their target stock prices for Nvidia; however, reports of delays could dampen investors' expectations.
Related Article:Wall Street's attention is heating up! Nvidia's earnings reports are imminent, will Blackwell be the catalyst for the stock price? Will it create a new wave following the Trump rally?

Palantir's shares surge in anticipation of analysts' cautiousness
● $Palantir (PLTR.US)$ Stocks rose 11% on November 15th. President Trump's victory in the U.S. election gave a new optimistic reason to the bulls for the company, which obtains more than half of its revenue from government contracts.
On the other hand, some analysts have pointed out concerns about the high valuation and the possibility of a correction in the near future. However, it seems that individual investors' enthusiasm continues.

Will the main role of Japanese stocks switch from semiconductors to banks?! Following the rate hike effects, there is a rush of upward revisions! While the stock market continues to rise, the PBR is at around 1x, prompting attention even to major regional banks. [Earnings Summary]
3 major bank groups $Mitsubishi UFJ Financial Group (8306.JP)$ 、 $Sumitomo Mitsui Financial Group (8316.JP)$ 、 $Mizuho Financial Group (8411.JP)$ The interim financial results for the three major banks for the March 2025 period (April-September) have achieved unprecedented strong performance due to the effects of the Bank of Japan's interest rate hike. All three companies have announced upward revisions to their full-year forecasts, increased dividends, and share buybacks, expecting record profits.

Semiconductors and AI demand soar! Three companies including Tohoku Electric Power are making their second upward revision this fiscal year! Can they overcome the rough waves of regulations from China? [Earnings Summary]
The 2nd quarter earnings reports of the six semiconductor-related companies with a significant impact on the Nikkei Stock Average Index (Laser Tech is 1st quarter) showed that four companies had increased revenue and profit. For the full year, all companies are expecting increased revenue and profit. Regarding full-year performance estimates, $Tokyo Electron (8035.JP)$ 、 $Advantest (6857.JP)$ 、 $Screen Holdings (7735.JP)$ Three companies have announced their second upward revision this fiscal year following the first quarter. The strong demand for AI servers continues. These three companies have been continuously revising their forecasts upward in the fiscal years ending in March 2021 and March 2022, facing a global semiconductor shortage and seem to be starting a similar trend this fiscal year.

25 companies with increased revenue and profit in the first half and low PBR that can be bought for less than 0.1 million yen. Featured on the Standard.
Individual investors are highly interested in stocks that can be invested with small amounts of funds. There are a total of 842 stocks listed on the Tokyo Stock Exchange Standard that can be purchased for less than 0.1 million yen. This time, we focused on stocks with a PBR (price-to-earnings ratio) of less than 1, achieving increased revenue and profit in the period from April to September 2024, and serving as criteria for identifying undervalued stocks.

ADRs Japanese stock rankings - General selling dominance.