China Fund News reporter Guo Minjun
Good morning, everyone! Last night and this morning, a lot of big things happened.
The three major stock indexes of United States closed down across the board, and Nvidia's market value evaporated by $130.38 billion (about more than 930 billion yuan). JPMorgan Chase CEO Jamie · Dimon said that the probability of a "soft landing" of the United States economy is about 35% to 40%. The Fed is widely expected to cut interest rates for the first time in September.
The three major U.S. stock indexes closed down across the board
On August 7, Eastern time, the three major United States stock indexes closed down across the board, as of the close, the Dow fell 0.6% to 38763.45 points, the S&P 500 index fell 0.77% to 5199.5 points, and the Nasdaq fell 1.05% to 16195.81 points.
Chip stocks were weak, with Broadcom down 5.32%, Nvidia down 5.08%, Intel down 3.63%, Microchip Technology down 3.58%, Qualcomm down 1.64%, and Chaowei Semiconductor down 1.16%.
NVIDIA's market value evaporated by more than 930 billion yuan
On August 7, Eastern time, Nvidia opened slightly higher and then turned down, once falling 5.33%, down 5.08% throughout the day, closing at $98.95, and the stock price fell below the $100 mark again, with a market value of $130.38 billion, or more than 930 billion yuan.
Nvidia's Blackwell chips could face delays of three months or more due to design flaws. But analysts say potential production delays will have a limited impact on demand for AI chips from chip giant Nvidia. Because Nvidia's current competitive advantage is very large, the three-month delay will not result in a significant share change.
Supermicro computer fell by more than 20%
Artificial intelligence giant Supermicro Computer fell 20.76% at one point due to its performance not as expected, and finally closed at $492.70, down 20.14%.
In the fourth quarter of fiscal 2024 ended June 30, the company's adjusted earnings per share were $6.25, well below analysts' expectations of $8.07, and gross margin was 11.2%, well below the previous quarter's 15.5% and below analysts' expectations of 14.1%.
Supermicro Computer achieved revenue of US$5.308 billion in the second quarter, a year-on-year increase of 142.95%, roughly in line with market expectations of US$5.3 billion; Non-GAAP earnings per diluted share increased 78.06% year-over-year to $6.25, below the consensus of $8.07.
For the fiscal year ending June 30, 2024, Supermicro's annual revenue was $14.943 billion, up 109.77% year-on-year, and non-GAAP earnings per diluted share increased 87.04% year-over-year to $22.09.
Although the company's revenue has continued to grow, its profitability has declined. In the second quarter, Supermicro's gross profit margin decreased to 11.23% from 17.01% in the same period last year. Excluding the impact of stock-based pay, non-GAAP gross margin also decreased to 11.29% from 17.06% in the same period last year.
Management said that the decline in gross margin was mainly due to differences in product and customer mix, and the company is now focused on winning strategic new designs at competitive prices, as well as an increase in initial costs due to the ramp-up in production of new DLC AI GPU clusters. In the future, innovative platforms based on a number of new technologies will be introduced from strategic partners, and the production efficiency of their DLC solutions will be improved.
JPMorgan Chase CEO: The probability of a "soft landing" of the United States economy is about 35% to 40%
According to the Daily Economic News, citing foreign media reports, on August 7, Eastern time, JPMorgan Chase CEO Jamie · Dimon said that he still believes that the probability of a "soft landing" of the United States economy is about 35% to 40%, so in his opinion, a recession is still the most likely scenario.
Asked by reporters if Dimon had changed his February view of the market's overly optimistic view of recession risks, he said the likelihood was "about the same" as his previous forecast.
"There's a lot of uncertainty right now," Dimon said. I've been highlighting factors such as geopolitics, housing, deficits, spending, quantitative tightening, and elections, all of which have created a certain amount of anxiety in the market. ”
As the head of the bank with the largest assets in United States, Dimon has been warning of economic "hurricanes" since 2022. However, the economy has performed better than he expected. Dimon noted Wednesday that while defaults by credit card borrowers are on the rise, the United States is not currently in a recession.
He also added that he was "somewhat skeptical" that the Fed would be able to bring inflation down to its 2% target due to future spending on the green economy and the military.
"There's always a range of possible outcomes," Dimon said. I'm completely optimistic that if we experience a mild or even worse recession, we'll get through it. Of course, I have a lot of sympathy for those who are unemployed. None of us want to see a hard landing happen. ”
The Fed is widely expected to cut interest rates for the first time in September
Dudley, former president of the New York Fed of United States, said that two weeks ago, he himself turned from hawkish to dovish, abandoning support for further Fed rate hikes in favor of an immediate rate cut to avoid a recession. The longer the Fed waits, the more potential damage is likely to be done after more evidence of a weaker labor market in United States and a further slowdown in inflation in the past two weeks. Fed members' estimates of the neutral rate are between 2.4% and 3.8%, which means that the current effective federal funds rate of 5.3% is still a long way from the neutral level. Once a recession becomes a reality, the Fed will need to cut interest rates to 3% or lower. It is expected that at the September meeting, the Fed may cut interest rates by 25 or 50 basis points.
PIMCO's chief investment officer, Ivascyn, also expects the Fed to cut rates two to three times this year, with the first 25 basis point cut coming in September.
The information pushed by HSBC China's official WeChat also shows that HSBC Global Research has updated the Fed's policy rate path expectations, predicting three interest rate cuts this year with a total of 75 basis points, the same as expected at the beginning of the year.
Editor: Huang Mei
Review: Chen Mo