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Benzinga PreMarket Prep 8:00AM ET- 9:00AM ET BenzingaTV on YouTube.
Benzinga PreMarket Prep 8:00AM ET- 9:00AM ET BenzingaTV on YouTube.
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00:00 Let's just talk about seasonality, right?
00:03 And August is historically--
00:06 - August is always a slow month.
00:07 It's the school holidays.
00:08 - It's a slow month, right?
00:09 - People are on holiday.
00:10 - Well, the bulls are on holiday.
00:12 I don't know about the bears.
00:14 I think the bulls stayed at their desk here, but--
00:16 - But consumers are on holiday as well, Joel.
00:19 And I think that's,
00:20 businesses tend to wind down in August anyway.
00:23 So, I think there's an element that if we look to,
00:28 if we micromanage the data too much,
00:31 we start to miss the wood for the trees.
00:33 I'll be very interested to see how things pan out
00:36 over the course of the rest of the year.
00:38 I'm not expecting to see a stronger performance
00:41 in the second half of the year as the first half.
00:44 And I think as long as unemployment remains low,
00:48 I think the best we can hope for is stagnation,
00:50 if you like.
00:51 I mean, if that's a good thing,
00:52 it's certainly preferable to recession.
00:55 - So, you're looking at this August price action
00:59 and the activity for the year so far.
01:02 You think it's probably maybe as good as it gets,
01:04 that this is not,
01:06 like we just had a 300 point sell-off in the S&Ps,
01:09 some of the big tech stocks have pulled back significantly
01:14 from their recent highs.
01:17 So, you're not as inclined here to buy the dip.
01:20 If you're not as inclined to buy the dip here,
01:23 where do you think the trading action is going?
01:26 How low do you think the S&P
01:28 or whatever you like to use as a standard,
01:31 what are you looking at from a technical perspective?
01:34 - I think it's very strange that we're placing so much stock
01:38 on the results of one AI chip company, Nvidia.
01:43 You know, when I look at the numbers for Nvidia,
01:47 they are impressive.
01:48 You know, they're talking about Q2 revenue
01:51 of $11 billion, you know,
01:53 and when you consider that in Q1,
01:56 they turned over $7.1 billion,
01:59 and for Q2, the data center component alone
02:02 is expected to contribute 7.9 billion
02:04 of that $11 billion.
02:06 For me, I think it's about how they project going forward
02:09 for Q3 and Q4.
02:11 That's a big, big jump in revenue.
02:13 The big question for me is whether or not
02:16 that translates into a big jump in profitability
02:18 and how much capacity they have
02:20 to generate further additional revenue growth.
02:24 And I think to some extent,
02:25 and I could be way off base here,
02:26 I've looked at the options here.
02:29 I feel that an awful lot of the good news is priced in
02:34 and anything that comes in slightly below expectations
02:37 could see the swings that you were talking about earlier.
02:40 I think it was you, Mitch, wasn't it?
02:42 You mentioned that.
02:43 - Yeah, definitely something
02:45 that we're gonna be looking out for.
02:47 I think that, like you said, the bar is set high already.
02:50 So it's gonna be really interesting to see
02:53 if they can even push that bar higher.
02:55 I think it's gonna really take, like I would say,
02:58 a kick-ass report to really get it back up
03:01 and keep it up here.
03:02 - Yeah, and on a technical basis,
03:04 if you look at the S&P and you look at the NASDAQ,
03:06 they cross below the 50-day moving average.
03:08 They're starting to look a little bit bearish.
03:10 I am a little bit concerned that there might be
03:13 a little bit more downside in US markets.
03:17 Less so, I think, with Europe and the UK.
03:19 I think that the valuations here are much cheaper.
03:21 So I don't think I'd be more comfortable buying the dip here
03:25 than I would be in the US.
03:26 Let's just say that.
03:27 - And one last area I'd definitely keep a close eye on,
03:30 we've been talking about it all year, is oil, right?
03:33 Just recently saw a spike that went up there
03:35 closer towards 85.
03:37 The EIA said that it would be closer to 85,
03:40 maybe towards 90 by the end of the year.
03:42 How do you see oil here, Michael?
03:45 - I still think 85's toppy.
03:47 I think demand is gonna remain
03:49 a little bit on the weak side.
03:50 Obviously, there's the China story there.
03:53 I think it's a deliberate policy
03:54 on the part of the Chinese government
03:55 to try and let the air out of this real estate bubble
03:58 in the most gradualistic way possible.
04:00 But also, I think China's been buying cheap Iranian oil.
04:05 I don't think the problem here is China.
04:06 I think the problem with demand
04:08 is with respect to the rest of the world.
04:10 So I still think 75, 85 on the range for crude oil.
04:14 I just don't think the demand is there.
04:16 - We've been on the line with Michael Hewson.
04:20 He's a chief market analyst at CMC Markets for 30 years.
04:25 Michael, we always love getting a view from across the pond.
04:28 - Always a pleasure, guys.
04:29 - Yeah, your take on the markets.
04:31 We'll dial you up again soon.
04:32 Michael Hewson. - Look forward to it.
04:33 Cheers, guys, thank you.