Bullish AI news from Nvidia’s conference could lure in investors shunning risk. (0:33) Fed’s Jay Powell will find it tougher to dodge tariff questions. (1:35) Bill Gross weighs in on tariffs. (5:05)Show NotesEarnings CalendarDividend RoundupEpisode transcripts: seekingalpha.com/wsb Sign up for our daily newsletter here and for full access to analyst ratings, stock quant scores, dividend grades, subscribe to Seeking Alpha Premium at seekingalpha.com/subscriptions.
Full Episode
Welcome to Seeking Alpha's Wall Street Brunch, our Sunday look-ahead to this week's market-moving events, along with the weekend's top news and analysis. Hello, today is Sunday, March 16th, and I'm your host, Kim Kahn. Help me, NVIDIA GTC, you're my only hope. Amid a sharp sell-off, Friday's bounce notwithstanding, this week could prove pivotal for the markets.
Bulls will be looking for NVIDIA's GPU Technology Conference and Fed Chief Jerome Powell & Co. for some help. And with all due respect to the Fed, it looks like beaten down NVIDIA is the one that will have to jump in the Millennium Falcon and ride to the rescue. The question is whether the AI force is still strong with the stock.
GTC kicks off on Monday, and CEO Jensen Wang delivers the keynote address on Tuesday. So positive signs about demand and production could bring in buyers who have so far been unwilling to buy back into heavyweight tech favorites, even with valuations tumbling.
AI is approaching bear territory, with the iShares Future AI and Tech ETF, ticker symbol ARTY, down 18% from the recent market high a month ago. Looking to specifics, B of A analyst Vivek Arya is expecting to hear updates on NVIDIA's pipeline, Blackwell Ultra and Rubin, its position in China, and how it stacks up against the competition.
The key near-term issue is the Blackwell ramp, which led to some higher costs and delays and resulted in margins declining to 71% from the mid-70s range. Other areas of focus include the rise of application-specific integrated circuits with Broadcom and, to a lesser extent, Marvel. A day after Jensen Long has his say, Jay Powell steps up to the mic on Wednesday.
The markets are pricing in a dead certainty that the FOMC will keep rates on hold, and Powell said recently that there was no hurry to consider rate moves. But there will be the press conference, where the Fed chairman will be peppered with questions about the impact of tariffs on growth and inflation, and a new summary of economic projections, known as the dot plot.
Powell will do his best to avoid criticizing tariffs and the current uncertainty they are bringing. That would be a departure from his data-dependent mantra, and there's no upside in a war of words with President Trump. But he may find it harder to sidestep questions about where policies are impacting the numbers.
During the COVID inflation surge, he put particular importance on inflation expectations in the Michigan Consumer Sentiment Report. The latest figures showed year-ahead expectations jumping to 4.9% from 4.3% and five-year expectations rising to 3.9% from 3.5%.
Unemployment fears rose to great recession levels, while the overall sentiment index tumbled in what Pantheon macroeconomist Samuel Toombs called a horrific report. In the dot plot, we may see rare focus on GDP forecasts, along with rates and inflation, as the stock market frets about growth. Wells Fargo economists say they expect to see a modest downgrade to economic projections for 2025.
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