Market After The Close, Wednesday 29 January
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No Fed Whisperer I
by Alex King, CEO, Cestrian Capital Research, Inc
I can honestly say that I have no Fed chops whatsoever. I rarely listen to the conference calls because, really, it’s the market’s reaction function that matters to me, not the words that Chairman Powell says to glide smoothly between topics and out the room before anyone can land a blow. I did however tune in to today’s call, and I heard a number of things I thought were rather bullish for equities. Two in particular - (I’ll paraphrase) - (a) we’re not waiting for 2% inflation before we cut rates, and (b) Owner Equivalent Rent is nonsense and its reformulation will bring down CPI mechanically. Bearing that in mind, I think the market has under-reacted ie. I think we may well see a move up in markets once the Fed news gets digested.
Meta Platforms ($META) printed its Q4 after the close; the numbers looking back were very good, although the company is now spending more on capex each quarter than does many a self-respecting semiconductor fabrication business. And it still takes an age to generate images for this note using the self-same GPU architecture that everyone with a half-decent datacenter has adopted. DeepFake notwithstanding, I continue to think that the answer to better, faster, more AI is new chip design; that won’t happen tomorrow but I continue to look to $ARM, $AVGO, $MRVL and others to provide the next generation ecosystem. Perhaps even Apple silicon (ie. ARM with fancy backlighting) may play a role.
You can read our take on Meta’s earnings, here:
Alex King
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