Fear just had its biggest drop on record
Hi there!
Geez, what a week. A Chinese spy, the VP of Healthcare, rumours of a third and the end of an era. Jensen Huang has held a “no layoffs” policy since 1996. This week, he broke it. He laid himself off.
The internet was flooded with breaking news and memes, but the truth is there’s never been, and never will be, another founder like him. It feels like we’re mourning the end of Nvidia as we knew it, with custodians now in charge of keeping the business ticking over.
It’s a hot mess, and only time will tell what it means for the company and the wider AI sector. (I won’t lie, watching copper slide through the week made me wonder whether it was the usual factors at play or the Nvidia fallout.)
On a side note – I’m away for the next two weeks (lil holiday outing to Hong Kong and Shanghai with the family). A simplified version of the weekender will run in the meantime.
Let's dive in.
Investor sentiment survey
Bearishness fell 16.4 points in a week, the largest single-week drop in fear in the whole ~77 weeks we've run this survey. The run of very fearful weeks has ended, with bearishness below 40% for the first time in nine weeks and everything back to (almost) normal levels.
Over the next three months, do you expect the Australian stock market to be:
Best of Livewire
Here are some of my favourite reads from our friends at Livewire.
What is record low consumer confidence telling investors? Chris Leithner notes US sentiment is at all-time lows while GDP still grows. When gloom meets falling house prices, he says it usually ends in a recession rather than a rally.
Buy Hold Sell – 5 stocks flying too close to the sun: Riordan and Burns rate Codan, NexGen, Life360, Monadelphous and HUB24. No sells, with Burns holding everything on valuation and Riordan buying four of five.
Three reasons equal weighting may keep outperforming: VanEck’s Arian Neiron points out BHP and CBA alone drove 54% of the ASX 200’s September fall. Mid caps are forecast to grow earnings faster on cheaper multiples.
This sector beat the ASX 200 after 5 of 6 rate peaks: Bell Potter thinks 4.85% is the top of the cycle and is rotating into A-REITs, which have averaged 11.7% of outperformance over the following year. It likes MVA, GPT and Charter Hall.
What Woodside’s new dividend policy means: Woodside has moved from paying 50-80% of profit to 20-40% of operating cash flow. Lazard’s Tim Zhao says it isn’t a cut in disguise, with brokers tipping a yield above 6%.
Last laughs
The internet had an absolute field trip with the whole Jensen Huang debacle (and what you're seeing here are all the PG ones!)
