That is a very good question, thank you. Mostly as a matter of practicality.
Note that the consumer price indices for a month show how much consumer prices have changed during the month and is calculated after the month is finished.
I want to use inflation adjustment “in real time” and not to wait until the next month to see where we were on the inflation adjusted basis a month before. So I use the index value for the previous month.
You can also see it like this: the inflation is accumulated during the month and we get an index value corresponding to the end of the month. From the beginning of a new month, the purchasing power of our money is (typically) lessened by the increase of prices accumulated in the previous month.
Moreover, the price index changes little from month to month. The inflation effect becomes important over years. I am looking at relative changes of the inflation adjusted benchmark, so as long as I calculate it consistently, it is good enough for my purposes.
For the calculations I did for various indices (see here) I used month-end values for the indices and exchange rates, so I had to wait for the month to be over anyway.
Federal Reserve Chairman Jay Powell launched the signal flare today, saying policymakers are ready to start cutting interest rates.
Powell said.: “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Market watchers declared the Powell pivot complete.
Interesting to see whether that soft landing will happen while inflation is kept at bay in the coming 12-18 months in the US. Then, the FED would have done a very good job. Still a bit skeptical as this does seem like a fairytale story.
I can imagine it as Fed tightening has been counteracted by huge fiscal spending. I’m not sure you could even describe the financial conditions as ‘tight’ in spite of several rate hikes.
I could imagine if they really become common, they will be arbitraged away eventually or else “buying the dip” works to well. It cant happen any different.
Also fast acting tail risk strategies would get very common, counteracting it also.
AI juggernaut Nvidia (NVDA) reported second quarter earnings after the bell on Wednesday that beat expectations on the top and bottom line, while its forecast for the current quarter also came in ahead of expectations.
Nvidia reported adjusted earnings per share of $0.68 on revenue of $30 billion in its fiscal second quarter. Analysts were expecting EPS of $0.64 and revenue of $28.8 billion. That marks a 122% increase on the top line from a year ago; earnings rose 168% from the same quarter last year.
The company also provided third quarter revenue guidance of $32.5 billion plus or minus 2%. Analysts were looking for $31.9 billion.
Shares of the chip giant were down about 3.5% in after-hours trading following the results. The stock fell as much as 6% in immediate reaction to the numbers.
Yeah I saw, I expected as much because humans. I hope that this marks the end of the nvidia circus and we don’t get a crash the inevitable day they MISS earnings predictions.
Think there is more than 1 factor that led to sharp CHF increase (safe haven currency…), but carry trade was not only limited to JPY.
From the FT “Carry trades in requiem” (Alphaville column, highly recommend!):
The unwind has not been so quick for the Swiss franc, the other safe-haven currency commonly used to fund carry trades, SocGen notes. It’s a much smaller market than the yen though, so the ripple effect should be less pronounced:
In another article “Brace yourself for an ‘avalanche’ of dollar selling?”:
Morgan Stanley’s former currency supremo reckons the greenback’s recent slide may yet turn into an “avalanche” as dollar depositors with a nervous eye on America’s rising trade and budget deficits and “no loyalty” to the world’s de facto reserve currency begin to flee.
He has been bearish on the dollar for about a year and a half, during which time it’s largely tracked sideways. “Even though I haven’t been right, I haven’t been that wrong, either,” says the former Morgan Stanley man. You can take the man out of the sellside, but not the sellside out of the man etc.
The latest CFTC data likewise suggests speculators are now long international FX versus the USD.
What would you do with all the cash? They’re printing money (70% margin?), how much capital can they deploy? (also does it cover enough to balance the dilution from RSUs)
Pay off debt, if any, make acqusitions to become even more monopolistic (they did a good job acquiring Mellanox), invest more, lock up suppliers, HBM and other upstream components, lockup TSMC manufacturing capacity, distribute a special dividend, and most importantly reduce profits by producing a low cost GPU with tons of VRAM so consumers can buy a GPU with a decent amount of VRAM without the need to sell a kidney! OK. that last one might be just for me!
Piggybacking off this, NVDA’s ESPP (1-15% of base salary) uses a 2 year lookback when setting price. I dont know if their details are disclosed in fillings, but wouldn’t suprise me to see rather large share allocations for ESPP program if your purchase price was 12$.
Although ESPP limited to 25k the ammount is likely not that large compared to normal RSU awards.
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