The State of America - Prevailing Optimism

Many of you know that I wrote my thesis at Cal on Mark Twain and the Western Frontier. It was out west where Samuel Clemens experienced the expansion of the then 9-decade-old nation. Clemens was born on the banks of the Mississippi. He grew up and grew wise in his adventures out west. His childhood dream was to be a riverboat pilot. He fled Mississippi as the nation was being torn apart by the Civil War...

Amazon entered the Dow this week. It's another major milestone for the innovative American company. It's a prestigious achievement; A badge of honor in US Stock Market history. There are only 30 stocks in the Dow Jones Industrial Average at any given time. They do change periodically. Amazon, a longtime NASDAQ member, entered the S&P 500 in 2005...

Nvidia saved the rally. The most talked about stock in the world reported earnings Wednesday. As I wrote last week, Nvidia and AI have become more important than the Fed; At least to the Market.

Expectations were sky high. Nvidia delivered, and then some. It was another blowout quarter for the company that's powering AI. Nvidia had already grown revenue by over 200% and earnings over 400% in a year. Nvidia's stock has been a rocket ship for the innovation trade. The stock has soared 60% already in this young year. It hit $800 for the first time.

Retail sales declined 0.8% in January. That was much worse than the 0.1% decline expected. It was a notable slide from December's 0.4% monthly increase. After a strong Holiday spending season, a slowdown in January is pretty customary. This one was obviously bigger. Building materials and supplies saw the biggest decline, down 4.1% in January. Furniture sales grew. Bars and restaurants continue to see increases. That's been a consistent theme. Americans have been out and about with a vengeance. Covid triggered the fierce rebound in activity and consumption. It hasn't slowed.

It's that time of year. Americans from coast-to-coast will be glued to televisions. Food and beverage consumption will skyrocket. It's Super Bowl Sunday.

Over the last 57 years, audiences and Dollars spent have increased in size for this special Sunday. This one, Super Bowl 58, is going to be a Super Bowl like no other. First of all, it's in Las Vegas. This is the NFL's maiden voyage for its championship game in Sin City. It has a marquee matchup with the Niners and the Chiefs. CBS and the NFL are ecstatic about this pairing. And of course, there's that Taylor Swift factor. You simply can't talk about this year's Super Bowl without mentioning Time's Person of the Year. For some people, she's bigger than the game itself. I'm not one of them. But I sure get it.

This was another one of those eventful weeks. The Market absorbed so many news items and priced them in on the fly, as it does. The Market is a discounting mechanism. It anticipates outcomes and instantly prices them in. As probabilities move, the Market adjusts. It has the wisdom of crowds. There was a lot of movement this week. Here's another rapid rundown of what went down.

The most widely anticipated recession never showed up in 2023. Not only that, the US Economy accelerated in the Summer and kept up a solid pace into year-end. The unemployment rate remains near 50-year lows. That has supported the American people's grand spending habits.

The results are in: Americans opened their wallets over the Holidays. Retail sales rose 5.6% in December compared to a year ago. Higher prices contributed to the increase, but not all of it. The Consumer Price Index (CPI) was up 3.4% in December. That was a sharp decline from the inflationary pressures in 2022. Inflation is going back in the right direction. To be clear, prices are still rising. They're just rising at a slower rate than last year.

Las Vegas was abuzz this week and it had nothing to do with football. The Raiders season is done and the Super Bowl will be held there for the first time in February. (Side note, the Raiders belong in Oakland). This week was all about tech toys and innovative gadgets as the annual Consumer Electronics Show, now referred to simply as "CES," took over Sin City.

What an eventful year. 2023 sure has been a banner year for investors. It definitely didn't start out that way. Remember the banking crisis and the takedowns of Silicon Valley Bank and First Republic in the Spring? That seems like forever ago.