Pro Perspectives 3/18/24






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March 18, 2024

It’s a big week.  Nvidia kicked off its annual developers meeting this afternoon.  We have the Bank of Japan tonight.  And the Fed determines policy on Wednesday.

As we discussed last week, there has been a clear effort by the Bank of Japan (BOJ) over the past several months to start setting expectations in markets that they will exit emergency level policies.

Last week, there was talk that they might end negative interest rates tonight.  Today, the Nikkei Asia (a Japanese news source) suggested they will also end yield curve control and ETF purchases.

While they would continue with QE, this would be an aggressive exit from a very long period of ultra easy monetary policy.

Given the fragile nature of global financial markets, and the very deliberate telegraphing of policy moves made by the Fed and other major central banks for much of the past 15 years, this seems like it would be an unnecessarily abrupt move by the Bank of Japan.  It would create risks to global liquidity at worst, and global market stability and confidence at best.

Keep in mind, the major central banks of the world have coordinated policies and worked as partners throughout the crises of the past 15 years (they talk a lot).  With that, we should expect the Bank of Japan to be reluctant to cause any disruption in global markets.

On Nvidia:  As we’ve discussed here in my daily notes, since its May earnings call last year, Nvidia has become the most important company in the world.

When Jensen Huang speaks, founder/CEO of Nvidia, he’s educating the world on the evolution of generative AI, and (as he calls it) the “rebirth of computing.”

Today he did so to an arena full of the world’s leading technologists.  He announced Nvidia’s new chip.  And he says it will be the most successful product launch in the company’s history.  Keep in mind, this is a company that nearly quadrupled in size over the past year, growing quarterly revenue by $16 billion (year-over-year).

As we’ve discussed earlier this month, Huang has said the future of accelerated computing is where “the digital world meets the physical world.”  He talked more about this today.

Nvidia’s Omniverse technology will power it, and it will reshape $100 trillion worth of global industry.

Importantly, the richest and most powerful companies in the world are spending billions of dollars a quarter on Nvidia’s AI chips, and partnering with Nvidia on projects ranging from infrastructure to research, to applications.  They are all-in.  And so is (virtually) everyone else.  These are companies collaborating with Nvidia …


It’s a new industrial revolution.  And it’s still very early.