Dear No,
The Dow and the S&P 500 were flat this morning as investors continue to monitor the 10-year bond. The 10-year Treasury bond hit its highest level in a year as concerns about inflation continue to rear their head. Federal Reserve Chair Jerome Powell testified this week that it could be at least three years before we see consistent inflation that meets the central bank's inflation targets.
The problem is that this is ludicrous. While the numbers might not appear in the selected government data, oil prices are now on pace to hit $70. Meanwhile, for anyone paying attention, the Fed's extreme money pumping – as referenced by Dr. Bauer this week – has driven asset prices much higher.
The point: The Fed's policies have been inflationary for the markets and investment assets like housing. But we're not allowed to talk about this…
So, let's dig into the other big stories for Thursday.
Back to the Moon for GameStopA second short squeeze has hit GameStop. On Wednesday, shares rallied more than 100%, and shares are ripping even higher again. Shares popped another 57% in early trading. Even though the company isn't profitable, and sales fell 30% in the third quarter, Reddit traders are piling back in to target anyone left shorting this stock.
There was a small catalyst for these moves. The ousting of CFO Jim Bell suggests that Ryan Cohen, the founder of Chewy and GME investors, could take over the gig. And in doing so, GameStop could ditch the brick-and-mortar shops and become a digital company just like Chewy.
Would they sell gamer snacks the same way that Chewy sells pet snacks? We'll find out.
The Cloud Wars ContinueShares of Microsoft Corporation were off 1% on Thursday.
But the big news is the explosion in sales from the company's cloud division.
Last year, Microsoft's Cloud generation produced more revenue for the company than Amazon and Google's cloud revenue.
Microsoft generated $59 billion in revenue from the cloud. AWS generated just $43.4 billion but still has the largest market share? What gives?
I think the cloud wars are just getting started.
Perhaps this is why Amazon elevated the head of AWS to replace Jeff Bezos.
Cloud computing is still a red-hot investment and one poised to make a lot of money in 2021. It is now the preferred choice of IT departments as companies overhaul their infrastructure to accommodate working from home. I expect that Amazon will make up ground on revenue against Microsoft with their new leader at the helm.
The Truth Behind Nvidia EarningsNvidia shares fell 2.7% Thursday on concerns about the company's growth in its data center division.
The company's CFO said last night that its largest growth in Q1 would come from the gaming business.
This raises concerns about data center sales, which surged by 97% from the same period in 2019. Nvidia didn't do anything wrong. It saw total sales jump 61%, and revenue surpass $5 billion for the first time.
But here's the real story: The company is experiencing a broader challenge where semiconductor supply is way under demand, creating a shortage in the space.
Whoever can address the supply problems in the semiconductor space is poised to be big winners in the year ahead. The shortage will also be good news for lagging companies like Intel Corporation (INTC) in the space. If they can fill the gap, they will recover from the big hit they suffered when Apple announced plans to produce chips for its own products.
Cheers, 
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