VIDEO: How This Holding's Event Is Helping Drive a Market Rebound
Plus, the Preliminary March Michigan Consumer Sentiment Survey adds to consumer concerns.
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In today’s Daily Rundown video, Chris Versace discusses the factors behind Friday's latest market rebound attempt.
The positives include the increasing likelihood that we avoid a government shutdown, Foxconn’s big outlook for the March quarter and Palantir’s PLTR AIPCon 6 event. However, preliminary readings for the March Michigan Consumer Sentiment Index add to growing concerns about consumer spending, reaffirming our current plan for a key holding.
Chris closes out the day's video by sharing what members can expect over the weekend, including a podcast conversation with ServiceNow’s Bill McDermott about enterprise software sales.
Transcript
CHRIS: Hey everyone, Chris Versace here. It is Friday, March 14th. We are closing out the week and after the market being oversold and experiencing a cumulative 10% correction over the last few weeks, we are seeing a market rebound unfold. Today we talked about the prospects for this earlier this week and again in our opening comments this morning.
But again, what we are seeing is this latest attempt for the market to move higher. We are benefiting in the portfolio, a number of moves that we made last week, and especially those earlier this week, are really starting to benefit. I'm referring to the number of moves again, including the recent addition of Axon and the addition we made earlier this week.
And the same shares, but also starting a position in palantir earlier this week and then adding to it right ahead of the company's AIPCon 6 event yesterday, and we'll be talking about more of that in just a second. Now let's step back and say, OK, what's helping with the market rebound today?
Well, it's the increasing likelihood that we are going to avoid a government shutdown. But there are some other factors out there as well. First and foremost, this morning, Foxconn said its AI server revenue is expected to grow. Listen to this. More than 100% both quarter on quarter, and year over year. Those are some big figures, but they really bring the latest round of support for the build out in data center, AI adoption.
Of course, these are very good things for our positions in Nvidia and Marvell, but also for Eaton. And remember, the comments that we shared with you earlier this week were Eaton really laid out its multiyear strategy through 2030. Data center, of course, is a nice piece of this, but it's not the only piece. But again, the expected strength in data center construction bodes extremely well for energy demand.
We continue to like Eaton as well. So that was one thing. The other, though, is I just alluded to is palantir and their upbeat AIPCon 6 event yesterday. Now they've had a number of these over the last two years. This latest one, it also showcased some real time use cases for its various platforms. But this one, I have to say, it really underscored palantir's move increasingly into the commercial sector.
But I would also say that it's what we heard after the event that was as important. First and foremost, CEO Karp said, the strength of demand is just unbelievable. He did that in an interview yesterday afternoon. And then on top of that, the company announced multiple new warp speed customers.
So, this is really, I think, removing some of the concern about palantir's business. I'm very glad that we added the shares when we did. And yes, we will be having some follow up comments this afternoon on palantir and we will be addressing our price target.
Now, those are some of the positive developments behind today's market rebound. But on the not so nice side, we have to talk about the March preliminary reading for the Michigan consumer sentiment index. Why? well, it plummeted to 57.9 from 64.7 in February, missing the 63.1 market forecast. At the same time, the preliminary take on inflation expectations for March jumped to 4.9%
That's the highest since November 2022. We also saw the five year expectation for inflation move to 3.9% from 3.5%. Now that jump 3.9% to 3.5% or from 3.5%. The context for that is it's the largest month over month increase since 1993. So as we think about that drop in sentiment and the concern about inflation, it's going to add to some of the concerns we discussed with you earlier this week about the consumer.
It also means that we are going to stick with our plan for three rated MasterCard shares. Now, in our comments yesterday and again this morning, we shared that yes, the market was due for a bounce and we are seeing that unfold today. But we continue to see multiple hurdles ahead that will likely keep the market choppy, even as it moves out of oversold territory.
For us, that means we are going to continue to stick with the current portfolio plan, something we touched on in this morning's opening comments. Now we're going to have much more about our thinking on why this is the case in today's weekly round-up. Trust me, you won't want to miss it. Tomorrow, Saturday, we will have more ripped from the headlines, single signals and confirmation points for the portfolio strategies, as well as some of the positions we have in the portfolio Sunday.
Well, that's another collection of articles and things for the soup. And included in that conversation, I wanted to share with you that there will be one with Bill McDermott, the CEO of SeviceNow, and he's going to be talking about enterprise software sales. I think you're going to find it very insightful, and trust me, you won't want to miss it.
So as you can see, we've got quite a bit coming at you even before we get to Monday. So please be sure to check your emails, your alerts. We want to make sure you're getting our latest thoughts and any action that we might make with the portfolio. Thanks for watching. Have a great weekend, and I'll see you back here on Monday.
