In today’s briefing:
- Hollysys (HOLI US): In Court Today …
- As Expected from Our Earlier BOM/CoWoS Analysis, Consensus to Raise Nvidia Estimates Inevitably
- Year-End Rally to Continue?; Riding the Trend Higher; Buys in Education Services and Retailers
- US Rates Nugget: 4 Charts on Why November Data Will Reignite the Hawks
Hollysys (HOLI US): In Court Today …
- A fortnight after co-COOs pitched a US$25/share indicative Offer for Hollysys (HOLI US), Ascendent Capital, holding 13.7%, tabled a US$26/share Offer. The Recco/Dazheng consortium offered US$26.50 a week later.
- There is currently a dispute over the ownership and control of Ace Lead’s shares in Hollysys, which was subject to an injunction hearing in the Hong Kong High Court.
- That hearing took place today. So I went along to hear first-hand the key arguments from both sides.
As Expected from Our Earlier BOM/CoWoS Analysis, Consensus to Raise Nvidia Estimates Inevitably
- Nvidia reports/guides a better than expected 3Q/4Q23 sales, margin, and EPS on stronger AI GPU sales growth of nearly 3x.
- Nvidia reports a healthy 3.04 MOI, down 5% q/q and down 37% y/y and contributes nicely to account for 9% of TSMC sales.
- In spite of concerns on good news priced in, seasonal weaker 1Q24, and MI300X/ASIC alternative AI solutions, we expect more raise to come in 2024-2025E.
Year-End Rally to Continue?; Riding the Trend Higher; Buys in Education Services and Retailers
- The broad equity market has been on an absolute tear since we discussed in our 10/31/23 Compass how risk/reward favored buyers as key supports were being tested on SPX/QQQ/IWM
- Furthermore, we discussed in our 11/7/23 Compass our belief that this was more than just another counter-trend rally, and that it is likely the start of a significant year-end rally.
- Bullish developments have only continued; among them includes 3.5-month downtrend reversals on the S&P 500 and QQQ. We expect more upside into year-end and beyond.
US Rates Nugget: 4 Charts on Why November Data Will Reignite the Hawks
- Welcome to this US rates nugget with three charts on why November data from the US economy could refuel the hawkish bias within the Federal Reserve.
- First, our ISM Services model hints at a large rebound in the ISM number released on December 5.
- ISM Services jumps to >60 in our models when you adjust for the spreadsheet wizardry of the Institute of Supply Management (remember the abysmal prints in Nov/Dec of 2022) as the seasonal adjustment factors are much more helpful than a year ago.
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