Strategist talks Nvidia earnings, Fed cuts and markets

Charles Schwab chief investment strategist Liz Ann Sonders joins Market Domination Overtime to discuss Tuesday's market movement (^DJI, ^IXIC, ^GSPC) ahead of two major events — Nvidia (NVDA) earnings and the Federal Reserve's interest rate cut.
Sonders calls Nvidia the "poster child" for AI, and explains that the recent pullback in the technology sector is largely due to investors looking for revenue generation from capital expenditures spending. She believes that this issue will not be resolved after Nvidia reports earnings, yet after the earnings call, investors "might start to fill in some of the blanks given what Nvidia is going to say, especially as it relates to their outlook."
As interest rate cuts loom ahead, Sonders expects a 25-basis-point cut at the Fed's September meeting. While some investors have their hopes up for a 50-basis-point cut, she warns, "be careful what you wish for, because if you look at all historical rate-cutting cycles, there is a pretty meaningful difference between what the market does, particularly if you measure it via things like maximum drawdown, when the Fed is moving aggressively versus the fed moving more slowly. Typically, if they're moving aggressively, they're combating a recession or a financial crisis or some combination thereof. So you actually want to be cheering for a Fed that has its eye on the escalator on the way down, not the elevator on the way down."
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[Grace.h-to]

But for real Nvidia is dong great things in the AI space. I believe they still have lots and lots of potential. But I've lately been thinking about diversifying my portfolio, maybe put in 20k in stock like Palantir. They seem to be doing great things in the space. What do you think about that?

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[auboisdaline]

AI stocks are poised to dominate in 2024, and I'm particularly bullish on NVIDIA. They’re exceptionally well-positioned for long-term growth and play a crucial role in supporting other AI companies. I know someone who achieved over 200% returns with NVIDIA, which strengthens my confidence. I'm also open to considering the other recommendations you've made.

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