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The paywall is removed from this post.
Nvidia shares have nearly tripled in 2023, making it the S&P 500’s best performer. The stock now commands a premium valuation. It trades at 20 times forward sales estimates and 42 times forward earnings, according to FactSet.
The chip designer at the centre of global AI euphoria releases financial results and forecasts following today’s closing bell.
Here is an interesting article from Helsingin Sanomat about China’s economy. For the article, Nordea’s Chief Economist Tuuli Koivu and the Head of the Bank of Finland Institute for Emerging Economies (Bofit), Iikka Korhonen, were interviewed. No paywall.
"A relatively large amount of business there is held, for example, by the elevator and escalator manufacturer Kone, the airline Finnair, the packaging company Huhtamäki, engineering companies Cargotec, Konecranes, and Wärtsilä, as well as forestry companies.
”All those companies that manufacture products needed in the construction industry may suffer to some extent. However, I do not believe that the escalation of China’s economic problems reflects very broadly on the global economy anymore. Most of the weakening in China’s imports has already occurred,” Korhonen says."
They’re on the same page as Vartti! 
Elsewhere… or rather, in this part of the world.
The Eurozone services (the larger part of the economy) Purchasing Managers’ Index (PMI) dropped to almost 50, which means activity no longer grew compared to the previous month.
The manufacturing figure tumbled to 42, but an industrial recession is nothing new. 
Services:
Manufacturing uugh.
And aren’t those coming out only now at exactly 11? Germany’s and France’s were already released; Germany is really deep in the mire.
Edit: Yeah, last month’s figures match that. Germany today:
German Mfg PMI Flash Actual 39.1 (Forecast 38.8, Previous 38.8)
German Composite PMI Flash Actual 44.7 (Forecast 48.3, Previous 48.5)
German Service PMI Flash Actual 47.3 (Forecast 51.5, Previous 52.3)
Services have also started to dive.
That’s right, @Verneri_Pulkkinen has gotten some secret leaked data from the future, or maybe just forecast charts?
Edit: Here are the figures
Services are deep in the mire, the manufacturing dive is leveling out slightly.
Interpretation from Nordea’s Ninja regarding the ECB
https://twitter.com/JanVonGerich/status/1694253074632630447?s=19
True, I posted old information.
Still ugly numbers. Services worse than last time.
These don’t look good, but I’m sure the ECB will manage to spin even these into something positive and raise interest rates. And they won’t stop until the shit has hit the fan all over the walls of Europe. It’s already in the fan. Personally, I believe we have already gone too far. A recession is coming and unemployment will start rising, and unemployment cannot be fixed quickly by cutting interest rates.
edit: oops, I was supposed to reply to @Jarnis instead of Verner, but this works too.
" “A turn for the worse has occurred,” says Petri Malinen in a statement.
Juho Keskinen, economist at the Mortgage Society of Finland (Hypo), notes that the employment rate dipped now for the first time since the COVID crisis. According to Keskinen, the number of employed people fell by 62,000 compared to a year ago."
To make up for posting old data here (
), here is a link to the S&P press release with more to read.
https://www.pmi.spglobal.com/Public/Home/PressRelease/47840ba665f24e19b896088b4d160c6b
In short: it smells like stagflation. Prices are rising but demand is shrinking. Even hiring is starting to slow down.
To further stir the pot, similar figures from Britain. It’s not really worth getting worked up over individual data points, but now a large portion of the indicators are flashing red, especially in Europe’s case. For services, the slowdown has been very sharp and something more typical of, for example, construction. Demand apparently held up through the summer, but we’ll see what happens in the winter.
These figures could be expected to lower interest rate forecasts. And since central banks like to follow market expectations, the probability of further ECB rate hikes is in sharp decline.
OP’s Hännikäinen and European PMIs:
https://twitter.com/JariHnnikinen1/status/1694264686974222822
Observation from a guy at Akava regarding furloughed architects:
https://twitter.com/PasiSSorjonen/status/1694252016225136772
https://twitter.com/MarketWatch/status/1694301767960268900?s=20
HSBC-Finnish translator:
When we sell terribly, terribly expensive US stonks, you catch them!
Hasn’t it been noted that the ECB doesn’t look at anything other than core inflation, and it is still too high. Although, at this economic pace, it will be at 1-2 very quickly.
Central banks have been raising their interest rates for a long time now. In the US, rate hikes may be over, as inflation has fallen significantly. In Europe, the situation is worse. Inflation has not turned as desired, and one or even several more hikes are definitely still to come. The ECB cannot leave inflation at its current level, and it will not do so.
This morning I was again sketching out for myself in a “common sense” way what all this could mean next for the stock markets. I won’t lose my cool if someone disagrees, so please challenge me or share your own view if my thinking is flawed or if you see things differently.
The situation is complicated by the fact that the US and Europe are moving at different paces. The turning of inflation—almost normalization—has been received positively in the US stock markets, and the same reaction is surely expected in Europe once inflation is eventually in a similarly clear decline. It actually seems like the rest of the world is currently dragging down the US economy.
Lower inflation improves economic predictability for companies and consumers and, for its part, gradually turns demand upward. The final “catalyst” for the improvement of the situation can be considered the central bank’s announcement of ending rate hikes, which the market will certainly interpret as the central bank believing inflation is under control. Next, interest rates would possibly already head towards a cautious decline.
Simply ending the ECB’s rate hikes is unlikely to send European economies soaring, but perhaps the decline of the Finnish stock market can finally be halted. Different sectors react to situations at different paces. The end of rate hikes should stop the decline of interest-sensitive sectors, such as construction and real estate, but a real recovery will have to wait for rates to turn downward, or otherwise a long period of adjustment to the current situation will follow.
The situation in the financial sector has been on my mind for some time. I can’t quite interpret the market’s reactions, although I suspect they are overly cautious, at least in the case of Nordic banks. Rates might not rise in Europe anymore after September, but they aren’t about to turn downward either. Perhaps some “major disaster” scenario is partly keeping banks cheap. It’s hardly just about the return of deposit interest rates to checking accounts… The market seems, however, to be taking a firm view on the future of the banks’ business. I suppose nothing else explains better the P/E ratios starting with seven for quality banks, where no massive moves are in sight for the E-component (earnings).
This leads smoothly into investors and sentiment. I believe that investors will remain cautious even if some indicators turn positive. This is ensured especially by geopolitics, namely the China and US export restrictions, China’s posturing towards Taiwan, and of course Russia’s mess in Ukraine. Already now, but also throughout the autumn, companies’ weakened earnings reports will keep volatility relatively high and the mood low.
Autumn seems lost for the Finnish investor without something surprising. Could it be China focusing on turning its economy around instead of posturing over Taiwan? An unexpected de-escalation in China-US relations? A Russian collapse in Ukraine? One can hope…
I don’t consider the recent personal weighting towards OMXHEX (Helsinki) that I’ve mentioned in the thread to be a mistake. In my opinion, there are good, stable companies available at a good price. For many growth companies, the end of the year could be just as bleak as the beginning.
As for the rest of the year—I will be closely following a few cyclical consumer goods and services companies and especially semiconductor companies (in their own forum thread) throughout the autumn. AI demand is, however, interfering with tracking the semiconductor side. The first signals of the coming rise should be found in these sectors, and at that point at the latest, it’s time to increase stock weighting if there’s still capital left.
I’ll add my spoon to this PMI soup too 
the drop in the service sector was worryingly sharp in August, but it should also be noted that it is only one data point. And if one has to find something positive, manufacturing PMIs are no longer quite as negative as they were in July. Macro comment here.
The comment also features an interesting chart showing that some countries are doing clearly better than others when it comes to stagflation risk. Germany, Sweden, and the UK are in the weaker group, while the US and its peers are in clearer waters. Finland, by the way, would be roughly around Denmark’s position in that chart, meaning it is on the weaker side as well.
In addition to the US and the EU moving at different speeds, internal development within the EU is also out of sync.
But it is generally on the decline, and I believe it will continue to fall even if interest rates are no longer raised.
@Marianne_Palmu @Verneri_Pulkkinen
I could use some help. At my workplace, our former owner and founder is of the opinion that the current economic situation in Finland will be just as bad as the depression of the 90s. My own view is different, but since I didn’t live through that era myself, it’s hard to just go on gut feeling.
Therefore, I would like to know which metrics you think should be looked at to get some kind of facts on this? Which metric provides the best general overview of the Finnish economy then vs. now, and would you have a chart to share on its development?
Thanks if you have time to help, and hopefully this wasn’t completely the wrong thread for this message 
