August 31st Daily Market Note: Can Broadcom (AVGO) revitalize the AI Trade?

Premium Daily Note: August 31st, 2023

Daily Market Note: August 31st 2023 by Larry Cheung, CFA  

Bulls turn what was originally a difficult August to one of hope for better days ahead 

Forward-looking Conclusions of this note:  

• Macro: U.S Indices are set to close out August with very minor losses after the technology correction from the beginning of the month 

• Stock-Specific: U.S. Retail Thrift Shops continue its industry indigestion of a very challenging backdrop with profit margin erosion, guidance cuts, and rising investment capex spending. Previously discussed name Broadcom (AVGO) in Private Group Chat is near all-time highs ahead of earnings this evening. Longer-term, regardless of its earnings outcomes tonight, I see AVGO reaching/touching 930-940+ or better in late 2023/early 2024. 

From Private Group Chat on 8/24 when AVGO traded 900. Now at all-time highs 920 ahead of earnings. Just a reminder that when Members first join group chat, they see a blank chat channel as previous message history is not shown (just a quirk of Whatsapp Functionality)

• Bonds: I will now be watching for the inverse correlation between the 10Y Yield and the Nasdaq-100 to see if it continues to break down, which will be an initial sign that falling rates stops being tailwinds for the market if the correlation breaks. 

• China: Pinduoduo continues its advance and I’m now setting my sights on…