Last week’s top story was Nvidia. In short, NVDA had another amazing earnings report and its stock price moved to a new high as a result. NVDA’s price gain also helped large cap growth and tech stocks in the aggregate to outperform last week and even helped the S&P 500 maintain its weekly winning streak (now at six weeks). Outside of NVDA and some other growth names, though, it was overall a tough week for stocks. In fact, even last Thursday when NVDA was soaring, the Dow Jones Industrial suffered its worst day in over a year going back to March 2023. Also, despite some positive inflationary news last week, you could not tell in the interest rate markets. Yields went up and expectations for a Fed cut soon went down. On the latter, the market is even starting to price in the possibility (albeit a very slight chance) of a rate hike before a rate cut. As for the positive clues on inflation, we did see notable drops in oil, copper, and gold prices last week.

NVDA’s earnings were also strong enough to get the first quarter 2024 earnings growth number for the S&P 500 to be 6%. This now ranks as the best quarter for earnings growth since the first quarter of 2022. Earnings expectations are also improving. Year-over-year earnings growth for 2024 is now expected to be nearly 11%. Earnings expectations for 2025 are now approaching 14%. 

This week, the Fed’s favorite inflation indicator — the PCE — is released this week. The expectation for April core PCE is 2.8%.

Let’s talk about Nvidia a bit more. Everybody else is, and for good reason. Not only is it dominating the stock market this year, but it’s also dominating earnings. Over the last year, for example, NVDA has contributed nearly 40% of the S&P 500’s earnings. Though that expectation is to drop to only about 10% of earnings over the next 12 months, it’s clear that NVDA is currently the market’s bell cow. One can see it in its share price and how the movement of that price has impacted the overall market’s price/earnings ratio. In other words, when NVDA’s share price is rising, so is the S&P 500 price/earnings ratio, and vice versa. 

As many are asking, is NVDA — or, more specifically, artificial intelligence, a bubble? Or is it for real?

Given historical precedents, the answer is likely “yes” to both questions. The economic reality of AI can already be seen in recent earnings reports. As for the bubble comment, that can be seen in the valuations. Since the AI boom started, the combined market value of Alphabet, Amazon, and Microsoft has jumped by nearly $3 trillion. This increase in market cap is ~150 times the $20bn in revenue that generative AI is forecast to add to the cloud giants’ sales in 2024. For a frame of reference, the typical price/revenue ratio (or more commonly known as price/sales ratio) for the S&P 500 is below 2.0. It’s currently (thanks to NVDA and the enthusiasm for AI) closer to 2.8. At recent market peaks, it was just over 3.0 at the beginning of 2022 and at 2.4 at the end of the run in 2000. 

In short, this would qualify as expensive. For more on NVDA and other market topics, if you do not get our Weekly Monday Morning Bullets, please reach out to your Orion sales team contact and ask about the Bullets.

Bottom line:


Stay invested. Stay diversified. Stay disciplined.


If you have any questions or comments, please let us know at or at Thank you for your time and trust. See you next week!


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Key Data

Stocks, Bonds, Alternatives, & Real Assets as of May 24, 2024

Security Name Risk Score 1 Wk 1 Mo QTD YTD 1 Yr 3 Yr Ann.
Global Equities (60% US, 40% Intl) 100 -0.62% 3.98% 1.25% 9.30% 23.30% 5.66%
S&P 500 Total Return 102 0.05% 4.74% 1.17% 11.85% 30.89% 9.82%
Dow Jones Industrial Average 97 -2.30% 1.76% -1.60% 4.44% 21.57% 6.47%
NASDAQ 100 Total Return 122 1.42%% 7.41% 3.15% 12.15% 39.39% 12.21%
TV Benchmark 107 -0.28% 4.64% 0.91% 9.48% 30.62% 9.50%
Morningstar US Large Cap 102 0.23% 5.27% 1.89% 13.18% 33.53% 10.32%
Morningstar US Mid Cap 113 -1.01% 2.55% -1.84% 6.87% 24.06% 4.33%
Morningstar US Small Cap 125 -1.31% 2.46% -2.85% 2.68% 21.43% 0.87%
Morningstar US Value 98 -1.76% 1.57% -1.42% 6.87% 21.86% 7.38%
Morningstar US Growth 126 0.43% 5.54% -0.32% 7.98% 28.62% 3.81%
MSCI ACWI Ex USA  98 -1.03% 4.24% 2.14% 7.05% 16.27% 1.59%
MSCI EAFE  101 -0.84% 4.11% 1.48% 7.50% 16.74% 3.78%
MSCI EM 98 -1.48% 5.00% 4.29% 6.83% 15.04% -3.67%
Bloomberg US Agg Bond Index 27 -0.28% 1.50% -0.91% -1.68% 2.05% -3.05%
Bloomberg Commodity Index 70 -0.58% 2.73% 6.45% 8.79% 10.20% 8.00%
Wilshire Liquid Alternative Index 25 -0.23% 1.10% 0.27 3.44% 8.69% 1.33%
US Dollar 10 0.27% -1.07% 0.17% 3.35% 0.81% 5.24%
Bloomberg US Treasury Bill 1-3mo 1 0.12% 0.49% 0.84% 2.17% 5.55% 2.94%
Source: Morningstar

The TV Benchmark represents an average of the S&P 500, Dow Jones IA, and NASDAQ 100 return indexes. The Orion Risk Score represents risk relative to the global equity market.



Interest Rates as of May 24, 2024

Rate This Week 1 Wk Δ%
13-Wk Treasury Yield 5.24% 0.00%
10-Yr Treasury Yield 4.47% 0.05%
Bloomberg US Agg Yield 5.20% 0.07%
Avg Money Mkt Yield 5.12% 0.00%
Avg 30-Yr Mortgage Rate 7.05% -0.16%
Sources: Yahoo Finance, S&P Global, Crane Data, BankRate



Key Economic Data Last Week

Data Point Expectation Actual
Existing Home Sales 4.21M 4.14M
New Home Sales 675,000 634,000
Durable Goods Orders -0.5% 0.7%
Sources: MarketWatch, First Trust



Key Economic Data This Week

Data Point Expectation Release Date
Q1 GDP (First Revision) 1.2% 5/30/24
Personal Income 675,000 5/31/24
PCE YoY 2.7% 5/31/24
Core PCE YoY 2.8% 5/31/24
Source: MarketWatch


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