Thursday, June 6, 2024

Locator: 48075B.

Friday morning: these are the numbers we're expecting:

• 190,000
• 0.3% m/m
• 3.9% y/y
• 3.9%
• that's all you need to know

Offsetting those numbers (good, bad, indifferent):

• NVDA: 10: 1 split after market closes
• gives you all day to buy, sell, or hold
  

Apparently, during the day hit all-time highs but did not close at all-time highs: 

• Micron, Nvidia, and Eli Lilly;
• Lilly: hit $846 early in the day, but closed at $837, still in the green
• both MU and NVDA closed in the red
  

WTI: having a good day. Up about 2%.  

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Inflation Watch

McDonald's: I'm in the process of "moving" my diaries to the web for easier access by the grandkids and great-grandkids if they are ever interested. Growing up in Williston, North Dakota, I often camped two weeks every summer in the Black Hills, South Dakota, with mom, dad, and five siblings. This was from an entry dated August 24, 1968:

Then drove back to Rapid City.  Ate hamburgers, etc., at McDonald’s.  For ten people the cost came to only $4.65.  Clara paid the bill.

Yup: McDonald's, Rapid City, SD, 1968. Ten people: total bill $4.65. Wow. 

For the record, McDonald's will market a $5-meal during the month of June, 2024, to try to draw back customers who have complained about the high price of dining out. 

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US electricity demand, link here:

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Back to the Bakken

WTI: $75.56.

Active rigs: 36.

Five new permits, #40811 - #40815, inclusive:

• Operators: Enerplus (4); CLR
• Fields: Eagle Nest (Dunn); Antelope (McKenzie)
• Comments:
• Enerplus has permits for four Fort Berthold wells, lot 4, section 19-148-94; and, SESW 19-148-94; 
• to be sited between 690 FSL and 823 FSL and between 1095 FWL and 1165 FWL;
• CLR has a permit for a Salers Federal well, NWNW 27-152-94, 
• to be sited 275 FNL and 1079 FWL;

Two permits renewed:

• Liberty Resources, Sundhagen, #34984,
• Hess, AN-Lone Tree, #37593

Win, Place, And Show -- The Trifecta -- The Nasdaq Top 20% -- MSFT, AAPL, NVDA -- Not Necessarily In That Order -- June 6, 2024

Locator: 48074INV.

Congrats and a call-out to Elon Musk: first SpaceX crewed-launch successful and docking successful with International Space Station just moments ago, 12:34 p.m. CDT, June 6, 2024. 

Link here. 

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Global Economy 

Link here. 

SpaceX Starliner To Reach The Space Station Today -- June 6, 2024

Locator: 48073NASA.

12:15 p.m. CDT: at 15 meters separation. Will hold at the 10-meter separation point. Waiting for ideal lighting. Over Algeria right now. Going into darkness. Six-minute lighting hold before docking begins. Now holding at 10-meter hold, waiting for better lighting. Contact and capture at 12:34 p.m. CDT over Indian Ocean. Welcome aboard!

12:00 noon CDT: 5 cm / second -- speed. 300 cm / minute = 3 m / minute. Approaching. Both are traveling about 17,500 mph. Relative to each other, almost identical.

11:58 a.m. CDT: test-fired five (5) thrusters; able to recover four (4) thrusters. Thrusters being used to slow velocity of capsule. Now 80 feet away from space station. Mixing meters and feet in audio. Meters for engineers; feet for average American. Now 63 meters from docking station. 33 minutes away from "docking window." May "hold" longer before actually docking.

11:24 a.m. CDT: first docking attempt failed; next opportunity ~ 12.36 p.m. today; about an hour from now. As many as four (4) thrusters failed to fire. Will test-fire three thrusters between now and time of next docking attempt. So many glitches really tells us how amazing the US moon landing was back in 1969, and subsequent moon landings -- all successful, except one unable to complete moon landing mission but returned safely to earth.

Link here.

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Rice

 

 

 

Nvidia -- NVDA -- Opinion -- Source -- June 6, 2024

Locator: 48072TECH.

Before we get to the commentary, first this, also from twitter:

Link here from twitter:

With $NVDA becoming the second most valuable company in the world yesterday, I thought it worthwhile to lay out my thoughts both near-term and longer-term depending on your time horizon.

My belief is that over the next 3-4 years, Nvidia revenues are likely to roughly triple from current levels with the stock roughly doubling. However, before year-end we may be near a digestion phase for the amounts spent on AI over the past 1 ½ years since the launch of ChatGPT in late 2022.

In this regard, Sequoia, which is a prominent VC investor in the AI space including a lead investor in the seed round for $NVDA in 1993, did a presentation recently in March. Sequoia estimated that the AI industry spent $50B on the NVidia chips used to train advanced AI models in 2023 but brought in only $3B in revenue. I believe a slowdown in AI spending from the torrid rates seen over the past year will be healthy as companies figure out where this spend gets the return on investment necessary.

Large software vendors that just reported the April quarter such as $CRM, $MDB, $SNOW, $WDAY were optimistic on the benefits of AI to their businesses. However, future expectations were cut despite AI benefits as the economy slows, companies cut back on employees due to greater efficiency and the increased spend on AI is coming out of other budgets.

Even during the buildout of the internet, $CSCO, which became the most valuable company in the world in 2000, went through periods of severe stock declines as concerns rose about internet spend digestion. Cisco’s stock saw declines of 26% in late 1995, 38% in early 1997 and 37% in late 1998 as revenue growth rates while still hugely positive either declined or plateaued. Despite these intra-year declines, the stock was up during each of those years in total and increased ~4000% to its peak in 2000 from the end of 1994.

For perspective, Cisco, the leading enabler of the internet infrastructure buildout, since the end of 1994 (the launch of internet web browser Netscape Navigator) saw its revenues increase over 15x from $434M (Oct qtr of 1994) to $6.7B (Jan qtr of 2001) without ever having a sequentially down quarter. Nvidia by comparison since the end of 2022 (the launch of ChatGPT) has seen revenues increase by “only” over 4x over 1 ½ years from $5.9B (Oct qtr of 2022) to $26.0B (April qtr of 2024). AI spending driven by the biggest companies in the world is healthier today than the early spend on the internet when internet advertising models were unproven.

Obviously at some point an actual contraction in AI spend and stock prices is likely as was the case with the internet spend from its peak in 2000. Cisco’s revenues declined 36% in six months to $4.3B (July qtr of 2001) before starting to grow again while the Nasdaq declined 78% from peak to trough over 2 ½ years (and Cisco’s stock declined 89%.) However, I believe we are years away from that ultimate AI peak build out occurring but we will not know that until time passes much like back during the internet buildout.

Much could be said, but I'm sure we all have our own thoughts. 

80th Anniversary Of D-Day -- June 6, 2024

Locator: 48071B.

Wow, after yesterday, are there any big stories left? Yup --

• I've never seen so much time wasted on CNBC as the constant focus on Elon Musk's Tesla pay package. 
• JUUL: couldn't handle the loss of "Black" voters: Biden administration allows JUUL back on the market.
• Memphis, Musk and more; LOL. Alliteration. From The WSJ. Link here.
• pending approval by local authorities. LOL. As if it won't be approved.
• xAI was launched last summer; buying all the Nvidia chips he can
• TSM and Singapore;
• the big story here? Stories coming out of "ABC" -- anywhere but China
• every time I see a headline with TSM in it, I think of BRK / Buffet
• EU cuts rates; Canada's central bank announced rate cuts yesterday
  
• US Fed quiet
• counterintuitive: one of the best things that ever happened to Nvidia -- when the US restricted / banned export of high-end Nvidia chips to China
• Pelosi: making a killing on Nvidia; some are upset about that; not me. Link here.
• from July 15, 2022:
• today, we learn that Nancy Pelosi revealed that of yesterday she had a new multi-million dollar position in Nvidia. This may or may not be true. Link here.
• so folks have had two years to buy into Nvidia; oh, give me a break on the Pelosi story; 
• she was ahead of Cramer on this one. I'll take my info anywhere I can find it.
• two big-name Republicans vote against supporting women's rights: Cotton and Scott.
• both stories need to be fact-checked; this certainly can't be true

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Back to the Bakken

WTI: $74.88. 

Friday, June 7, 2024: 57 for the month; 121 for the quarter, 320 for the year

• 39388, conf, BR, Watchman Peak 1-18-11 MBH,
• 38056, conf, Oasis, Wood 5498 12-25 3B,

Thursday, June 6, 2024: 55 for the month; 119 for the quarter, 318 for the year 

• 40279, conf, CLR, Thorvald 5-6H,

RBN Energy: relatively stable 1Q24 E&P earnings shift analysis to company performance.

A macro view of U.S. exploration and production (E&P) company performance over the last quarter century reveals repetitive boom-and-bust cycles driven by periodic extremes in crude oil pricing, including price crashes in 2008, 2014 and 2020. That history contrasts with the remarkable stability in West Texas Intermediate (WTI) realizations since mid-2021 as the industry got its footing post-pandemic. Assisted by a new commitment to financial discipline, producers have generated relatively stable, historically solid overall quarterly earnings and cash flows. But the devil’s in the details, and in today’s RBN blog we delve into peer group and individual company performance as well as overall industry trends for Q1 2024.