😨 Nvidia’s in some trouble

Today’s market performance 🏆️

S&P 500: -1.73% 📉
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Dow 30: -1.01% 📉 
Russell 2000: 1.79% 📉

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TOP STORY
😨 Nvidia’s in some trouble

Nvidia’s woes began last week, right after the company reported its second-quarter earnings.

• Did they fall way short?

• Completely wet the bed?

• Are they going bankrupt?

No, quite the opposite actually.

Nvidia, which has been the stock market’s savior this past year, reported more than $30 billion in sales in the second quarter, up 122% from the same period a year ago and ahead of the $28.7 billion Wall Street expected.

Plus, "profits from the quarter more than doubled to $16.6 billion, up from the $15 billion analyst projection."

So they did great; what’s the fuss all about? 🤔 

• Yes, indeed they are; in fact, over the past couple of years, Nvidia has completely blown expectations out of the water each time Jensen Huang steps up to the plate. 

• That's exactly why, this time, while Nvidia still posted impressive numbers, it didn't knock anyone's socks off.

News flash: Wall Street is a bit greedy.

Fast forward to earlier this week, and Nvidia posted the worst day in stock market history, losing $279 billion in value after a 9.5% share price drop.

It's not exactly the world record you’d want as a company, but it is impressive nonetheless.

Why’d it crash? It couldn’t have just been because of earnings.

• That is correct; the government had much more to do with this one. 

• On Tuesday, news broke that the Department of Justice was subpoenaing Nvidia to investigate potential antitrust violations.

• A.K.A. they are growing too big, too fast.

Seems like Nvidia is just too successful for its own good!

SPORTS
⛳️ TopGolf and Callaway are splitting up

TopGolf, a popular night out for frat boys and first dates alike, is set to be spun off as an independent company, no longer a part of TopGolf Callaway Brands.

Damn, what’d they do? Well, it isn’t really TopGolf’s fault. 

Just like we all did in 2020, blame the pandemic.

In 2021, Callaway decided to take a bold step by merging with TopGolf, hoping to attract a younger, more modern clientele (no offense, Dad).

At the time of the merger, interest in golf and outdoor sports was booming thanks to the pandemic’s impact on indoor entertainment.

This cleared the path for Callaway’s move to create “an unrivaled tech-enabled golf company delivering leading golf equipment, apparel, and entertainment.”

Damn, said that all in one go, let me catch my breath.

Anyway, unfortunately for Callaway, things haven’t gone as planned for their hopes of building a golfing empire.

• The partnership has been rocky, to say the least, with Topgolf Callaway Brands’ stock price dropping 38% over the past year and their sales growth screeching to a halt as consumers cut back on spending.

• Since the merger in ’21, Top Golf’s shares have plummeted over 60%, and the company has over $2 billion in debt.

I’m all for holding out for better days, but I think Callaway is wise to say "bye-bye, birdie" to this partner.

GEOPOLITICS
🎲 China’s $50 billion bet on Africa

This week, China’s president, Xi Jinping, announced that the country would offer a historic $51 billion in funding to Africa over three years.

The money will go toward backing more infrastructure projects and helping create at least 1 million jobs.

China, the biggest lender to other countries, promised to do 3x more infrastructure projects in Africa than it already does, focusing on its valuable resources.

Why? "China and Africa account for one-third of the world population. Without our modernization, there will be no global modernization," Xi said.

Aw, China wants to make the world a better place. It could be, but it isn’t just that. 

Unlike the 2021 summit, where China promised $10 billion in investments and loans, this time, the $50.7 billion in aid will be in the Chinese yuan, which will help pump more money into their economy and maybe even get others to join the yuan party.

As we’ve mentioned before, the BRICS alliance, with China as the primary catalyst, wants to replace the dollar entirely in trade.

And with BRICS beginning to add more members, it's no surprise that Xi is warming up to these African nations.

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