00:00We are thinking about how global narrative around AI continues to develop.
00:05Have you got any worries that we've been seeing, at least in the pressure in the stock market of late?
00:10No, I think this is a little garden variety correction because we've had a few wobbles, bad news in the private credit market.
00:17I think that we'll have maybe 5% correction.
00:20I think the year will finish on a very, very strong note because really the trend for artificial intelligence is so strong for data centers.
00:28In fact, when you look at the companies that have commented, basically they don't have enough capacity for all the demand and they've been able to raise prices.
00:36So that doesn't sound to me like a peak of a market that's ready to collapse at all.
00:42I'm just going to go out to some sound that we heard a little bit earlier in a summit that Bloomberg's been having over in Africa.
00:47They have the JP Morgan vice chairman joining David Pinto.
00:50Just listen to what he said about a correction.
00:53It's possible there is probably a correction there.
00:56And that correction will also create a correction in the rest of the segments in the S&P and in the industry because you are probably, in order to justify these valuations, you are considering a level of productivity that it will happen.
01:15But it may not happen as fast as the market is pricing.
01:19Daniel Pinto there of JP Morgan just speaking with our own editor over in Africa today, Margie.
01:26And I'm really interested as to, well, why you think this will just be, I think you called it a garden variety correction.
01:32What will be there to support it?
01:34Will it be NVIDIA's numbers that get us back on track?
01:36Well, I'm not sure anything NVIDIA could say will be enough to assuage market concerns.
01:43But really, when you look at the big market corrections, the economic corrections, they've all been driven by, frankly, Federal Reserve activity when they start to aggressively raise rates.
01:54So right here, it looks, you could say, well, the Fed is somewhere between neutral to slightly easing.
01:58And again, that is not the precondition.
02:00I think we've been through so many of these cycles all driven by the Fed that we think it's natural that we should have a big downward correction.
02:07And I don't think we will.
02:08I think we'll just have a continued period of slow growth for most of the economy.
02:12The tech sector is very strong because artificial intelligence is really a qualitative leap in the kind of technology that we've had over the last several decades.
02:22So we think it's just a small correction.
02:24In fact, if you look at NVIDIA, the stock really for this quarter, the fourth quarter, is really just about flattish.
02:31And all they are, except for Google, is the only one that's up for the quarter.
02:36So that says to me there's a lot of nervousness waiting for NVIDIA.
02:40But I think after that clears the air, I think we'll have a strong finish because the fundamentals are still so strong as far as the eye can see, which I would say is at least for another year or so.
02:48Look, we're looking year-to-date NVIDIA up 35 percent, but it has eroded about half a trillion dollars of market cap since the end of October, Margie.
02:56So is that a buying opportunity?
03:00Well, I think it's a moderate opportunity, yes, because at least you have some of the discount.
03:06The P.E. is around 40 times, and that's higher than the average stock, which is around 27 times.
03:12But on the other hand, they're leaders in their sector.
03:15They should have an above-average growth as far as the eye can see.
03:18So it's really not as high price as it was relatively a few months ago.
03:22So I'd say, yes, it's a good time to add to NVIDIA because their fundamental position is really strong.
03:28I think it's just, as I said, market nervousness.
03:31Short-term traders have gotten badly whipsawed back and forth in the last couple of months, and I think that's what's really causing this downward wave in volatility.
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