Oil prices surge to two-week winning streak as Iran supply fears grip markets
By In the wake of Super Micro Computer’s (SMCI) 123% sales growth, Nvidia (NVDA) has also woken up, and expectations for its quarterly announcement on February 25th remain high. Due to a replacement cycle since the Vera Rubin GPUs are five times more powerful and ten times more energy efficient, the long-term outlook for Nvidia remains amazing, so it will likely be a $10-trillion market cap company by the end of the decade. I should add that Nvidia remains approximately 15% of my Large Cap Growth portfolio.
The Financial Times reported that some economists are skeptical of Fed Chairman Kevin Warsh’s opinion that AI will be deflationary. Specifically, Warsh said that AI will trigger “the most productivity-enhancing wave of our lifetimes – past, present and future.” As a result, Warsh expects that the AI productivity wave will expand output and pave the way for the Fed to cut key interest rates without triggering a rise in prices. Naturally, these comments are going to make Warsh’s Senate confirmation hearing much more interesting.
The U.S. and Iran met in Oman to discuss dismantling Iran’s nuclear program. The U.S. wants Tehran to (1) stop from enriching uranium, (2) curb its ballistic missile program, and (3) end its support for regional proxies that destabilize the Middle East. Iran has said it is willing to discuss only its nuclear work. Obviously, if these negotiations fail, the U.S. may conduct another military strike, which is why it has assembled a substantial Navy armada in the region. However, Iran did seize a couple of oil tankers prior to the negotiations and said the talks were “positive.”
Specifically, Iran’s Foreign Minister Abbas Araghchi told Iranian state TV after the talks concluded that he thought the sides “can reach an agreed framework for future talks” if the process continues in the same vein. Araghchi added, “The subject of our talks is strictly nuclear, and we are not discussing any other issues with the Americans.” Obviously, Iran is an expert in delaying talks, and the U.S. has assembled an armada to attack key nuclear and military targets in Iran, so it will be interesting if the U.S. loses patience with Iran’s negotiators.