Nvidia's Report and Earnings Concentration
Nvidia (NVDA) is moving full speed ahead, though its forward guidance came in a bit light against the loftier expectations. It makes sense to temper hopes here - do not stretch the current growth rate on the top line or the growth rate in margins too far into the future. Still, NVDA remains a bellwether, and its signal for the wider market is good.
The Q3 gross margin guide showed a small blemish, coming in under 75%. Many companies would happily take those numbers.
The bigger concern is concentration. Nvidia (NVDA) alone makes up about 18% of expected S&P 500 earnings growth for calendar year 2026. Micron (MU) adds another 14%. That means two stocks drive about a third of the whole S&P 500's earnings. So far the earnings picture holds up, but the reliance on a handful of names stays high.
Jackson Hole and the Fed
Fed chair Warsh speaks tomorrow at Jackson Hole - his first appearance as chair at this important conference. The market may end up disappointed. Traders want clarity on whether 2% is still the inflation target and, if so, what the Fed plans to do to reach it. Warsh dislikes forward guidance of any kind and seems reluctant to give out much information at all, so that detail may not come.
The event is still a chance for him to reset some of the fallout from his press conference after the most recent FOMC meeting, which did not sit well with markets. The open question is his reaction function - what data he is watching to make decisions. He has handed that to task forces, and it would help just to know whether the PCE remains the Fed's preferred inflation gauge.
Because expectations are already low, the market could skate through a speech that says little. One thing worth hearing is his view on the buyback program that Treasury Secretary Bessent announced, and whether it clashes with Fed policy - though he likely avoids that topic.
The Jackson Hole speech has no Q&A at the end, so Warsh cannot be pressed by journalists on anything, including what is happening at Treasury. What he says is all there is. Attention will then shift fast to other Fed speakers, since even with Warsh staying quiet there is a crowd of Fed voices, and their comments matter heading into the September meeting.
Washington's Agenda
The House of Representatives returns Monday. The Senate does not come back until September 14th. The main item is whether the House passes the Senate's version of a bill to avoid a government shutdown before the election. The House passed one version; the Senate passed a different one that funds the government through December 11th. It now returns to the House, which will likely act this week - nobody wants a shutdown right before the election.
More interest sits with the Senate when it returns in mid-September. A crypto bill is pending. A large defense spending bill is in limbo. With college football season starting, a big college sports bill is drawing as much attention as anything else on Capitol Hill.
The Value versus Growth Myth
A common question lately is when value will take leadership from growth. That framing rests on a misconception. There are three ways to think about growth and value: the actual fundamentals (does a stock have growth or value traits), preconceived notions (tech is "growth," utilities are "value"), and index construction - which is where investors get tripped up.
The data undercuts the idea that value is waiting for its day. Using the Russell 1000 Value index against the Russell 1000 Growth index, Russell 1000 Value is up 23% year to date, while Russell 1000 Growth is up only 3% year to date. Go back a full two years and value still outperforms growth. It pays to dig into these numbers rather than lean on anecdotes and assumptions. By the Russell 1000 measure, value has been handily beating growth.
