Nvidia's Earnings Disappoint Despite Strong Growth, Impacting Tech Sector and Market Sentiment

From Silicon to Snowflakes

In the premarket trading session on Thursday, U.S. stock futures and ETFs were in high spirits. The reason? Snowflake's fiscal Q3 results were a spectacle, with shares jumping over 24% as earnings and sales surpassed analyst predictions. This is a welcome respite after yesterday's slight disappointment with Nvidia. However, the broader market remains in a state of limbo. Investors are neither inspired nor inclined to sell off stocks, leaving the market in need of a boost. Meanwhile, Bitcoin is seizing the moment, climbing the charts with gusto. Nvidia, the darling of the stock market, had its moment in the spotlight. Investors have pegged it as the first company potentially reaching a $4 trillion market cap, currently valued at around $3.6 trillion -- comparable to the UK's annual GDP. The company's Q3 results were impressive, with sales and net income doubling year-over-year to $35.1 billion and $19.3 billion, respectively. Demand for its AI-driven graphics cards has pushed net margins to 55%. Despite these stellar figures, the market wasn't entirely convinced, with Nvidia's stock dipping 2.5% in after-hours trading due to vague short-term forecasts. The transition from the Hopper to the Blackwell chip models is underway, with "staggering" demand for the latter, according to Nvidia's CFO. The market's message? "We're watching you closely, don't disappoint us." The AI narrative remains intact, but the lack of a market jolt leaves U.S. equities in a lull. Elsewhere, U.S. weekly jobless claims fell unexpectedly, with initial claims dropping by 6,000 to 213,000 for the week ending November 16. This suggests a potential rebound in job growth for November, despite earlier disruptions from hurricanes and strikes. Geopolitical tensions in Ukraine persist, with reports of Russia potentially escalating military actions, impacting safe-haven assets like gold. Wall Street's main indices were stagnant yesterday: the Nasdaq 100 dipped 0.08%, the Russell 2000 edged up 0.03%, and the S&P 500 remained unchanged. Europe is struggling for direction, with the Stoxx Europe 600 rising only once in the last seven sessions, though its previous day's loss was a mere 0.02%. Bitcoin, the year's most profitable institutionalized asset, reached a new high, nearing the symbolic $100,000 mark, fueled by rumors of a new White House position for digital asset policy. Other asset classes, including bonds, EUR/USD, gold, and oil, have been trading within narrow ranges. Investors remain uncertain about U.S. interest rates, with futures contracts showing a 52% probability of a Fed rate cut in December, compared to 48% for a status quo. This division is a stark contrast to a week ago when a rate cut was favored by 75%. The equity market's indecision is linked to this uncertainty, as well as the unknown future U.S. Treasury Secretary. Donald Trump continues consultations, with names like Kevin Warsh and Marc Rowan in the mix. On the downside, Bill Hwang, founder of Archegos, received an 18-year prison sentence after his fund's collapse wiped out $100 billion in market value. In Asia, markets are mostly in the red this morning. Japan's Nikkei 225 fell 0.8%, while Sydney, Shanghai, and Seoul ended flat. Taiwan dropped 1.1%, with TSMC reacting to Nvidia's decline. India lost 0.7%. The Stoxx Europe 600 is flat, but futures on the main three Wall Street indices are up by 0.3%. The dollar is worth EUR 0.9499 and GBP 0.7910. The ounce of gold rose to USD 2,667. Oil regained some ground, with North Sea Brent at USD 74.18 a barrel and US light crude WTI at USD 70.16. The yield on 10-year US debt is up to 4.44%. Bitcoin rose to USD 97,446.

Nasdaq futures lead declines after Nvidia's forecast disappoints

(Reuters) - Nasdaq futures led declines among U.S. stock index futures on Thursday, with Nvidia's shares falling in premarket trading after investors were unimpressed by the AI leader's revenue forecast. At 04:20 a.m. ET, Dow E-minis were down 80 points, or 0.18%, S&P 500 E-minis were down 25.75 points, or 0.43%, and Nasdaq 100 E-minis were down 127.75 points, or 0.62%. Nvidia beat quarterly profit expectations, but the company projected its slowest revenue growth in seven quarters and its adjusted gross margins shrank, sending its shares down 3.8% in premarket trading. "At face value, Nvidia has once again generated the kind of growth that most companies will never achieve in their lifespan," said Dan Coatsworth, investment analyst at AJ Bell. "What's troubled investors this time was a quarter-on-quarter decline in gross margins, with guidance for them to fall further in the coming quarter and weaker-than-expected forward guidance for revenue." The sentiment spread to other chip stocks, with Broadcom down 1%, Qualcomm losing 1.1% and Advanced Micro Devices off 0.7%. Growth stocks also dipped. Microsoft was down 0.3%, while Apple and Amazon.com slipped 0.2% each. Nvidia has led much of the U.S. market rally since mid-2023, on expectations that artificial intelligence integration could boost corporate profits. The stock has risen more than ninefold in the past two years and the company boasts a market value of $3.5 trillion. Wall Street indexes have retreated from their record highs, with post-election euphoria giving in to caution after President-elect Donald Trump named his cabinet picks, as markets weigh the potential inflationary impact of his policies. Investors also kept an eye on escalating tensions between Russia and Ukraine, after Russia launched an intercontinental ballistic missile in retaliation against Ukraine's strike using American and British missiles earlier this week. On the data front, a weekly report on jobless claims is due at 8.30 a.m. ET, while comments from Federal Reserve officials Beth Hammack, Austan Goolsbee and Vice Chair for Supervision Michael Barr are on tap. Money market participants are pricing in a higher chance of the Fed lowering interest rates by 25 basis points at its December meeting - about 55.7%, according to the CME Group's FedWatch. Alphabet dropped 0.5% after the Justice Department argued to a judge that Google must sell its Chrome browser and take other measures to end its monopoly on online search. Crypto stocks such as MARA Holdings jumped 9.3%, MicroStrategy soared 8.6% and Coinbase gained 2.9% as bitcoin prices soared to nearly $100,000 for the first time. Deere, Baidu and PDD Holdings are among companies set to report quarterly earnings before market open. Snowflake raised its annual product revenue forecast and said it has teamed up with AI firm Anthropic to build up its cloud services, sending the data analytics provider's shares up 20%. Palo Alto Networks lost 5.3% after announcing a two-for-one forward stock split after the cybersecurity firm topped quarterly revenue and profit expectations. (Reporting by Purvi Agarwal and Johann M Cherian in Bengaluru; Editing by Pooja Desai)

Futures trade cautiously in anticipation of Nvidia earnings

(Reuters) - U.S. stock index futures were little changed on Wednesday as investors awaited quarterly results from Nvidia, which are expected to be pivotal in sustaining the AI behemoth's record rally this year. Nvidia is scheduled to report results after the bell and its shares were down 0.1% in premarket trading after jumping nearly 5% in Tuesday's session. Options traders are primed for a nearly $300-billion swing in its market value after the results, with options implying an 8.5% swing for the shares in either direction. "Markets are preparing for today's Nvidia earnings release," said Achilleas Georgolopoulos, market analyst at XM. "There are strong expectations for another spectacular report, which means that a possible disappointment today could quickly shift the current fragile market sentiment to a negative stance." Nvidia, which has nearly tripled in value this year, accounted for about 20% of the S&P 500's returns over the past year, according to BofA Global Research. The market's reaction to its results is expected to be crucial in determining Wall Street's trajectory heading into the year-end. Meanwhile, Target rose 1.2% ahead of results due before the bell, which will also be scrutinized for clues on consumer spending patterns. Other megacaps were mixed. Microsoft was up 0.2%, while Tesla and Apple fell 0.5% and 0.3%, respectively. At 5:35 a.m. ET, Dow E-minis rose 60 points, or 0.14%, S&P 500 E-minis were up 3 points, or 0.05%, and Nasdaq 100 E-minis were down 4.25 points, or 0.02%. Nvidia's gains in Tuesday's session helped the benchmark index and the tech-heavy Nasdaq end higher despite concerns about the escalating conflict between Russia and Ukraine hitting risk assets in early trading. Some soothing of geopolitical worries also helped lift stock futures on the day, after Reuters reported Russian President Vladimir Putin was open to discussing a Ukraine ceasefire deal with Donald Trump. Cryptocurrency stocks ticked higher as bitcoin briefly jumped above $94,000, with MicroStrategy and MARA Holdings up 2.8% and 2.1%, respectively. Several Federal Reserve officials are scheduled to speak, with comments expected from Lisa Cook, Michelle Bowman and Susan Collins, while Vice Chair for Supervision Michael Barr will testify before the House Financial Services Committee on the day. Investors are also watching U.S. President-elect Trump's cabinet picks keenly for clues on future policy stances. Trump is expected to announce his pick for Treasury secretary soon. He said on Tuesday he would nominate Cantor Fitzgerald CEO Howard Lutnick to lead his trade and tariff strategy as head of the Commerce Department. (Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)

Why US Futures Are Lower Thursday - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), NVIDIA (NASDAQ:NVDA), SPDR S&P 500 (ARCA:SPY)

U.S. stocks could open on a negative note on Thursday after AI bellwether Nvidia Corp.'s NVDA guidance fell short of some expectations. Futures of all three major indices were down as investors processed the AI giant's earnings. Other chip makers like Qualcomm Inc. QCOM, Intel Corp. INTC, Broadcom Inc. AVGO, and Advanced Micro Devices Inc. AMD also experienced pressure in premarket trading. In premarket trading on Thursday, the SPDR S&P 500 ETF Trust SPY fell 0.25% to $589 and the Invesco QQQ ETF QQQ declined 0.34% to $501.46, according to Benzinga Pro data. Cues From Last Session: The Dow Jones snapped its two-session losing streak this week to close 100 points higher on Wednesday, while the S&P 500 eked a marginal gain to close in the green. The tech-heavy Nasdaq, however, fell ahead of the volatility due to Nvidia's earnings after the bell. Crude oil prices continued to rise amid growing tensions between Russia and Ukraine but remained under the $70 mark. Treasury yields eased slightly as investors waited for further economic data. On the economic data front, mortgage applications in the U.S. rose 1.7% from the previous week in the week ending Nov. 15, compared to a 0.5% gain in the prior period. Most sectors on the S&P 500 closed on a positive note, with healthcare, energy, and materials stocks recording the biggest gains on Wednesday. However, consumer discretionary and financial stocks bucked the overall market trend, closing the session lower. Insights From Analysts: Ryan Detrick, chief market strategist at Carson Group, maintained that despite the weakness in the markets currently, he remains optimistic about the potential of a continued bull run. "Weakness right around now is perfectly normal. The good news is I wouldn't give up on a late November rally." Despite the volatile movement in Nvidia and other chipmaker stocks, Wedbush analyst Dan Ives maintained optimism about the AI giant's performance. "The Godfather of AI Jensen and Nvidia delivered a massive beat and big things ahead for Blackwell," Ives said. Nvidia posted third-quarter revenue of $35.1 billion, up 94% year-on-year, beating the Street consensus of $33.12 billion, according to data from Benzinga Pro. This was the ninth straight quarter of Nvidia beating analyst estimates. Tech bull Ives thinks that this is the "fourth revolution" in technology, and it could help the Nasdaq surge to 25,000. See Also: How To Trade Futures Upcoming Economic Data Thursday's economic calendar includes the release of initial jobless claims data. Initial jobless claims data will be released at 8:30 a.m. ET. Philadelphia Fed manufacturing survey will be released at 8:30 a.m. ET. Cleveland Fed President Beth Hammack will speak at 8:45 a.m. ET. Existing home sales data and leading economic index will be released at 10 a.m. ET. Kansas City Fed President Jeff Schmid will speak at 1:10 p.m. ET. Fed Vice Chair for Supervision Michael Barr will speak at 4:40 p.m. ET. Stocks In Focus: Nvidia Corp. NVDA shares fell 2.6% in premarket trading on Thursday after the company posted a quarter-on-quarter decline in gross margins. Other chip stocks felt the pressure post-Nvidia earnings. Qualcomm Inc. QCOM fell nearly 1%, while Intel Corp. INTC was down 0.6%. Broadcom Inc. AVGO and Advanced Micro Devices Inc. AMD both fell 0.5% in premarket trading. MicroStrategy Inc. MSTR stock surged over 10% on Wednesday and rose by another 11% in premarket trading on Thursday after Bitcoin BTC/USD crossed the $95,000 mark. Robinhood Markets Inc. HOOD stock was also up over 3%. Snowflake Inc. SNOW shares rose over 21% in premarket trading after the company beat analyst expectations and revised its 2025 revenue outlook upwards. Palo Alto Networks Inc. PANW stock fell over 4% in premarket trading after the company's third-quarter results. Alphabet Inc. GOOG GOOGL stock was slightly down in premarket trading after the U.S. Department of Justice (DOJ) said the company needed to sell the Google Chrome browser to end search monopoly. Investors are awaiting earnings results from Deere & Company DE, BJ's Wholesale Club Holdings, Inc. BJ, and Intuit Inc. INTU today. Commodities, Bonds And Global Equity Markets: Crude oil futures surged in the early New York session, rising by 1.70% to hover around $69.92 per barrel. The 10-year Treasury note yield edged lower to 4.394%. Most of the major Asian markets ended in the red on Thursday, while European markets showed tentativeness in early trading. Read Next: Target Says Shoppers Wait For 'Deals' A Day After Rival Walmart Credits Market Gains To Wealthy Households Photo courtesy: Wikimedia Market News and Data brought to you by Benzinga APIs

Nvidia's results, Adani's legal woes, Starbucks - what's moving markets By Investing.com

Investing.com -- Wall Street is seen trading lower Friday, weighed by disappointment from Nvidia's guidance. Starbucks is potentially looking at options for its China business, while the chairman of the Adani Group has been indicted over bribery claims. Nvidia (NASDAQ:NVDA) stock retreated in premarket trading Thursday after the AI darling's projection of its slowest revenue growth in seven quarters, particularly as investors had been used to the world's most valuable company blowing past all estimates. Nvidia's fourth-quarter forecast indicated the company's revenue growth will slow to roughly 69.5% from 94% in the third-quarter. This raised questions over whether the artificial intelligence boom is waning. But Nvidia was at pains to point out that there was no shortage of companies eager to create new AI systems using its chips, but supply chain constraints would lead to demand for its chips exceeding supply for several quarters in fiscal 2026. "Expect stock to churn near-term as investors digest lack of 'sizzle' but we continue to like the stock on its 'substance'," said analysts at Bank of America (NYSE:BAC) Securities, in a note. Nvidia is in the middle of launching its powerful Blackwell family of AI chips, which will weigh on the company's gross margins initially but improve over time. "The key dynamic here is the transition to Blackwell - where demand was described as 'staggering'," said analysts at Morgan Stanley (NYSE:MS). "Blackwell constraints are likely to be a major factor for at least a year, but we continue to see a strong Blackwell cycle as a driver." US stock futures edged lower Thursday, weighed by disappointing guidance from tech giant Nvidia. By 03:50 ET (08:50 GMT), the Dow futures contract was down 60 points, or 0.1%, S&P 500 futures dropped 17 points, or 0.3%, and Nasdaq 100 futures fell by 82 points, or 0.4%. Nvidia, which recently overtook Apple (NASDAQ:AAPL) to become the world's most valuable listed company, issued a revenue forecast which indicated a slower pace of revenue growth than seen in prior quarters. It also flagged supply constraints, especially in its upcoming Blackwell line of next-generation AI chips. This relative weakness, given the high expectations, from such a highly-weighted company could set the tone for the markets for the rest of the week. There are jobless claims data later in the session for investors to digest, while several Federal Reserve officials are also set to speak in the coming days. Shares in the listed companies in India's Adani Group plunged Thursday after its billionaire chairman Gautam Adani was indicted in a New York federal court over his suspected role in a $265 million bribery scheme. The 62-year-old billionaire and the seven other defendants have been accused of paying substantial bribes to Indian government officials to secure solar energy contracts that could generate more than $2 billion in profits. This resulted in the shares in the conglomerate's listed companies tumbling between 10% and 20%, with Adani Enterprises (NS:ADEL) - the flagship listed unit of the conglomerate - dropping 10%. An Adani Group spokesperson said the allegations are "baseless and denied." These allegations herald a fresh round of regulatory trouble for Adani, and come nearly two years after a short seller report from Hindenburg Research had accused Adani of similar schemes. The report had sparked scrutiny from U.S. and Indian regulators against Adani, although India's securities regulator claimed to have found little wrongdoing. Shares of companies under the Adani Group lost more than a combined $100 billion after the Hindenburg report in early-2023, but they had since recouped most of their losses. Starbucks (NASDAQ:SBUX) is considering options for its China business, including a potential stake sale, as it attempts to revitalize sales under new CEO Brian Niccol, according to a report. The coffee chain has been in talks with advisers over how to grow its Chinese business, including potentially introducing a local partner, Bloomberg reported. China is Starbucks' second-largest market after the US, but the company has faced heightened competition in the country over the past few years from other foreign entrants, as well as local offerings. In addition to its China woes, the company has seen waning sales in the U.S., and turned to Niccol, previously with Mexican restaurant chain Chipotle Mexican Grill (NYSE:CMG), as its CEO earlier this year. Crude prices rose Thursday, buoyed by fears of supply disruptions stemming from worsening tensions in the Russia-Ukraine war, countering the impact from a bigger-than-expected increase in US inventories. By 03:50 ET, the US crude futures (WTI) climbed 1.3% to $69.64 a barrel, while the Brent contract rose 1.2% to $73.66 a barrel. Crude prices have advanced this week as the use of long-range US and UK weapons by Ukraine against Russia, something Moscow had warned for months would be seen as a major escalation. Still, overall gains were limited by concerns over slowing demand, especially as U.S. inventories grew more than expected, rising by 545,000 barrels to 430.3 million barrels in the week ended Nov. 15. More worrying for oil markets was a nearly 2.1 mb build in gasoline inventories, which spurred some concerns that US fuel demand was cooling as the winter season approached.

Stock Market Today: Stocks edge higher with Nvidia earnings in focus

Check back for updates throughout the trading day U.S. equity futures edged higher in early Wednesday trading, while Treasury yields and the dollar resumed their recent climbs, as investors looked to tempering risks in the Russia-Ukraine conflict while prepping for a key earnings release from the world's most-valuable company. Stocks ended higher on Tuesday following an afternoon rally that both the S&P 500 and the Nasdaq into positive territory as Russia played-down changes to its nuclear doctrine following strikes by U.S.-made missiles from Ukraine. The unwinding of safe-haven trades, which had pushed U.S. Treasury bond yields sharply lower, was also evident in overnight trading, where bitcoin prices hit a fresh all-time high and traded north of $94,000 each and gold price fell by around 0.3% per ounce amid the improving sentiment. Treasury yields were back on the move heading into the New York trading session, with benchmark 10-year notes pegged at 4.418% and 2-year paper changing hands at 4.289%. On Wall Street, focus will likely shift to a busy corporate earnings slate, with updates from retailer Target TGT before the bell and Nvidia NVDA after the close of trading. Nvidia, which represents around 7.5% of the weighting of the S&P 500 and around 9% of the Nasdaq, is expected to post a huge 83% surge in overall revenues, which are forecast at $33.1 billion, and guide investors to double-digit gains on the back of Blackwell GPU demand over the tech giant's fiscal fourth quarter. Related: Nvidia earnings on deck as AI kingpin tightens grip against rivals "Nvidia heads into earnings with elevated expectations. The stock is up 172% {this year} and 5% over the past month, with anticipation of a beat and raise tempered by potential revenue deceleration as the market awaits the next-gen Blackwell product," said Hightower's chief investment officer Stephanie Link. "Despite the stock trading at 37x, Nvidia remains the leader in AI, with accelerated bookings from cloud service providers and significant hyperscaler spend growth (17% Q/Q)," she added. "While I see early innings for AI, I'm more of a buyer on weakness than chasing here." With that update in focus, and options traders braced for price swings of around 9%, in either direction, for a $3.6 trillion stock after it reports, markets are set for a muted open to start the trading day. Futures contracts tied to the S&P 500 suggest a modest 10 point opening bell gain while those linked to the Dow Jones Industrial Average are priced for a 35 point bump. The tech-focused Nasdaq, meanwhile is called 13 points higher with Nvidia marked 0.25% in the green and changing hands at $147.35 each. More Wall Street Analysts: In overseas markets, a faster-than-expected reading for U.K. inflation put a cap on bets for a December rate cut from the Bank of England, and held down gains for the FTSE 100, which was marked 0.16% higher in mid-day London trading. Overnight in Asia, Japan's Nikkei 225 finished 0.16% lower as the yen remained elevated against the U.S. dollar and tech stocks slipped ahead of the Nvidia earnings update. Related: Veteran fund manager sees world of pain coming for stocks

US stock futures flat, Nvidia dips as guidance underwhelms By Investing.com

Investing.com-- U.S. stock index futures moved little in evening deals on Wednesday as markets digested a mixed showing from artificial intelligence major Nvidia, which clocked strong earnings but presented an outlook that just scraped past estimates. Futures moved little after a muted session on Wall Street, as anticipation of NVIDIA Corporation's (NASDAQ:NVDA) earnings deterred any big bets. Sentiment also remained strained amid increased tensions over Russia and Ukraine, and as earnings from retail giant Target Corporation (NYSE:TGT) fell well short of expectations. S&P 500 Futures steadied at 5,939.0 points, while Nasdaq 100 Futures were flat at 20,751.25 points by 18:35 ET (23:35 GMT). Dow Jones Futures steadied at 43,551.0 points. Nvidia shares fell more than 1% in aftermarket trade to around $144.0, trimming some losses after falling as much as 2% just after its earnings. Earnings per share rose to $0.81 on revenue of $35.1 billion, higher than expectations of $0.75 in EPS and $33.09 billion in revenue. But Nvidia forecast fourth quarter revenue of $37.5 billion, plus or minus 2%. The guidance was just above estimates of $37.09 billion, underwhelming some traders hoping for a much bigger beat, especially given the stellar run-up in Nvidia's valuation this year. The forecast also indicated a slower pace of revenue growth than seen in prior quarters. Nvidia, which recently overtook Apple Inc (NASDAQ:AAPL) to become the world's most valuable listed company, flagged supply constraints, especially in its upcoming Blackwell line of next-generation AI chips. But the firm said demand for its advanced AI chips remained robust. Other major chipmaking stocks were mostly muted in evening deals on Wednesday, as investors digested the mixed outlook from Nvidia, which is considered as a bellwether for AI demand. TSMC (NYSE:TSM) fell 0.2%, while Broadcom Inc (NASDAQ:AVGO) and Nvidia rival AMD (NASDAQ:AMD) both rose slightly. Wall Street indexes marked a muted close on Wednesday amid caution before Nvidia, while investors were also rattled by a nearly 22% slide in Target after the retailer missed expectations for its September quarter earnings. Target steadied in evening trade, although its earnings also raised some questions over weakening retail spending. Several Federal Reserve officials are also set to speak in the coming days.

Stock futures are little changed as Wall Street braces for Nvidia's quarterly results: Live updates

Traders work on the New York Stock Exchange (NYSE) floor on November 12, 2024 in New York City. Stock futures hovered near the flatline on Tuesday evening, as investors looked toward a key earnings report from tech giant Nvidia. Investors are looking for more than just third-quarter earnings beats from Nvidia on Wednesday afternoon. They want details on demand for Nvidia's Blackwell AI chips, which CEO Jensen Huang last month characterized as "insane." How the semiconductor giant fares - given its market capitalization of $3.6 trillion - could set the tone for the S&P 500 and the Nasdaq Composite for the rest of the week. "Recently I've been sort of inclined to look for the broadening trade and fade some of these big names," RBC Capital Markets head of U.S. equity strategy Lori Calvasina said Tuesday on CNBC's "Fast Money." "What I am generally seeing in my data is that even though the value trade fights back, the megacap growth names keep coming back and showing their earnings dominance." On the economic front, investors will also look toward commentary from Federal Reserve Governors Lisa Cook and Michelle Bowman, as well as Boston Fed President Susan Collins.

Wall Street: the trend turns red ahead of Nvidia

Expected to be trading at around breakeven, the New York Stock Exchange ended the day lower on Wednesday, with investors adopting a cautious stance as they await Nvidia's quarterly results, due after the close. In late morning trading, the Dow Jones index lost 0.2% to 43,206.5 points, the S&P 500 fell 0.6% to 5,881.4 points, while the Nasdaq Composite dropped 0.8% to 18,828.6 points. Traders seem to want to limit their risk-taking, for fear that the AI chip giant's release may hold some unpleasant surprises in store for them. Investors will be keeping a close eye on the Californian group's results to see whether the current high valuation of the 'Magnificent Seven' is justified following their recent surge on the stock market. According to calculations by Goldman Sachs strategists, their price-earnings ratio (P/E) currently stands at 30x, compared with 19x for the rest of the S&P 500. The problem is that, with such a high valuation, the slightest sign of weakness would rekindle fears about the sector's growth and risk being severely punished. At its last quarterly publication, Nvidia failed to surpass the most optimistic analyst expectations, resulting in a 6% fall in its share price the following day. Although the macroeconomic calendar is light today, this has not prevented the bond markets from retreating, with the yield on ten-year US government bonds rising from 4.38% to 4.41%. The dollar, on the other hand, continues to rise, pushing the euro back down to around 1.0510. On the oil market, a barrel of Texas light crude (WTI) climbed 0.3% to $69.6 in the wake of last week's announcement of near-stability in crude oil inventories. Copyright (c) 2024 CercleFinance.com. All rights reserved.

Wall Street: all eyes on Nvidia's results

Wall Street is set to open slightly higher on Wednesday morning in the absence of any major macroeconomic indicators, with investors keeping their eyes riveted on Nvidia, whose results will be released after the close. Half an hour before the opening, futures contracts on the main New York indices are up by 0.1% to 0.2%, pointing to a stable or even modestly rising start to the session. Nvidia's results will be closely watched by investors to see whether the current high valuation of the 'Magnificent Seven' is justified following their recent surge on the stock market. Now the world's leading company in terms of valuation, Nvidia has a market capitalization of over 3.600 billion, i.e. more than the combined weight of the CAC 40 and DAX indices. Investors are hoping that the AI giant's accounts will allow them to forget the recent bout of weakness due to rising geopolitical risk and questions about the implications of Donald Trump coming to power. As a sign of these concerns, the S&P index of technology stocks - the market's usual powerhouse - has been lagging of late, and has hardly changed (+0.3%) in the last month. The release of the Californian chipmaker's results could give the indexes fresh impetus, or even enable them to set new all-time highs. The Nasdaq is only 2% off its all-time high, above the 6,000-point mark. However, it remains to be seen what the market's verdict will be. At the time of its last quarterly publication, Nvidia had failed to surpass the most optimistic expectations, resulting in a 6% fall in its share price the following day. The stock has nevertheless gained around 20% since then. From the point of view of Wedbush analysts, today's meeting could be the first step towards achieving a market capitalization of over $4,000 billion next year. All that buyers want to hear is that corporate demand for AI is holding up, which should enable technology stocks to advance between now and the end of the year and into 2025", says Dan Yves, the brokerage firm's star analyst. The problem is that, with such a high valuation, the slightest sign of weakness would rekindle fears about the sector's growth and risk being severely punished. In its latest report on financial stability, the ECB warns against highly concentrated equity markets, their possible overvaluation and the associated risk of volatility, warning in particular against the 'shocks' likely to affect the US 'tech' sector. Copyright (c) 2024 CercleFinance.com. All rights reserved.

Asia stocks dip as Nvidia brings little cheer; India in focus amid Adani scandal By Investing.com

Investing.com-- Most Asian stocks fell on Thursday as earnings from market major Nvidia provided middling cues, while Indian markets were squarely in focus after the U.S. accused conglomerate Adani of corruption. Regional markets took few cues from a muted overnight session on Wall Street, as caution over NVIDIA Corporation (NASDAQ:NVDA) kept investors to the sidelines. But U.S. stock index futures sank in Asian trade, tracking an over 1% aftermarket drop in Nvidia. Heightened tensions over Russia and Ukraine also kept overall risk appetite limited. Technology-heavy Asian bourses mostly fell on Thursday, although stocks with direct exposure to Nvidia were a mixed bag as its results offered differing cues. The TOPIX index shed 0.3%. The world's most valuable listed company clocked stronger than expected earnings in the September quarter. But its guidance for the current quarter just barely scraped past expectations, pointing to slowing revenue growth and sparking some fears that artificial intelligence demand had potentially peaked. Nvidia is considered as a bellwether for AI demand, with its underwhelming guidance sparking some concerns that tech valuations had overestimated just how much of an earnings driver the industry will remain. Weakness in Asian tech spilled over into other sectors. Hong Kong's Hang Seng index shed 0.2%, with shares of Semiconductor Manufacturing International Corp (HK:0981), China's biggest chipmaker, trading sideways. China's Shanghai Shenzhen CSI 300 and Shanghai Composite indexes fell around 0.3% each, while Australia's ASX 200 fell 0.1%. Futures for India's Nifty 50 index pointed to a weak open on Thursday, with shares of firms under Adani expected to tumble after a U.S. court accused Chairman Gautam Adani of an over $250 million bribery scheme. Shares of listed companies under the conglomerate- most notably Adani Enterprises Ltd (NS:ADEL) and Adani Ports and Special Economic Zone Ltd (NS:APSE)- are set to tumble when markets open on Thursday, given the U.S. allegations echo those leveled by short seller Hindenburg Research in early-2023. Adani shares had lost more than $100 billion in a matter of days after the Hindenburg report, although they have since recouped these losses. Multiple media reports said Adani Green Energy Ltd (NS:ADNA) had also scrapped a planned bond issuance in the wake of the allegations. Weakness in Adani is expected to drive down broader Indian stocks, which were already nursing steep losses over the past month as foreign investors withdrew from the country. The Nifty was in correction territory after sinking more than 10% from its September record highs, and hit a five-month low on Wednesday.