Nvidia's Q3 Results Exceed Expectations, Highlighting AI's Growing Influence on Markets

CAC40: Nvidia a non-event, W-Street trendless

The Paris stock exchange cut its losses sharply after falling 0.9% this morning, to around 7.131 (Russia hit the Ukrainian town of Dnipro with hypersonic missiles, not equipped with military or nuclear warheads - a sort of "blank" test - which demonstrated the impossibility of intercepting these "munitions"). But since each protagonist in the Russian-Ukrainian war seems intent on remaining at the intimidation stage, the markets seem reassured. The CAC40 is now down just 0.1% at 7,190, as is the Euro-Stoxx50, which is once again trying to save the 4,730 support level. Wall Street has just reopened without direction, or with a symbolic decline in the "technos" (-0.1%), but the S&P500 is up +0.1% and the Dow Jones +0.2%. The Nasdaq-100 is supported by Nvidia (+0.6%), which in the end lost nothing (-1.5% to -2.5% after its results at 10.15pm). The American AI chip giant's quarterly results exceeded expectations, driven by strong demand for its 'Hopper' architecture, soon to be succeeded by the new 'Blackwell' platform. Jensen Huang, founder and CEO of the Californian group, was quoted in the processor manufacturer's press release as saying: "The AI era is moving full steam ahead". Sales for the three months to the end of October jumped 94% year-on-year to $35.1 billion, with earnings per share (EPS) up 103% to $0.81. This compares with analysts' forecasts for the first half of 2009. By way of comparison, analysts were expecting average EPS of $0.70. The stock has gained almost 196.5% this year, with a market capitalization of $3,600 billion. In a note released earlier this week, Goldman Sachs strategists warned that valuations for the 'Magnificent Seven' were beginning to approach fair value, leading the investment bank to anticipate an attenuation of their outperformance relative to the rest of the market. What's more, fourth-quarter sales are forecast at $37.5 billion, 'just' above the consensus figure of $37.1 billion", adds Jim Reid, market analyst at Deutsche Bank. In addition to Nvidia's results, investors will have to digest a whole series of economic indicators in the session opening today. Manufacturing activity in the Philadelphia region contracted in November, according to the local Fed survey, with the Philly Fed diffusion index of general current activity falling from +10.3 in October to -5.5 for the current month. Nearly 18% of companies reported an increase in general activity this month (versus 24% last month), while 23% reported a decrease (versus 14%) and 58% reported no change. The new orders and shipments indexes also fell, but remained positive, losing five points to +8.9 and three points to +4.5 respectively, while the employment index returned to positive territory, at +8.6. The Labor Department announced a drop of -6.000 fewer new US jobless claims (to 213,000) at the end of the week to November 11. The four-week moving average - more representative of the underlying trend - came in at 217,750, down 3,750 on the previous week. and the Conference Board's leading indicators. It remains to be seen whether housing sales, which reached their lowest level since 2010 in September, will continue to be held back by high property prices and borrowing rates that are only gradually coming down. In Europe, the business climate in France darkened again in November, according to Insee, whose synthetic indicator, calculated from business leaders' responses, dropped one point to 96. In other French company news, Bouygues Construction reports that its Americaribe subsidiary has been chosen by US real estate developer Aimco to build the 34th Street Edgewater upscale waterfront residence in Miami's Edgewater district. Nexans announced Thursday that it would become the first cable manufacturer to integrate its products within building information modeling (BIM) technology through a partnership with the global BIMobject platform. Copyright (c) 2024 CercleFinance.com. All rights reserved.

CAC40: further decline after Nvidia results

The Paris stock market lost 0.8% this morning, around 7140 points, penalized once again by the automotive sector with -1.9% for Stellantis and -1.5% for Renault. Last night, investor attention was focused on Nvidia, the American AI chip giant, whose quarterly results exceeded expectations, driven by strong demand for its 'Hopper' architecture, soon to be succeeded by the new 'Blackwell' platform. Jensen Huang, founder and CEO of the Californian group, was quoted in the processor manufacturer's press release as saying: "The AI era is moving full steam ahead". Sales for the three months to the end of October jumped 94% year-on-year to $35.1 billion, with earnings per share (EPS) up 103% to $0.81. This compares with analysts' forecasts for the same period last year. By way of comparison, analysts were expecting average EPS of $0.70. The stock was losing 2.5% in after-hours trading on the New York Stock Exchange, the victim of profit-taking after a gain of almost 195% this year. In a note issued earlier this week, Goldman Sachs strategists warned that the valuations of the 'Magnificent Seven' were beginning to approach their fair value, leading the investment bank to anticipate an attenuation of their outperformance relative to the rest of the market. In addition, fourth-quarter sales were forecast at $37.5 billion, 'just' above the consensus figure of $37.1 billion", adds Jim Reid, market analyst at Deutsche Bank. In addition to Nvidia's results, investors will have to digest a whole series of economic indicators in the session starting today. In the US, unemployment claims, the Philadelphia Fed index and Conference Board leading indicators are on the menu. Home sales, which hit their lowest level since 2010 in September, are likely to remain held back by high property prices and borrowing rates that are only gradually coming down. Meanwhile, on the statistics front, the business climate in France darkened again in November, according to Insee, whose synthetic indicator, calculated from business leaders' responses, dropped one point to 96. In other French company news, Bouygues Construction reports that its Americaribe subsidiary has been chosen by American real estate developer Aimco to build the 34th Street Edgewater upscale waterfront residence in Miami's Edgewater district. Nexans announced Thursday that it would become the first cable manufacturer to integrate its products within building information modeling (BIM) technology through a partnership with the global BIMobject platform. Copyright (c) 2024 CercleFinance.com. All rights reserved.

CAC40: up 0.2%, despite contrasting W-Street and interest rates

The Paris stock market is back in the green (+0.2%), thus "rescuing" the 7,200... a small feat after a 0.9% decline this morning, to around 7,131. Indeed, the indices had fallen this morning as Russia struck the Ukrainian town of Dnipro with hypersonic missiles, not equipped with military or nuclear warheads - a sort of "dry run" test - which demonstrated the impossibility of intercepting these "munitions". But since each protagonist in the Russian-Ukrainian war seems intent on remaining at the intimidation stage, the markets seem reassured. Wall Street remains seemingly directionless, but the S&P500 grabs +0.2%, the Dow Jones +0.8% and the Nasdaq-100 -0.8%, while Nvidia, which set a new record at the opening ($152.9 or +3%), turns downwards (-2% to -2.5% after Wednesday's results). The American AI chip giant's quarterly results exceeded expectations, driven by strong demand for its 'Hopper' architecture, soon to be succeeded by the new 'Blackwell' platform. Jensen Huang, founder and CEO of the Californian group, was quoted in the processor manufacturer's press release as saying: "The AI era is moving full steam ahead". Sales for the three months to the end of October jumped 94% year-on-year to $35.1 billion, with earnings per share (EPS) up 103% to $0.81. This compares with analysts' forecasts for the first half of 2009. By way of comparison, analysts were expecting average EPS of $0.70. The stock has gained almost 196.5% this year, with a market capitalization of $3,600 billion. In a note released earlier this week, Goldman Sachs strategists warned that valuations for the 'Magnificent Seven' were beginning to approach fair value, leading the investment bank to anticipate an attenuation of their outperformance relative to the rest of the market. What's more, fourth-quarter sales are forecast at $37.5 billion, 'just' above the consensus figure of $37.1 billion", adds Jim Reid, market analyst at Deutsche Bank. In addition to Nvidia's results, investors will have to digest a whole series of economic indicators in the session opening today. Manufacturing activity in the Philadelphia region contracted in November, according to the local Fed survey, with the Philly Fed diffusion index of general current activity falling from +10.3 in October to -5.5 for the current month. Nearly 18% of companies reported an increase in general activity this month (versus 24% last month), while 23% reported a decrease (versus 14%) and 58% reported no change. The new orders and shipments indexes also fell, but remained positive, losing five points to +8.9 and three points to +4.5 respectively, while the employment index returned to positive territory, at +8.6. The Labor Department announced a drop of -6.000 fewer new US jobless claims (to 213,000) at the end of the week to November 11. The four-week moving average - more representative of the underlying trend - came in at 217,750, down 3,750 on the previous week. and the Conference Board's leading indicators. Sales of existing homes in the United States rose by 3.4% in October 2024 compared with the previous month, to a seasonally adjusted annual rate of 3.96 million, according to the National Association of Realtors (NAR). The latter also points out that sales rose by 2.9% compared to the same month last year, the first year-on-year increase in more than three years (+1.8% in July 2021). The median sales price of existing homes rose by 4% compared to October 2023 to reach $407.200 (a record!), and the inventory of unsold existing homes stood at 1.37 million, representing 4.2 months' worth of inventory at the current rate. Finally, the index of leading indicators, which is supposed to foreshadow the evolution of economic activity in the United States, fell slightly more than expected in October (-0.4% to 99.5), announced the Conference Board on Thursday, which sees this as the effect of the recent hurricanes. The sluggishness of industrial orders was the main contributor to the indicator's decline, says the ConfBoard, although the fall in the number of hours worked in the manufacturing sector, the rise in unemployment registrations and the decline in building permits also weighed. Over and above the temporary impact of the recent hurricanes, the trade body believes that the indicator still points to 'difficulties ahead for economic activity'. US T-Bonds are reversing the trend and are down slightly (+1Pt to 4.150%), while in Europe, our OATs are stagnating at 3.095%, in contrast to the upturn in Bunds (-3Pts) to 2.313%. In Europe, the business climate in France darkened again in November, according to Insee, whose synthetic indicator, calculated from business leaders' responses, dropped one point to 96. In other French company news, Bouygues Construction reports that its Americaribe subsidiary has been chosen by US real estate developer Aimco to build the 34th Street Edgewater upscale waterfront residence in Miami's Edgewater district. Nexans announced Thursday that it would become the first cable manufacturer to integrate its products within building information modeling (BIM) technology through a partnership with the global BIMobject platform. Copyright (c) 2024 CercleFinance.com. All rights reserved.

CAC40: down slightly, quiet week ahead

The Paris stock market lost 0.1% this morning, around 7,260 points, penalized by declines in Vivendi (-1%) and St-Gobain (-1%) at the start of what promises to be a quiet week, with few major indicators on the agenda. The themes that continue to preoccupy the markets are now well known: on the one hand, the effect of Trump's election, weak demand from China and disparate corporate comments on the third quarter", point out Edmond de Rothschild's teams. "On this last point, more than half the companies in the STOXX 600 have published their results, and only a few sectors have surprised positively on average", stresses the private bank. Barclays' strategists point out that European companies reported average earnings per share (EPS) growth of 3% in the third quarter, compared with 7% for their US counterparts. The 'Trump Trade' - which carried Wall Street in the wake of the November 5 presidential election - nevertheless seems to have run out of steam last week. After surging by 5% to 6% in the sessions following the election, the major New York indices gave up between 1% and 3% last week, worried about the repercussions of the next US president's policies. Investors fear that the pro-business approach advocated by the real estate magnate will lead to a resurgence in inflation, which could cause the Fed to slow down its rate cuts. The economic agenda promises to be light this week, with the main event set for Friday with the publication of the European flash PMI indices. These data will enable us to gauge the reaction of European companies to Donald Trump's recent victory and their feelings regarding the possible introduction of tariffs likely to penalize their business. Against this backdrop, all eyes should be on Wednesday evening's results from Nvidia, now the world's largest listed company ahead of Apple. The AI chipmaker's performance could help revive a technology segment that has been losing momentum of late (-1.6% for the S&P sector index over the past month). Analysts covering the stock are expecting a publication comparable to its latest announcements, i.e. better-than-expected accounts accompanied by an increase in targets, especially as the semiconductor designer is now starting to capitalize on the recent launch of its new architecture, dubbed 'Blackwell'. In other French company news, Orange has announced that it is appealing the seizure of 312 million euros on October 7 by the French National Financial Prosecutor's Office (Parquet national financier - PNF) in connection with a dispute over VAT rates applied to certain promotional offers between 2017 and 2019. Vivendi reports that Canal+ is holding a Capital Markets Day on Monday, at which it will present its strategy and ambitions in the run-up to its admission to the London Stock Exchange, scheduled for December 16. Finally, La Française des Jeux (FDJ) reports that it has successfully placed its inaugural bond issue for 1.5 billion euros, in three tranches of 500 million each maturing in six, nine and 12 years, and with annual coupons of 3.000%, 3.375% and 3.625%. Copyright (c) 2024 CercleFinance.com. All rights reserved.

CAC 40: a quiet week, except for Nvidia

The Paris Bourse is set to open without much change on Monday, at the start of what promises to be a quiet week, with few major indicators on the agenda. The CAC 40 future contract - which has now switched to the December timeframe - posted a modest gain of 13 points to 7298.50 around 8.15, heralding a stable or even slightly positive start to the session. Over the past week, the Paris market had fallen by around 1%, bringing its year-to-date decline to around 1%. This heaviness affected all European markets, with the Euro STOXX 50 losing 1.2%, for an annual gain now down to around 6%. Analysts point out that the underperformance of the Old Continent's equity markets is now at historic levels compared with Wall Street, which is chaining record after record. The themes that continue to preoccupy the markets are now well known: on the one hand, the effect of Trump's election, weak demand from China and disparate corporate comments on the third quarter", Edmond de Rothschild's teams point out. On this last point, more than half the companies in the STOXX 600 have published their results, and only a few sectors surprised positively on average", the private bank points out. Barclays' strategists point out that European companies reported an average of 3% growth in earnings per share (EPS) in the third quarter, compared with 7% for their US counterparts. The 'Trump Trade' - which carried Wall Street in the wake of the November 5 presidential election - nevertheless seems to have run out of steam last week. After surging by 5% to 6% in the sessions following the election, the major New York indices gave up between 1% and 3% last week, worried about the repercussions of the next US president's policies. Investors fear that the pro-business approach advocated by the real estate magnate will lead to a resurgence in inflation, which could cause the Fed to slow down its rate cuts. The economic agenda promises to be light this week, with the main event set for Friday with the publication of the European flash PMI indices. These data will enable us to gauge the reaction of European companies to Donald Trump's recent victory and their feelings regarding the possible introduction of tariffs likely to penalize their business. Against this backdrop, all eyes should be on Wednesday evening's results from Nvidia, now the world's largest listed company ahead of Apple. The AI chipmaker's performance could help revive a technology segment that has been losing momentum of late (-1.6% for the S&P sector index over the past month). Analysts covering the stock are expecting a publication comparable to its latest announcements, i.e. better-than-expected accounts accompanied by an increase in targets, especially as the semiconductor designer is now starting to benefit from the recent launch of its new architecture, dubbed 'Blackwell'. Copyright (c) 2024 CercleFinance.com. All rights reserved.