Nvidia Countdown Keeps Stocks in Narrow Ranges: Markets Wrap

By Investor Empires On Aug 28, 2024

(Bloomberg) — Markets are eagerly awaiting Nvidia Corp.’s results, with U.S. stock futures little changed and shares trading in tight ranges from Asia to Europe.

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The world’s most influential stock is expected to set the tone for risk assets when it reports results after the U.S. market closes. The $3.2 trillion chipmaker’s results and forecasts will also serve as a barometer for AI spending across much of the tech industry. Analysts, on average, expect Nvidia to see revenue growth of more than 70% for the current quarter.

Any disappointment is sure to rattle markets, given Nvidia’s heavy weighting in U.S. indexes. Investors are bracing for big swings in the company’s shares, with options markets pointing to a move of about 10% in either direction the day after the results. The stock is up about 160% this year and 1,000% from its October 2022 bear market low.

“Nvidia’s results will be seen as a defining moment for global markets, given the extreme optimism that has been priced in around AI stocks over the past year,” said John Rong-Yip, market strategist at IG Asia Pte.

The Stoxx Europe 600 index was slightly higher, while Asian stocks were mostly weak, although Chinese shares fell amid weak corporate earnings. U.S. Treasuries were steady, and the dollar index rose.

The yen extended losses to 0.4% against the dollar after comments from Bank of Japan Deputy Governor Ryozo Himino. Himino said the BOJ would raise interest rates as long as inflation was moving in line with the bank’s view, and that it should monitor developments “with the utmost vigilance.”

Bitcoin fell below $60,000 early Wednesday as part of a broader cryptocurrency market pullback that included a sharp decline in the second-largest token, ether.

Oil prices steadied after falling in the previous session, ending a three-day rally. Gold retreated after a three-day rally that took it close to an all-time high.

Main events this week:

Nvidia Earnings, Wednesday
Fed’s Rafael Pusic and Christopher Waller speak Wednesday
Eurozone Consumer Confidence, Thursday
US GDP, Initial Jobless Claims, Thursday
Fed’s Raphael Boucek speaks Thursday
Japan Unemployment, Tokyo CPI, Industrial Production, Retail Sales, Friday
Eurozone CPI and Unemployment, Friday
US Personal Income, Spending, CPI; Consumer Sentiment, Friday

Some key movements in the markets:

Stocks

The Stoxx Europe 600 index was up 0.2% by 8:04 a.m. London time.
S&P 500 futures were little changed.
Nasdaq 100 futures were little changed.
Dow Jones Industrial Average futures were little changed.
MSCI Asia Pacific Index rose 0.1%
The MSCI Emerging Markets Index saw little change.

Currencies

The Bloomberg Dollar Index rose 0.2%.
The euro fell 0.3% to $1.1153.
The Japanese yen fell 0.4% to 144.51 yen per dollar.
The offshore yuan fell 0.2% to 7.1331 against the dollar.
The pound fell 0.2% to $1.3232.

Cryptocurrencies

Bitcoin fell 4.2% to $59,226.28
Ether price fell 4.5% to $2,464.1

Bonds

The yield on the 10-year US Treasury note was little changed at 3.83%.
The yield on the 10-year German bond fell one basis point to 2.27%.
The yield on the 10-year UK bond was little changed at 3.99%.

Goods

Brent crude rose 0.2% to $79.68 a barrel.
Spot gold fell 0.6 percent to $2,509.79 an ounce.

This story was produced with the help of Bloomberg Automation.

–With the help of Abhishek Vishnoi.