Stocks higher with Nvidia countdown underway: end of markets

(Bloomberg) — Global stocks rose ahead of a headline earnings release from Nvidia Corp., the $3 trillion stock at the forefront of the global artificial intelligence frenzy.

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Viewed as a barometer for AI spending across much of the tech industry, Nvidia is expected to project revenue growth of more than 70% for the current quarter. Any disappointment is sure to hit markets given the company’s rise in US indices.

Shares are up about 160 percent this year, far outpacing the Nasdaq 100’s 16.4 percent gain, with the options market moving nearly 10 percent in either direction the day after the results.

Nasdaq and S&P 500 futures traded about 0.1 percent higher, while Europe’s Stoxx 600 rose 0.3 percent.

“Nvidia’s result has become very much like a macro event, in some ways as big as the wages release and CPI in terms of market impact,” said Justin Onuekwusi, chief investment officer at Wealth Manager St James Place. “There is a lot of money, a lot of leverage in these consensus names, and it will only take a slight disappointment to cause significant volatility in the markets.”

Nvidia’s report and earnings guidance are seen as crucial at a time when markets are grappling with the possibility of a US recession and whether the Federal Reserve can cut interest rates quickly enough to create a soft landing. Money markets are currently pricing in rate cuts of about 100 basis points this year starting in September.

While the dollar rose about 0.2 percent against a basket of currencies on Wednesday, it is still on track for its steepest monthly decline this year, undercut by rate cut bets. US Treasury yields were little changed.

The yen fell against the dollar following comments from Bank of Japan Deputy Governor Ryozo Himino, who said that while the BOJ will raise interest rates as long as inflation moves in line with the bank’s view, it must monitor developments with “the utmost vigilance”.

Among individual shareholders, Nordstrom Inc. rose 6 percent in premarket trading in the U.S. after the department store chain issued a stronger-than-expected adjusted earnings-per-share outlook. Shares of Super Micro Computer Inc. fell after shares fell on Tuesday amid a Hindenburg Research announcement that it was short the server equipment maker.

In Europe, GSK Plc won after the Delaware Supreme Court decided to review a lower state court decision related to litigation over the company’s heartburn drug Zantac.

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Bitcoin fell below the $60,000 level as part of a broad pullback in the crypto market that included a sharp drop in the second largest token Ether. In commodity markets, gold retreated after a three-day advance that brought it close to an all-time high.

Key events this week:

• Nvidia earnings on Wednesday

• The Fed’s Raphael Bostic and Christopher Waller speak on Wednesday

• Eurozone consumer confidence on Thursday

• US GDP, Initial Jobless Claims, Thursday

• The Fed’s Raphael Bostic speaks on Thursday

• Japan Unemployment, CPI Tokyo, Industrial Production, Retail Sales, Friday

• Euro zone CPI, unemployment, Friday

• US personal income, spending, PCE; consumer sentiment on Friday

Some of the main movements in the markets:

Stocks

• The Stoxx Europe 600 was up 0.3% as of 9:59 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures rose 0.1%

• Futures on the Dow Jones Industrial Average were little changed

• MSCI Asia Pacific index rose 0.2%

• The MSCI Emerging Markets index was little changed

Coins

• Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.4% to $1.1141

• The Japanese yen fell 0.3 percent to 144.35 per dollar

• The offshore yuan was little changed at 7.1265 per dollar

• Sterling fell 0.2% to $1.3230

Cryptocurrencies

• Bitcoin fell 4.2% to $59,249.35

• Ether fell 4.5% to $2,464.14

BONDS

• The 10-year Treasury yield was little changed at 3.83%

• Germany’s 10-year yield fell three basis points to 2.26%

• Britain’s 10-year yield was little changed at 3.99%

commodities

• Brent crude fell 0.8 percent to $78.92 a barrel

• Spot gold was down 0.7% at $2,508.17 an ounce

This story was produced with the help of Bloomberg Automation.

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