In the US stock market on the 22nd, the S&P 500 stock index fell. The day before was led by big tech stocks, but the buying didn’t last this day. Investors are bracing for Nvidia’s results as market frenzy related to artificial intelligence (AI) is put to the test.
S&P 500 Stock Index 4387.55-12.22-0.28% Dow Jones Industrial Average 34288.83-174.86-0.51% Nasdaq Composite Index 13505.878.280.06%
Bank stocks are cheap after S&P Global Ratings downgraded mid-sized bank holding companies. Department store Macy’s fell 14%. There are concerns about the health of household finances as credit card delinquency increases. Nvidia fell 2.8%. There was also a scene where the price was renewed at one time since the listing. The company’s results, due on Thursday, are expected to set the tone for the market, along with Federal Reserve Chairman Jerome Powell’s speech on Thursday.
The options market expects a price move of about 10% after Nvidia’s earnings release. With Nvidia’s weight in the S&P 500 at more than 3%, volatility in its stock price could have far-reaching implications. Of the 10 largest S&P 500 stocks, Nvidia is the only one whose call option is priced above its put option, according to data from Nations Indexes.
“The expectations are extremely high,” said Matt Maley, chief market strategist at Miller Tabak. “That doesn’t mean the results won’t give tech stocks another boost, but the higher the expectations, the harder it will be to beat them. “Nvidia will have to deliver some spectacular financial results and guidance to finish soon.”
Analysts said the company’s May-July second-quarter results could beat its forecasts three months ago. The company’s forecasts greatly exceeded market expectations at the time, so the stock price rose and the market capitalization exceeded 1 trillion dollars (about 146 trillion yen). The only thing that could slow the growth of semiconductor giant Nvidia is whether it can get enough materials to meet the insatiable demand for AI data center equipment.
Nvidia stock has more than tripled since the beginning of the year, making it the top performer among S&P 500 stocks. The S&P 500 is up 15% year-to-date and the Philadelphia Semiconductor Index is up 40%.
Philadelphia Semiconductor Index and NVIDIA Stock
Source: Bloomberg
Tom Essay, founder of the newsletter The Sevens Report, said the sell-off in recent weeks was largely due to sharp rises in Treasury yields, adding that investors were looking for “higher, longer-term stocks.” “As the Fed has begun to accept policy rates, it has “postponed” the timing of its envisioned rate cuts, he said.
“It’s not so much how high interest rates are that matters, but how long they stay,” Essay said. “If Powell suggests ‘higher, longer’ on the 25th, stock markets will need to brace for higher volatility.”
US Treasuries
The US Treasury market was not particularly active, and the 10-year Treasury yield fell slightly. 10-year bond yields were near 16 in the market yesterday as the Fed continued its efforts to hit its 2% inflation target on the back of a strong economy and expectations that borrowing costs will remain high. reached the highest level in years.
5% Yield on 2-Year Treasuries Means ‘Pain Trade’ to Banks: TD
JGB latest price vs. previous business day (bp) rate of change US 30-year bond yield 4.40%-4.3-0.97% US 10-year bond yield 4.33%-1.2-0.27% US 2-year bond yield 5.05%5.00.99% US Eastern Time 16:54
Alex Coffey, senior strategist at TD Ameritrade, said while rate hikes may be over for this cycle, it doesn’t necessarily mean a rate cut is imminent. .
Fed Chairman Jerome Powell will speak at the Kansas City Fed’s annual symposium in Jackson Hole, Wyoming, on Wednesday. It has attracted the attention of investors looking for clues about the trajectory of policy rates.
New York Life Investments economist and portfolio strategist Lauren Goodwin says there is some talk about the neutral rate of interest, called the r* (R star), which means the level of interest rates that keeps the economy neither cooling nor overheating. Maybe.
“If it suggests that investment, and thus potential economic growth, may be moving upward as a result of climate change or the digital infrastructure required by AI, it could be taken as a hawkish message. because it could mean the possibility of stabilizing at .
foreign exchange
Yen rose against all 10 major currencies. The dollar index remained largely unchanged. Markets are waiting for Powell’s speech.
Bloomberg Dollar Index 1241.011.130.09% USD/JPY ¥145.88-¥0.34-0.23% EUR/USD$1.0849-$0.0047-0.43% 16:54 US Eastern Time
Valentin Marinov, head of G10 FX research and strategy at Crédit Agricole CIB, said the risk associated with the Jackson Hole meeting was that Fed Chairman Jerome Powell and ECB President Christine Lagarde said the tightening cycle was nearing its peak. It may be, but the possibility of monetary easing is still extremely low and is a distant story,” he said.
If the Jackson Hole meeting triggers a resumption of long-term bond buying, it could also test the recent risk rally phase, which “could recapture demand for the high-yielding, safe-haven dollar.” It says.
The dollar fell 0.5% against the yen at one point to 145.50 yen to the dollar. In the Japanese market on the 22nd, long-term interest rates in Japan rose to the level for the first time in about nine and a half years. However, from a technical analysis, the dollar/yen is still on a bullish trajectory.
crude
New York crude oil futures fell slightly. Despite signs of a rebound in supply, concerns persist over demand in China, the world’s largest importer.
West Texas Intermediate (WTI) closed below $80 a barrel. The lack of sense of direction was a result of thin sales associated with the summer holiday season. Confirmed crude oil exports from Iran surged to 2.2 million barrels per day so far in August. Turkey and Iran have held multiple talks aimed at restarting major oil pipelines.
Oil prices, which started in late June, have lost momentum in recent weeks. Futures prices are about the same as they were at the beginning of the year. Markets are tightening as Saudi Arabia and Russia, the main members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, make efforts to curb production. However, China’s demand outlook is unclear, and the United States is expected to maintain high interest rates for a long period of time to curb inflation.
“Whether it’s recession fears, economic headwinds or demand concerns, they’ve all been satisfactorily offset by OPEC+’s supply management policies,” said Tamas Varga, an analyst at PVM. analyzed.
WTI futures for October delivery on the New York Mercantile Exchange (NYMEX) closed at $79.64 a barrel, down 48 cents from the previous day. The September contract, the last day of trading, fell 37 cents, or 0.5%, to close at $80.35.
London ICE North Sea Brent October delivery fell 43 cents to $84.03.
Money
New York gold prices rise. There was a moment when the dollar fell due to the appreciation of the dollar, but it recovered.
Markets are waiting for Powell’s speech. The Fed’s speech on Wednesday could provide some insight into the outlook for U.S. policy rates.
Gold spot prices rose 0.1% to $1,897.39 an ounce as of 2:15 pm New York time. December gold futures on the New York Mercantile Exchange (COMEX) rose $3, or 0.2%, to $1,926.
Original title:Stocks Struggle as Nvidia Drops in Earnings Run-Up: Markets Wrap(excerpt)
Treasuries Mixed, Curve Flattens as Long-End Pares Recent Losses（抜粋）
Yen Gains Against Peers, Dollar Awaits Jackson Hole: Inside G-10（抜粋）
Oil Edges Lower in Thin Trading Amid Supply Rebound, Demand Woes(excerpt)
Gold Erases Gains as Traders Eye Cues on Fed Interest Rate Path（抜粋）
2023-08-22 20:55:00
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