A have a look at the day ahead in European and global markets from Tom Westbrook
Nvidia is holding the investment world in thrall ahead of an earnings report later today that, even when it delivers the expected doubling of second-quarter revenue, may not satisfy investors accustomed to market-moving outperformance.
The chipmaker’s market value was around $390 billion on the eve of the launch of artificial intelligence (AI) chatbot, ChatGPT, lower than two years ago.
Now it is almost $3.2 trillion, and in June it swaggered, briefly, to a turn because the most dear company on earth, powered by chips that provide the hardware behind the AI computing boom.
Sheer size and its position as an industry bellwether mean its earnings, due after the U.S. close on Wednesday, can move the whole market.
Trade in Asia was light and moves modest ahead of the discharge, and European equity futures were flat.
Europe’s data and reporting calendar is usually bare, with Eurozone broad money growth seen rising to 2.7%, while markets are focused on Nvidia’s results ahead of European and U.S. inflation measures due later within the week.
Options prices show traders have braced for a near 10% swing in Nvidia’s shares after they trade on Thursday, translating in dollar terms to greater than $300 billion in market value – likely the biggest ever market move on an earnings report.
That might dwarf the market capitalisation of 95% of S&P 500 constituents, in response to LSEG data, and doubtless send shockwaves through the worldwide semiconductor sector.
Elsewhere, sterling sat near a 2-1/2 yr high on Wednesday as one in all the largest beneficiaries of a slide within the dollar. Traders anticipate about 100 basis points of U.S. rate of interest cuts this yr against only 40 bps in Britain.
Because the markets await Nvidia’s turn at centre stage, fans of Oasis, which signed its first record deal in 1993 just just a few weeks after Nvidia’s founding, can join the scramble for Mancunian hotel rooms after the announcement of planned Oasis reunion shows next yr.
Key developments that might influence markets on Wednesday:
Earnings: Nvidia
Economics: Eurozone M3 growth, French unemployment
(By Tom Westbrook; Editing by Edmund Klamann)