The week is just getting started, but it’s already packed
with major events, like the recent escalation in the Middle East after Israel
attacked southern Lebanon, keeping markets on edge.
While geopolitical events often shake up commodity markets,
affecting oil and gold
prices, macroeconomic trends have a wider influence, impacting
everything from stocks and bonds to currencies and even crypto.
Therefore, watching Thursday’s updated Q2 GDP report and
Friday’s U.S. inflation data (PCE) is crucial. A substantial surprise in these
figures could move the market from risk-on to risk-off.
Another important event to watch is Nvidia’s quarterly
report. As a major player in the GPU market, even a slight miss in their
results could hurt investor sentiment, potentially leading to a drop in Nvidia stock
price.
And even if Nvidia hits its targets, it might not be enough
to satisfy the market, which has come to expect nothing less than stellar
performance. It’s a bit like an addiction—there’s always a craving for more.
The good news is that the market is not expecting
extraordinary figures this time: revenues increased just 113% to $28.7 billion
compared to the same period last year.
Another critical aspect that investors will pay attention
to is the company’s prospects, especially regarding demand for its products
from tech giants such as Google, Meta, Microsoft, and Amazon.
They should also pay attention to the situation regarding
chip supplies to China: how things are progressing, whether the company expects
further restrictions, and what impact this could have.
In addition, it would be interesting to hear management
talk about the ongoing
U.S. antitrust investigation into possible abuse of
Nvidia’s position in the AI chip market.
Is it a good idea to buy a company’s stock before its
earnings report?
Buying stocks just before an earnings report is risky. You
could end up with significant gains or losses, so it’s not the best approach
for those who prefer a more cautious strategy.
If you’re considering it, remember that Nvidia CEO Jensen
Huang sold a record $323 million worth of stock in July and that the company’s
management has been dumping hundreds of millions of shares.
This doesn’t guarantee a fall or imply insider knowledge,
but it doesn’t help the case either. In addition, Nvidia’s
stock is expensive: right now, its P/E is about 74,
while the company’s total price is $3.2 trillion.
Finally, market sentiment typically shifts when the Fed
changes its monetary policy. Based on Powell’s speech at the Jackson Hole
Symposium, it might show a shift as early as September.