Eyes on Nvidia earnings today

Asian stocks declined, and futures indicated a muted opening in Europe as traders awaited Nvidia Corp.’s earnings report. The MSCI Asia Pacific Index fell by 0.5%, trimming its nearly 1% gain from the previous session. Contracts for the Euro Stoxx 50 rose by 0.4%. Meanwhile, US futures recorded slight gains after Wall Street benchmarks managed to close higher on Tuesday, despite the escalation of Russia’s war against Ukraine.

Nvidia sets high expectations

Investors are closely watching Nvidia to see if the world’s most valuable company can sustain its impressive performance, which has been driven by increased spending on artificial intelligence (AI) hardware. On Tuesday, the chipmaker’s stock rose by 4.9%. Trading in options indicates that Nvidia’s upcoming earnings report will be the most significant catalyst remaining this year, even more so than the Federal Reserve’s December meeting.

Expectations are high, and the market is positioned to the long side ahead of Nvidia’s earnings announcement, anticipating a fifth consecutive quarterly earnings beat. Given Nvidia’s substantial influence, its performance is sure to impact sentiment in both the tech sector and the broader market as we approach the end of the year.

Corporate highlights:

• Walmart Inc. has raised its outlook for the year due to a strong start to the holiday season and high demand from U.S. consumers seeking value.
• In contrast, Lowe’s Companies Inc. has continued its streak of declining sales in the third quarter as it grapples with the ongoing effects of a weak housing market.
• Alphabet Inc.’s Chrome browser could potentially be valued at up to $20 billion if a judge approves a Justice Department proposal to sell the business. This move would mark a historic crackdown on one of the world’s largest tech companies.
• Super Micro Computer Inc. has hired a new auditor and submitted a plan to comply with Nasdaq listing requirements.
• Representatives from Hewlett Packard Enterprise Co. and Juniper Networks Inc. met with Justice Department antitrust enforcers last week in a final effort to persuade the agency not to challenge their proposed $14 billion merger, according to sources familiar with the situation.

The dollar rally may pause for a while

Bloomberg’s dollar gauge remained relatively stable following a three-day decline, suggesting that the rally sparked by Donald Trump’s election victory may have peaked. Meanwhile, the yield on the 10-year US Treasury remained unchanged after a two-basis-point drop in the previous session.

The S&P 500 rose by 0.4%, while the Nasdaq 100 increased by 0.7%. A measure of the “Magnificent Seven” megacap stocks advanced by 1.7%. The yield on 10-year US Treasuries fell by two basis points to 4.40%.

Gold remains steady above 2600

Gold prices have increased for a third consecutive day, supported by rising demand for safe-haven assets amid escalating tensions in Russia’s war against Ukraine.

The precious metal traded above $2,640 an ounce after rising more than 2% in the first two days of the week. On Tuesday, Gold prices climbed after President Vladimir Putin approved an updated nuclear doctrine that expanded the conditions under which nuclear weapons could be used. Additionally, Ukraine carried out its first strike into Russia using American missiles. Investors often turn to Gold as a safe investment during times of geopolitical and economic uncertainty.

Eyes on US crude oil inventories

Oil prices remained steady as an industry report indicated an increase in U.S. crude inventories ahead of the government figures.

Brent crude was trading near $73 per barrel after closing slightly higher on Tuesday, while West Texas Intermediate was above $69. The American Petroleum Institute reported that crude stockpiles rose by 4.8 million barrels last week, although fuel supplies decreased, according to a document reviewed by Bloomberg. The Energy Information Administration is set to release its data on inventories, refining, and fuel demand later on Wednesday.

The crude oil market currently lacks a strong catalyst as it evaluates supply outlooks and geopolitical developments to determine a trend-setting trade direction.

Prepared by Nour Hammoury, Chief Market Analyst at SquaredFinancial
Nour is an investor, independent market strategist, and financial advisor. He holds a BA in Finance and Banking Science from Al-Ahliyya Amman University and a CFTe in Economics from the International Federation of Technical Analysts. He has more than 15 years of experience in forex, stocks, and global economic developments, as well as central bank policies and intermarket analysis. He appears regularly on major international TV networks, such as BBC, Al-Jazeera, Al Hurra, CNBC, and Bloomberg, holding open discussions and sharing insights and readings of the markets and trends.

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