Articles

Markets Consolidate Ahead of Inflation Data and Nvidia Earnings – Nasdaq Up 0.16%

Global financial markets consolidated around recent levels yesterday as investors awaited upcoming US inflation data and key Nvidia earnings results later today. The three major US indices all edged higher, with the Nasdaq and S&P 500 both gaining 0.16%, while the Dow managed a modest 0.02% rise. US Treasury yields were mixed; the 2-year yield fell by 2.9 basis points to 3.905%, while the 10-year yield added 1.3 basis points, closing at 3.831%. The US dollar continued to decline, nearing annual lows, with the DXY closing at 100.55 in New York. Oil prices remained volatile, with Brent crude dropping 2.3% and WTI falling 2.4%, closing at $79.55 and $75.53 per barrel, respectively. Gold stayed close to record levels, inching 0.3% higher to close at $2,525 per ounce.

Nvidia in Focus for US Markets Today

While the upcoming US PCE data will undoubtedly influence markets later this week, there is no doubt that Nvidia’s earnings report today will significantly impact stock sentiment. The ‘magnificent seven’ tech giants have faced a challenging earnings season, especially given the high expectations. With Nvidia being the last of these to report, investors are bracing for volatility around the announcement. Options pricing suggests that traders are anticipating a potential 10% movement in Nvidia’s share price tomorrow. Given Nvidia’s current market cap of $3.1 trillion, this could result in a $305 billion swing. Considering that Nvidia now contributes nearly 5% to the S&P 500’s earnings and 7% of its market cap, the broader market impact could be substantial.

Inflation Data and Nvidia Earnings in Focus

Today’s macroeconomic calendar features two key updates that could drive market movements. Early in the trading day, the focus will be on the Australian markets as they receive the latest inflation data from the ABS. The expectation is for the CPI to show a 3.4% year-on-year increase, and any figure exceeding this could lead to renewed speculation about a potential rate hike from the RBA, potentially driving the Australian dollar higher. Later in the Asian session, FOMC member Christopher Waller is scheduled to speak during a visit to India, though most investors will be eyeing the US session, particularly the release of US Crude Oil inventories and Nvidia’s earnings report, which is set to follow shortly after the Wall Street closing bell.

The post General Market Analysis – 28/08/24 first appeared on IC Markets | Official Blog.

• Prior month -2.9%
• Construction work done for Q2 0.1% versus 0.7% expected

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 3.8%
• Weighted CPI year on year 3.5% vs 3.4% estimate
• CPI SA YoY x.x% vs 3.9% prior

This article was written by Greg Michalowski at www.forexlive.com.

The PBOC sets the USDCNY central rate at 7.1216 not far from the estimate of 7.1219. That is down from previous setting at 7.1249.

The PBOC injects CNY 277.3B the seven day reverse repo at maintained rate of 1.70%

This article was written by Greg Michalowski at www.forexlive.com.

Australia’s S&P/ASX 200 ind trading down -0.12% at 8061.50 in early trading.

The index has been building since it’s a tumble back on August 5 of -3.7% (same day the Nikkei fell -12.4%). Since that time 13 days have been higher with only 2 days lower.

The high close level comes in at 8114.7. The close yesterday reached up to 8084.50.

This article was written by Greg Michalowski at www.forexlive.com.

Japan’s Nikkei futures are trading down -0.4% yearly trading.

US stocks did move higher but only marginally. Yesterday the Nikkei 225 rose 0.47%

This article was written by Greg Michalowski at www.forexlive.com.

The reports from Israel:

• The army mobilized thousands of soldiers from special units in preparation for the large scale operation in the northern West Bank.
• Operation in Tukarm and Jenin, is expected to last a long time. Up to weeks
• The Army conducts the largest operation in the West Bank since 2002
• The operation in the West Bank will continue for several days

This article was written by Greg Michalowski at www.forexlive.com.

In geopolitical news from Israel, the Israeli army is said to have launched a large-scale operation against militants in various parts of the northern West Bank.

This is according to Al Jazeera.

This article was written by Greg Michalowski at www.forexlive.com.

The numbers via oilprice.com on Twitter:

The EIA estimates to be released tomorrow at 10:30 AM show:

• Crude oil drawdown of -2.265 million barrels
• Gasoline inventories drawdown of -1.587 million
• Distillates drawdown of -1.083 million

—

This data point is from a privately-conducted survey by the American Petroleum Institute (API).

• It’s a survey of oil storage facilities and companies
• The official report is due Wednesday morning US time.

The two reports are quite different.The official government data comes from the US Energy Information Administration (EIA)

• Its based on data from the Department of Energy and other government agencies
• Whereas information on total crude oil storage levels and variations from the previous week’s levels are both provided by the API report, the EIA report also provides statistics on inputs and outputs from refineries, as well as other significant indicators of the status of the oil market, and storage levels for various grades of crude oil, such as light, medium, and heavy.
• the EIA report is held to be more accurate and comprehensive than the survey from the API

The price of WTI crude oil is trading at $75.82. The high price today reached $77.44. The low price was at $75.43. Technically, the price remained below its 200-day moving average at $77.80. Staying below the 200-day moving average keeps the sellers in play – and in control – at least from the perspective of the daily chart.

This article was written by Greg Michalowski at www.forexlive.com.

• US 2-year note auction results 3.874% vs 3.880% WI
• US August consumer confidence 103.3 vs. 100.7 expected
• Dallas Fed services sector outlook index -7.7 vs -0.1 prior
• Richmond Fed August manufacturing index -19 versus -14 expected
• US June Case-Shiller home price index +0.4% m/m vs +0.3% expected
• Fed discount rate minutes: Chicago and New York directors favored cuts
• White House: Iran is ‘postured and poised’ to launch an attack on Israel
• ECB’s Knot: Comfortable with gradual easing

Markets:

• US 10-year yields up 1.9 bps to 3.83%
• WTI crude oil down $1.69 to $75.73
• Gold up $8 to $2524
• S&P 500 up 0.2% to 5226
• NZD leads, USD lags

Early angst in European fixed income markets spread to the US, leading to some risk aversion and a firming US dollar. One catalyst for the selling in Europe was a comment from Kier Starmer that there will be pain in the budget. Others pointed to month end but whatever the cause, it added to worries ahead of a two-year sale.

With yields substantially below last month, there were fears of a tail in the $69 billion auction. That didn’t come to pass as it was bid just before the deadline and then again after a 0.6 bps stop through. That result validated the lower range in yields and idea that the Fed will be aggressive.

In turn, dollar sellers returned with a decent amount of vigour, leading to 15-25 pip moves lower in the dollar and a rebound in gold to positive territory.

Prior to that, economic data wasn’t a big factor. Eyes were on the consumer confidence report and the rest of the slate but there were no big surprises.

This article was written by Adam Button at www.forexlive.com.

The economic calendar is light in the new trading day. The weekly private API data will start the session when it is released at 5:30 PM ET.

Later at 9:30 PM ET, the Australia month CPI for July will be released.

The monthly CPI data from Australia does not show all components of the CPI, that’ll have to wait for the quarterly data release.

The monthly CPI indicator does, however, provide a timelier indication of inflation using the same data collected for use in the quarterly CPI. The monthly reading includes updated prices for between 62% and 73% of the weight of the quarterly CPI basket, its not the full picture.

Looking ahead,

• September 25:
  *Monthly Consumer Price Index indicator for August
• October 30:
  *September Quarter 2024 – this is the biggie! Also released on that day will be the monthly Consumer Price Index indicator for September

The next RBA meeting following the quarterly CPI due on October 30 is on 4 and 5 November. Hence it will be key for the central bank but still a ways off:Nevertheless, for July:

• CPI MoM SA, no est. Last month 0.4%
• CPI SA YoY, Last month 3.9%
• Weighted CPI YoY for July 3.4% vs 3.9%
• Construction Work Done in Q2 will also be released at 9:30 PM ET with estimate at 0.7% vs -2.9% last quarter.

Looking ahead to the European and US sessions:

• FOMC voting member Waller speaks in Mumbai at 1:15 AM
• UBS economic expectations index for Switzerland will be released at 4 AM ET. Last month 9.4
• BOE MPC member Mann speaks at 8:15 AM ET
• US crude oil inventory data will be released at 10:30 AM ET
• After the US stock market close on Wednesday Nvidia, Salesforce and CrowdStrike will all report their earnings. The focus will be mostly on Nvidia.
• Later at 6 PM, Fed’s Bostic will speak.

This article was written by Greg Michalowski at www.forexlive.com.

The Dow industrial average closed higher and at a record level for the second consecutive day. The record was only by the smallest of margins (well almost the smallest). The Dow industrial average only rose 0.02% on the day.

The broader S&P and NASDAQ indices also closed marginally higher with matching 0.16% gains.

Tomorrow Nvidia will announce their earnings after the close. The market is focused on that event. Also after the close tomorrow will be earnings from Salesforce and Crowdstrike.

The final numbers are showing:

• Dow industrial average rose 9.96 points or 0.02% at 41250.51
• S&P index rose 8.94 points or 0.16% at 5625.79
• NASDAQ index rose 29.05 points or 0.16% at 17754.82

The small-cap Russell 2000 help -14.92 points or -0.67% at 2202.99

Nvidia shares rose 1.46% ahead of their earnings report after close tomorrow. The other members of the Magnificent 7 had mixed results:

• Meta Platforms, -0.39%
• Apple, +0.37%
• Amazon, -1.36%
• Alphabet, -0.89%
• Microsoft, +0.08%
• Tesla, -1.88%

This article was written by Greg Michalowski at www.forexlive.com.