Stock futures were broadly steady on Wednesday as all eyes were on Nvidia’s earnings due after the closing bell.
Investors will look to Nvidia ‘s results as a broader indicator of the strength of artificial intelligence-related demand, which propelled markets upward for much of this year.
Expectations are high, with Wall Street forecasting that second-quarter revenue and profit will both more than double from a year earlier.
Overseas Markets
Overseas stocks were mixed. European indexes were mostly higher, while Hong Kong’s Hang Seng Index fell 1%.
Premarket Movers
Box raised its annual outlook and said its artificial intelligence offering was helping drive growth. Shares rose 6.3%.
Coinbase and MicroStrategy stocks fell alongside the price of bitcoin, which dropped below $60,000.
Nvidia was up 0.4% ahead of the release of its second-quarter earnings.
SentinelOne reported second-quarter earnings and revenue that topped estimates and its revenue guidance for the third quarter met expectations. Shares rose 1%.
Super Micro Computer shares remained under pressure after short seller Hindenburg Research published a critical report Tuesday. Shares fell 3%.
Tuesday’s Post Close Movers
Junee signed a pact with a Nvidia partner in Australia to develop artificial-intelligence products and supercomputing centers, including one costing $200 million. Shares rose 34%.
NCino expects revenue between $136 million and $138 million in its third quarter, missing the $138.7 million that analysts polled by FactSet forecast. Shares fell 12%.
Nordstrom topped earnings estimates and slightly raised its full-year guidance. Shares rose 7.9%.
PVH said revenue in its fiscal second quarter fell 6%, to $2.07 billion, in line with analysts’ expectations, dragged down by decreases in direct-to-consumer and wholesale revenues. Shares fell 7.7%.
Watch For:
EIA Weekly Petroleum Status Report; Earnings from Royal Bank of Canada; Fedspeak from Raphael Bostic
Today’s Top Headlines/Must Reads:
– Credit Scores Without Debt? Fintech Cards Baffle Credit Industry
– CrowdStrike Ends Turbulent Quarter, Battered but Standing
– Raising Prices Can Bring Trouble, Even for Companies Like Nvidia and Tesla
– Bank Stocks Could Break Out on a Rate Cut. Here’s How to Play Along
The dollar rose after falling to a 13-month low on Tuesday in the wake of Jerome Powell’s remarks at Jackson Hole.
“There is probably some room for a small rebound in the dollar as the effect of Powell’s Jackson Hole speech wears off and risk sentiment softens,” ING said.
The DXY dollar index could settle above 101.0 in the next couple of days, it added.
The euro could weaken if data on Friday show eurozone inflation fell more than expected in August as it might boost European Central Bank interest-rate cut expectations, Commerzbank said.
“The greater the fall in the inflation rate, the more certain the market can be that the interest rate cut in September will come as expected and that the ECB will continue its cutting cycle beyond that.”
Christine Lagarde in July emphasized that future decisions would be data dependent. The ECB is expected to cut rates by 150 basis points by mid-2025 compared to 200bp for the Federal Reserve, Commerzbank said.
Energy:
Oil prices edged lower, with a failure to break the 200-day moving average triggering a selloff on Tuesday, bringing a halt to a three-day, supply-risk driven rally, ANZ Research said.
Nevertheless, geopolitical tensions continued to hang over the market, as Libya’s eastern government declared force majeure on all oil fields, terminals and facilities as part of a spat with the western government, and tensions across the Middle East remained elevated, ANZ said.
The exchange of fire over the weekend between Israel and Hezbollah still threatened to derail ceasefire negotiations, and while both parties said they have finished military operations for now, the market is wary of a wider outbreak and consequent supply risks, it added.
Metals:
Gold futures slipped on profit taking and a stronger dollar, but remained relatively close to all-time highs.
The market is looking ahead to key U.S. inflation data that will offer clues as to the Federal Reserve’s rate cutting path, ANZ Research said.
Next week will see a raft of U.S. data, culminating in initial jobless claims on Sept. 5.
Further dovish commentary from Fed speakers also supported sentiment, as Mary Daly said she believes it is appropriate for the central bank to begin reducing rates, ANZ added.
TODAY’S TOP HEADLINES
Gloom Falls Over One of China’s Most Successful E-Commerce Giants
The gloomy outlook from Temu owner PDD Holdings this week underlined the severity of China’s economic slowdown and the need for one of China’s most successful e-commerce companies to improve its supply chain.
Executives outlined how belt-tightening Chinese consumers have pushed PDD’s rivals into its space and gave a cautious outlook for Temu, PDD’s international bargain site whose soaring popularity has landed it in the crosshairs of regulators and lawmakers in the West. After months of protests by PDD suppliers, they said that profit will suffer as the company invests to address supply-chain inefficiencies and reduces fees for merchants.
GM Delays Indiana Battery Factory in Latest EV Pullback
General Motors said it would delay the start of production at a planned battery plant in Indiana by about a year, to 2027, the company’s latest downshift in its move to electric vehicles.
The Detroit-based automaker and Korean partner Samsung SDI disclosed the new timeline for the plant in a news release Tuesday, as they formalized plans to move forward with the $3.5 billion factory in New Carlisle, Ind.
Salesforce Stock Has Gone Nowhere. Will Demand for Its AI Change That?
Wall Street bulls expect an uneventful July quarter report, when salesforce.com announces results after Wednesday’s close. Or so they hope.
“Our field checks weighed slightly negative for salesforce’s business activity and operating environment,” wrote Oppenheimer’s Brian Schwartz in a preview note last week on the enterprise software vendor.
Bank of Japan Deputy Governor Reaffirms Readiness for More Rate Hikes
Bank of Japan Deputy Gov. Ryozo Himino has backed the case for further interest-rate hikes if the economy and prices grow as expected, echoing recent comments from the central bank’s chief.
Himino’s remarks on Wednesday suggest that the BOJ’s top officials are on the same page about the bank’s future policy path.
Don’t Miss Out on the Rally in Gold Mining Stocks. Here’s What to Buy Now.
If the rally in gold bullion this year has been quiet compared with the roar of artificial-intelligence companies, the surge in mining stocks has been barely a whisper.
Fund investors should be paying attention to these mining stocks but aren’t. While the behemoth $69.1 billion SPDR Gold Shares (ticker: GLD) exchange-traded fund for bullion is up 21% this year, the $14.7 billion VanEck Gold Miners ETF (GDX) is up an even more impressive 26%. Yet, mining-stock funds in Morningstar’s Equity Precious Metals category have seen $1.7 billion in outflows; the VanEck ETF, the largest, alone has lost $1.3 billion. Meanwhile, SPDR Gold Shares, in Morningstar’s Commodities Focused category, has lost $1.8 billion.
A Time Bomb Is Threatening Economies Across Asia
Asia’s fastest-growing economies are hiding a dirty secret: Their youngest workers are battling stubbornly high rates of unemployment.
Bangladesh-long considered a development model for slashing extreme poverty-clocked an average of 6.5% economic growth a year for the last decade. But over the past few years, youth unemployment climbed to 16%-the highest level in at least three decades, according to data from the United Nations International Labor Organization.
Special Counsel Unveils New Trump Indictment in Jan. 6 Case
WASHINGTON-Special counsel Jack Smith on Tuesday filed a revised indictment that accuses Donald Trump of trying to undo his 2020 election loss, saying the case remains largely intact even after the Supreme Court’s July ruling that former presidents enjoy sweeping immunity for acts they take while in office.
With the new indictment, Trump faces the same four federal offenses he was originally charged with related to a series of events that culminated in the Jan. 6, 2021, attack on the U.S. Capitol. But Smith said the government refashioned the case to conform to the Supreme Court’s holding that presidents can’t be prosecuted for exercising their core constitutional powers.
Lawsuits Fly Over Election Rules and Who Gets to Vote
Lawyers are ramping up battles over who gets to vote and how those votes are counted in the presidential election.
Democrats sued Georgia’s state election board Monday about its contentious new rule for certifying results. Republicans filed lawsuits in North Carolina and Arizona challenging voter registration procedures there. The Supreme Court also stepped into the fray: Last week the justices took a mixed approach over proof-of-citizenship rules in Arizona.
Pieridae Announces C$30M Equity Rights Offering With C$25M Standby Commitment
12:30/CAN: Jul Model-based Principal Field Crop Estimates
14:00/US: Jul Metropolitan Area Employment and Unemployment
23:01/UK: Jul UK monthly automotive manufacturing figures
