With Jay Powell’s recent speech and the Federal Open Market Committee’s commitment to lowering the fed funds rate, upcoming events such as Nvidia’s earnings release and data revisions have taken center stage in the financial markets.
NVDA’s EPS and Revenue Estimate Revisions
EPS and revenue estimates for Nvidia have been revised significantly higher for fiscal year ’25. Since last August, revenue estimates have surged by 49% and EPS estimates by 64%. Despite some concerns, the stock remains a popular choice for investors.
GDP and Inflation Data
The Q2 ’24 GDP data showed strong growth at +2.8%, but recent jobless claims and payroll reports have raised some questions. The Core PCE data is expected to show mild inflation, with most indicators below 2% excluding shelter costs.
The 10-Year Treasury Yield
Despite the Fed’s rate cuts, there is a risk of a steepening yield curve in the Treasury market. Monitoring the 10-year Treasury yield is crucial, as a drop below 3.785% could lead to further declines. However, bond bulls remain cautious due to ongoing Treasury issuance and deficit funding.
S&P 500 Earnings Data
Recent data shows a slight increase in the forward 4-quarter estimate for S&P 500 earnings. The market is eagerly awaiting Nvidia’s earnings release, which could impact the tech sector and the S&P 500 as a whole.
Conclusion
If Nvidia fails to meet expectations, it could have a negative impact on the overall market, especially as we enter September, historically a challenging month for investors. Despite some overbought signals, lower interest rates and Fed support are positive factors for future stock returns.
Remember, investing involves risks and past performance is not indicative of future results. Stay informed and cautious in your financial decisions. Thank you for reading!