The American stock markets closed around the flatline yesterday as investors awaited Nvidia’s quarterly earnings report, which was released after the closing bell. Expectations were high, with investors anticipating revenue of $33.3 billion, representing an 83 percent growth. The high expectations make it challenging to impress investors, as was the case in the previous quarter when the stock fell 6 percent despite exceeding expectations. The quarterly report is considered crucial for the market, with analysts viewing it as a barometer for the overall market sentiment, and the results are expected to have a ripple effect on the rest of the market. Nvidia dropped 2.5 percent in after-hours trading following the report, which exceeded expectations but hinted at further delays in the upcoming cash cow Blackwell.
On the macro front, two Federal Reserve members have given conflicting statements on inflation, with one expressing concern and the other reassurance. This has dampened optimism for a December rate cut, which just two weeks ago stood at 80 percent but has now fallen to 55 percent. The broad S&P 500 index closed flat, while the Dow Jones Industrial Average rose 0.3 percent. The tech-heavy Nasdaq fell 0.1 percent.
Commodities saw mixed trading on Wednesday, with oil prices declining as investors assessed the risks surrounding the escalating conflict between oil-producing Russia and Ukraine. The risk of the war affecting Russia’s oil exports has provided a floor for the declining oil prices, which have been pressured by weakening global demand for the commodity. The low demand, reflected in the potential OPEC decision to further reduce production on December 1st, weighs more heavily than the global conflicts and is expected to continue to keep a lid on oil prices. WTI crude oil decreased by $0.5 to $68.9 per barrel, while Brent crude oil dropped by $0.4 to $72.9 per barrel.
Base metals traded mixed, with nickel emerging as the day’s winner, rising by 0.6 percent, followed by lead, tin, and zinc, which all increased by 0.4 percent. Copper declined by 0.4 percent, while aluminum was the day’s loser, dropping by 0.6 percent. Gold continued to climb for the third consecutive day to a week-high level. The escalation between Russia and Ukraine has led investors to seek safer assets such as gold, considered a secure investment in uncertain times. Conversely, the rising dollar price and reduced optimism for a Federal Reserve rate cut in December act as anchors. Gold rose by $18.0 to $2,650.1 per ounce.
Among individual U.S. listed companies, Nvidia fell by 0.8 percent ahead of its quarterly report and an additional 2.5 percent in after-hours trading following the report’s better-than-expected results. Tesla, a major customer of Nvidia, dropped by 1.2 percent, while pharmaceutical company Eli Lilly climbed by 3.3 percent. Retail giant Target plunged by 22.0 percent on its report, and Super Micro Computer retraced downwards by 8.7 percent after Tuesday’s 31 percent rally.
The U.S. ten-year Treasury bond remained unchanged at 4.41 percent.
Asian markets are broadly falling in early trading, with Nvidia’s report results weighing on TSMC and Hynix, both suppliers to the company, dropping by up to 1.5 percent. In Japan, the government announced plans to spend up to $141 billion on a new stimulus package aimed at rising household prices, but the market seems unimpressed as the Japanese index continues to trade lower. In China, government advisors will submit their proposals to the central economic work conference next month, with the majority reportedly favoring a 5 percent growth target for 2025. The Chinese Shanghai Composite Index is down by 0.2 percent at 07:45, and the Hang Seng Index is trading 0.3 percent lower. The Japanese Nikkei 225 Index is down by 0.9 percent.
On the Stockholm Stock Exchange, the reporting front is quiet in the morning, with Ablivia, Vivesto, and Malmbergs set to report later in the day.
Barclays has raised the price target for Vimian Group to 40 kronor and reiterates a neutral rating, while SEB has lowered the price target for Viva Wine to 50 kronor and maintains a buy recommendation.
On the macro front, Thursday will be a calm day. In the U.S., new data on initial jobless claims will be reported by the Department of Labor at 14:30, while the Philadelphia Federal Reserve will announce November’s manufacturing index and employment index. At 16:00, the National Association of Realtors will disclose existing home sales in the country, followed by the Federal Reserve reporting on its balance sheet at 22:30. Notable speeches include Bank of England’s Mann at 15:00, ECB’s Lan and Elderson at 16:30, and Federal Reserve’s Barr at 22:40.