#NvidiaEarnings #MarketVolatility #TechStocks
Market Analysis: August 27, 2024 – Nvidia Earnings Loom Large
Today, the stock market experienced a mixed bag of emotions as investors anxiously awaited the highly anticipated earnings report from Nvidia, set to be released after the market close on Wednesday. The Dow Jones Industrial Average ($DJI) dropped about 0.2%, while the S&P 500 ($GSPC) and Nasdaq Composite ($IXIC) also edged lower, down 0.2% and 0.3%, respectively. This cautious sentiment was fueled by the uncertainty surrounding Nvidia's performance and the broader implications it could have on the tech sector.
Nvidia's Earnings Expectations
Nvidia, a leader in AI chip technology, is expected to deliver strong results, potentially driving its stock to new heights. Todd Gordon, founder of Inside Edge Capital, LLC, believes that Nvidia's stock has the potential to rise by 50% to 75% before encountering significant resistance. He bases this analysis on a broader technical perspective, utilizing an Elliott Wave analysis that suggests a substantial upside before the stock reaches resistance levels between $199 and $234.
Market Volatility Ahead of Earnings
The market's nervousness is evident in the options market, where the anticipated fluctuation is approximately $12 up or down from current prices. This volatility has led Todd Gordon to implement a hedging strategy in his short-term, active "fast money" account. He plans to sell $140 calls expiring this Friday, August 30th, and purchase a put spread beneath his position to provide protection against potential losses.
Broader Market Trends
Beyond Nvidia, the market is closely watching economic indicators for signs of how aggressive the Federal Reserve might be in cutting interest rates. Fed Chair Jerome Powell's recent statement that the "time has come for policy to adjust" has reinforced expectations of a rate cut at the September policy meeting. This anticipation has led to a slight increase in the yield on 10-year Treasurys, which now stands at around 3.87%.
Other Market Movers
Other mega-cap stocks, such as Microsoft ($MSFT), Amazon ($AMZN), Meta Platforms ($META), Apple ($AAPL), and Alphabet ($GOOGL), were also moving lower ahead of the bell, reflecting the broader caution in the market. Apple, in particular, made headlines with the announcement that it is replacing its long-standing CFO with an insider, Kevan Parekh, just two weeks before its biggest product launch of the year.
Economic Data Releases
This week will see a slew of economic data releases, including the latest readings on consumer confidence and home prices, scheduled for Tuesday. The big number of the week will come on Friday, when the government releases the July Personal Consumption Expenditures index, which is the Federal Reserve's preferred measure of inflation.
Conclusion
As the market waits with bated breath for Nvidia's earnings report, investors are bracing themselves for potential volatility. The broader economic landscape, with its focus on interest rate cuts and inflation data, adds to the uncertainty. One thing is clear: the next few days will be crucial in shaping the market's direction for the remainder of the year.
Leave a Reply