The week is just getting started, but it’s already packed with major events, like the recent escalation in the Middle East after Israel attacked southern Lebanon, keeping markets on edge.
While geopolitical events often shake up commodity markets, affecting oil and gold prices, macroeconomic trends have a wider influence, impacting everything from stocks and bonds to currencies and even crypto.
Therefore, watching Thursday's updated Q2 GDP report and Friday's U.S. inflation data (PCE) is crucial. A substantial surprise in these figures could move the market from risk-on to risk-off.
Another important event to watch is Nvidia's quarterly report. As a major player in the GPU market, even a slight miss in their results could hurt investor sentiment, potentially leading to a drop in Nvidia stock price.
And even if Nvidia hits its targets, it might not be enough to satisfy the market, which has come to expect nothing less than stellar performance. It’s a bit like an addiction—there’s always a craving for more.
The good news is that the market is not expecting extraordinary figures this time: revenues increased just 113% to $28.7 billion compared to the same period last year.
Another critical aspect that investors will pay attention to is the company's prospects, especially regarding demand for its products from tech giants such as Google, Meta, Microsoft, and Amazon.
They should also pay attention to the situation regarding chip supplies to China: how things are progressing, whether the company expects further restrictions, and what impact this could have.
In addition, it would be interesting to hear management talk about the ongoing U.S. antitrust investigation into possible abuse of Nvidia's position in the AI chip market.
Is it a good idea to buy a company’s stock before its earnings report?
Buying stocks just before an earnings report is risky. You could end up with significant gains or losses, so it's not the best approach for those who prefer a more cautious strategy.
If you're considering it, remember that Nvidia CEO Jensen Huang sold a record $323 million worth of stock in July and that the company's management has been dumping hundreds of millions of shares.
This doesn't guarantee a fall or imply insider knowledge, but it doesn't help the case either. In addition, Nvidia’s stock is expensive: right now, its P/E is about 74, while the company's total price is $3.2 trillion.
Finally, market sentiment typically shifts when the Fed changes its monetary policy. Based on Powell’s speech at the Jackson Hole Symposium, it might show a shift as early as September.
