Market Outlook with Tom Westbrook

A look at the day ahead in European and global markets from Tom Westbrook.

Nvidia’s Earnings Report

Nvidia (NASDAQ:NVDA) is captivating the investment world ahead of an earnings report today. Even with expected second-quarter revenue doubling, investors are wary of a market-moving performance.

The chipmaker’s market value was around $390 billion on the eve of the AI chatbot launch, ChatGPT, less than two years ago. Now, it stands at nearly $3.2 trillion. In June, it briefly became the most valuable company globally, fueled by chips essential for the AI boom.

Due to its sheer size and status as an industry bellwether, Nvidia’s earnings, expected post-U.S. market close on Wednesday, could potentially impact the entire market.

Market Movement and Expectations

Asian trade was light with modest moves before the earnings report, and European equity futures showed little change. Europe’s data calendar is mostly empty, with Eurozone broad money growth predicted to rise to 2.7%, shifting focus to Nvidia’s results and upcoming U.S. and European inflation figures.

Options pricing indicates traders are prepared for a near 10% swing in Nvidia’s shares come Thursday, representing over $300 billion in market value—likely the largest earnings report-related movement ever, surpassing the market capitalization of 95% of S&P 500 companies. This could also disrupt the global semiconductor industry.

Other Market Highlights

Meanwhile, the British pound is near a 2.5-year high, benefiting from a weaker dollar. Traders expect about 100 basis points of U.S. rate cuts this year, while Britain looks at just 40 basis points.

As Nvidia takes center stage, fans of Oasis, who signed their first record deal shortly after Nvidia was founded, will compete for hotel rooms in Manchester due to announced reunion shows next year.

Key Developments to Watch on Wednesday:

• Earnings: Nvidia
• Economics: Eurozone M3 growth, French unemployment

(By Tom Westbrook; Editing by Edmund Klamann)