Nasdaq 100 Forecast: QQQ looks cautiously to Nvidia earnings
US stocks are set for a muted open as investors sit on the sidelines ahead of Nvidia's earnings. The chip maker will test the market's enthusiasm for the AI trade, with revenue and profits set to double across the year. Strong numbers and guidance could boost risk sentiment as well as demand for all things AI.
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US futures
Dow future -0.02% at 41244
S&P futures -0.05% at 5622
Nasdaq futures -0.14% at 19550
In Europe
FTSE -0.24% at 8329
Dax 0.57% at 18800
- Traders sit on the sidelines ahead of NVDA earnings
- NVDA expected to see profits & revenue double y/y
- Oil falls for a second day
Nvidia results to test AI enthusiasm of AI trade
U.S. stocks are unchanged on Wednesday as investors remain on the sidelines ahead of earnings from Nvidia after the close, which could shed more light on enthusiasm for the AI trade.
The results come amid a rotation out of tech stocks this week amid growing expectations that the Federal Reserve will cut interest rates in September, supporting flows into more economically sensitive sectors of the market and helping the Dow Jones reach record highs. Meanwhile, the S&P500 trades modestly lower across the week so far, although still close to the record high.
The US economic calendar is quiet today. Attention is firmly focused on tomorrow's GDP and jobless data and core PCE, the Fed's preferred gauge for inflation, which is due later this week.
Corporate news
Nvidia is in focus ahead of earnings and is expected to post earnings of $0.64 on revenue of $28.68 billion, both more than doubling from the previous quarter. The share price has traded up 160% so far in 2024, benefiting greatly from the firm's rising investment in AI. However, the earnings come following other major tech reports that have suggested that AI may not be the big driver that it was initially expected to be, at least not yet.
Apple is edging higher after reports that the tech giant has cut 100 jobs in its digital services group amid shifting priorities. The news comes after long-standing chief financial officer Luca Maestri announced he will be stepping down.
Abercrombie and Fitch has raised its forecast for annual sales after revenue rose 21% following the revamping of its offering and new styles to attract fashion-savvy shoppers. Shares are inching higher after the results and trade up almost 90% so far this year. Net sales are expected to rise between 12% to 13% for fiscal 2024.
Nasdaq 100 forecast – technical analysis.
The Nasdaq has recovered from the 17.2k August low before running into resistance just below 20k. The price has eased lower and is consolidating at 19.5k the 50 SMA. Buyers will need to rise above 19.7k the falling trendline resistance and 20k to extend the recovery further. Sellers will look to take out the 50 SMA to extend losses towards 19k, the round number, and rising trendline support..
FX markets – USD rises, GBP/USD falls
The USD is recovering from a 13-month low. The US dollar had fallen sharply in recent sessions on expectations that the Fed would start cutting interest rates next month. The markets are pricing 100 basis points worth of rate cuts before the end of the year.
EUR/USD is falling amid a quiet economic calendar leaving the stronger dollar in charge and driving the pair. Recent German data has highlighted concerns over the economic growth outlook in the the eurozone’s largest economy. Worries over the slowdown could encourage the ECB to cut rates in the September meeting.
GBP/USD is pulling back after rising sharply to a fresh two-year high yesterday. The pound is supported by the view that the Bank of England will keep interest rates restrictive for longer despite cutting interest rates in the August meeting.
Oil falls for a second day
Oil prices holding steady the investor's weigh up political tensions and lackluster demand.
On the one hand, oil prices had risen 7% in just three days on supply worries as concerns grew that tensions in the Middle East could broaden to include Iran-backed Hezbollah. News of the Libyan oil field production halts owing to a clash between government fractions, the central bank, and oil revenues also lifted prices.
However, oil is now falling for a second day, unwinding some of those oil supply concerns and after oil inventories declined by more than expected.
Attention now turns to EIA oil inventories due shortly.
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