Equity Markets closed lower on Wednesday, but off troughs, with weakness led by the NASDAQ and semiconductor names ahead of Nvidia (NVDA) earnings after-hours. Also adding to the downside was the further slump in Super Micro (SMCI) after it delayed the release of its 10-K filing, seeing the stock tumble over 19%, adding on to the weakness this week after it was named a short at Hindenburg. Sectors were predominantly lower, with Tech, Consumer Discretionary, Communication and Energy the laggards, while only Financials and Health closed in the Green, with Utilities flat. Energy stocks tracked crude prices lower amid a lack of geopolitical escalation although there was some volume around the weekly inventory report, which saw a smaller crude draw than expected, while distillates posted a surprise build with gasoline stocks posting a larger draw. Gold and silver were soft while copper also took a hit. Elsewhere, the Dollar gained as risk sentiment soured while Treasuries meandered throughout the day, with morning strength being pared ahead of the 5 Year Auction, which was well received versus recent averages, but still tailed. For the second year in a row, Nvidia has been the world’s most important company, rising more than 150% YTD to a staggering $3.1 trillion market cap, massively outperforming the Nasdaq, and putting it within spitting distance of becoming the world’s largest company (it is currently #2 behind AAPL). And while the stock price gains have largely been driven by regular raises of the company’s forward earnings expectations. the question arises: how much more earnings growth is there? With whisper numbers at nosebleed levels relative to already euphoric guidance and estimates, it is no surprise why the options market is expecting a 10% swing after hours. A quick look at the past: the company’s second quarter wasn’t perfect – the company stopped short of completely denying reports that there are problems with its forthcoming Blackwell product lineup. Analyst reports have dismissed any issues as immaterial given the overall level of demand for existing products – the chip line called Hopper – but management will face questions on the topic. As a reminder, this is what Nvidia said earlier this month: “As we’ve stated before, Hopper demand is very strong, broad Blackwell sampling has started, and production is on track to ramp in the second half. Beyond that, we don’t comment on rumours.” And so, amid sky high expectations for the current quarter, even loftier expectations for the company’s guidance with questions about its main product line, here is what NVDA reported last night for the second quarter:
- Q2 Rev. $30.04B, up 122% YoY, beating estimates of $28.86B, and beating not only the upper end of the guidance ($27.44BN-$28.56BN) but also above the JPM whisper number of $29.85BN.
- Q2 Data Centre Revenue $26.3B, beating exp. $25.08B
- Q2 EPS $0.68, up 152% YoY, beating exp. $0.64
- Q2 Gross Margin 75.7%, up 4.5% YoY from 71.2, beating exp. 75.5%, but down from 78.9% in Q1. Peak margins?
The revenue trend, as expected, is impressive especially at the Data Centre level where all the growth is. While initially NVDA shares bounced on the big beat, the since dipped on the disappointing guidance, sliding as much as 6% after hours, and have since whiplashed by the results as the stock is still fighting for direction, swinging between gains and losses as traders digest the earnings. As a reminder, options markets had priced in a swing of 10% after hours, so for now the reaction is positive tame relative to expectations. Elsewhere, Oil fell 1.07% while a stronger Dollar saw Gold end Wednesday with a loss of 0.6%.
To mark my 3075th issue of TraderNoble Daily Commentary I am offering a special 2-Year rate of Euro 2750 for my Platinum Service which includes 1 monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoble.com for details
For anyone following my Platinum Service it made 145 points yesterday and is now down by 401 points for August after closing July with a gain of 1918 points while June closed with a gain of 2074 points, having made 1843 points in May. The Platinum Service made 4010 points in April after ending March with a gain of 2113 points. February closed with a gain of 1606 points, after closing January with a gain of 3675 points. December saw a gain of 1890 points after finishing November with a gain of 1734 points. October ended with a gain of 3184 after closing September with a small gain of 228 points, after finishing August with a gain of 1485 points, following a small gain of 285 points gain in July, after closing June with a gain of 2683 points. May closed with a gain of 3205 points. April saw a gain of 3354 points while March closed with a gain of 6168 points. The Platinum Service made a record 9619 points last October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1900 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.60% lower at a price of 5592.
The Dow Jones Industrial Average closed 159 points lower for a 0.39% lower at a price of 41,091.
The NASDAQ 100 closed 1.18% lower at a price of 19,350.
The Stoxx Europe 600 Index closed 0.16% higher.
This morning, the MSCI Asia Pacific closed 0.3% higher.
This morning, the Nikkei closed 0.1% lower at a price of 38,336.
Currencies
The Bloomberg Dollar Spot Index closed 0.56% higher.
The Euro closed 0.45% lower at $1.1114.
The British Pound closed 0.4% lower at 1.3184.
The Japanese Yen fell 0.4% closing at $144.70.
Bonds
Germany’s 10-year yield closed 3 basis points lower 2.26%.
Britain’s 10-year yield closed 1 basis points lower at 3.97%.
U.S.10 Year Treasury closed 1 basis points lower at 3.82%.
Commodities
West Texas Intermediate crude closed 1.07% lower at $74.72 a barrel.
Gold closed 0.6% lower at $2508 an ounce.
This morning on the Economic Front we have Euro-Zone Economic Indicator at 10.00 am and a speech from ECB Member Lane at 10.15 am. This is followed by German CPI at 1.00 pm. Next, we have U.S. Weekly Jobless Claims, GDP, Durable Goods Orders and the Trade Balance at 1.30 pm. Finally, we have Pending Home Sales at 3.00 pm and a Seven-Year Treasury Auction at 6.00 pm.
Cash S&P 500
The S&P has traded in a wide range over the past 24 hours as rumours of a weaker than expected earnings report from NVIDIA was front and centre for all of Wednesday’s price action. This move lower saw the S&P trade the whole of my buy range for a 5582 average long position before the market rallied off its 5561-evening low to hit my revised 5591 T/P level and I am now flat. Overnight, the S&P hit a low at 5544 before rallying to sit at 5580 as I go to post. The 14 EMA comes in a price of 5551 and so far, this level has held the post NVIDIA back-test. Attention should now focus on the key PCE Report tomorrow ahead of month-end and the seasonally strong post labour weekend U.S. Holiday. Binary outcomes are never comfortable but so far buying the dip against the 14 EMA support looks like a sensible plan ahead of the weekend. Therefore, I will be a buyer of the S&P from 5540/5556 with a tight 5525 ‘’Closing Stop’’. If I am stopped out of any long position the next major support for the S&P is from 5465/5495 where the 20, 30 and 50-day Moving Averages converge. If the market hits this range, I will be an aggressive buyer with a wider 5449 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 5573. If I am taken long a second time, I will have a T/P level at 5536. I no longer want to be short the S&P as seasonals are positive for the next week. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
One of the best Technical Indicators that I follow is the Daily Sentiment Indicator which was warning us of an impending move lower in the Euro. Yesterday, the Euro hit my 1.1110 T/P level on my latest 1.1120 average short position, and I am now flat. The Euro has further resistance from 1.1210/1.1280 where I will again be a seller with a higher 1.1365 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 1.1140. The Euro has short-term support from 1.0960/1.1040 where I will be a strong buyer with a 1.0895 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 1.1105.
Dollar Index
No Change. The Dollar has support from 99.90/100.60 where I will again be a buyer with the same 99.25 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 101.20.
Cash DAX
No Change: I am going to stay flat the DAX as I have no edge in this market at the moment. August has been the toughest month for my Platinum Service since I started writing my Daily Commentary over 11 years ago in February 2013. I will stay flat the DAX until I feel my edge has returned. If this view changes, I will be back with a new update for my Platinum Members.
Cash FTSE
No Change. I am still flat as the market again traded in a narrow range on Wednesday. The Prime Minister’s announcement that a tougher than expected U.K. Budget saw the FTSE underperform the rest of the market as Starmer indicated there will be upcoming tax hikes. The Seasonal Chart has the FTSE running into trouble over the coming weeks. The FTSE has resistance from 8430/8500 where I will be a seller with an 8565 tight ‘’Closing Stop’’. The FTSE has support from 8220/8290 where I will be a small buyer with a lower 8165 ‘’Closing Stop’’. If I am taken short, I will have a T./P level at 8380. If I am taken long, I will have a T/P level at 8340.
Dow Rolling Contract
It is extremely hard to be short the Dow with any conviction as all dips are bought. Having hit a low at 40850 late yesterday, the Dow rallied to close at 41100 last night and has tagged on a further 100 points this morning. The Dow has short-term resistance from 41750/42000 where I will continue to be a small seller with the same 42205 ‘’Closing Stop’’. As I am away next week my only interest in buying the Dow will be on any test of the 50-Day Average which comes in at 39980 this morning. This average will increase daily. Therefore, my buy level will be from 39800/40050 with a 39595 ‘’Closing Stop’’. If I am taken short, I will have a T/P level at 41455. If I am taken long, I will have a T/P level at 40330.
Cash NASDAQ 100
The NDX got hit hard yesterday falling over 500 points from its morning 19620 high print to its overnight low at 19080 before having a small rally to sit at 19280 this morning. Yesterday’s move lower saw the whole of my buy range triggered for a now 19310 average long position. The 50-Day Moving Average comes in at 19480 this morning and this level should attract selling on any tag. I will now lower my T/P level on this position to 19410. The 30-Day Moving Average for the NDX is at 19100 while the 100-day MA is slightly lower at 18900. Either of these levels been tested will see me try a long position with no stop for now. The ideal scenario is my T/P level is hit before a back test of the above supports next week. If any of the above levels are hit, I will be back with updated emails for my Platinum Members.
September BUND
My 133.75 long Bund position worked well as the market rose to my 134.20 T/P level and I am now flat. The Bund has support below from 131.50/132.30 where I will be a strong buyer with a 130.75 lower ‘’Closing Stop’’. I no longer want to be short the Bund at this time. If this view changes I will be back with a new update for my Platinum Members. If I am taken long, I will have a T/P level at 133.05.
Gold Rolling Contract
No Change: Gold continues to hold the 2500 support level. Seasonally September can be a difficult month for both Gold and Silver, hence my reluctance to chase the Gold market higher. Today I will continue to be a buyer on any dip lower to 2450/2465 with the same 2437 ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 2484.
Silver Rolling Contract
I am still flat. Silver has traded in a narrow range over the past 24 hours and I am still flat. Today, I will continue to be a buyer from 28.10/28.90 with the same 26.29 wider ‘’Closing Stop’’. If I am taken long, I will have a T/P level at 29.60.
Please Note: I am taking next week off to spend time with my family. However, any of my calls that are not hit today and are subsequently triggered when I am away will see me return with updated emails for my Platinum Members. My next Daily Commentary will be posted on Monday September 9.
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