Key Takeaways
- Markets Await Nvidia Earnings Amid Four-Day Losing Streak In Major Indices
- Lowe’s And GM Stocks Surge On Strong Sales And Buyback Announcement
- Investors Focus On AI Spending And Fed’s Preferred Inflation Gauge This Week
The S&P 500 and Nasdaq Composite are in the midst of a four-day losing streak following losses on Tuesday of 0.5% and 1.3%, respectively. The Russell 2000 was down a fraction of a percent; however, the Dow Jones Industrial Average was the one index up on the day, gaining just under 0.5%. While the beginning of the week has felt slow, rest assured that will change starting today, after the close.
If there is one stock that continues to have a potential hold on the market, it’s Nvidia. The chipmaker is scheduled to report earnings after the close. Looking back at the last four quarters of earnings, the stock notched gains on the day after announcing three out of four times. The sole down day was this past November when the stock fell 1%. But in the three quarters prior, shares were up 3% in August, 2% in May and 16% last February. Now, prior performance is not something I rely on, but it is worth noting the stock has dropped 6% this year and is off almost 18% from its all-time intraday high set in January. That may make it attractive for many who have waited for a pullback to get long. Heading into earnings, the options market is implying a move of roughly $13 by Friday, which would mean a range of $113 – $139.
A few other stocks in the news this morning include Lowe’s. The big news here was that same store sales saw an increase for the first time in nearly two years. That stock is currently higher by 4% in premarket. Shares of General Motors are also up 4% in premarket. The automaker announced a $6 billion stock buyback program and plans to raise its dividend by 25%. Lastly, Alcoa’s CEO is warning that tariffs on the aluminum industry could result in the loss of 100-thousand U.S. jobs as a result of tariffs.
There is one economic report due out today, New Home Sales. I don’t think this report will garner much in terms of headlines, especially given so much focus on Nvidia. However, it’s a number that may help contextualize the overall economy. The bigger economic reports will come tomorrow and Friday. The most recent Durable Goods report is scheduled to come out before the open tomorrow, and then on Friday, the Personal Consumption Expenditures (PCE) report will be released. The PCE has been the report the Federal Reserve relies on most heavily for gauging inflation.
For today, all eyes will be looking toward Nvidia. I expect much of the chipmaker sector see some positioning ahead of the report. We have heard multiple times this quarter about companies planning greater and greater investment in Artificial Intelligence (AI) and it would make sense that Nvidia would be the beneficiary of at least some of that spending. Therefore, it’s not simply the last quarter results that matter, but forward-looking statements are arguably even more important. As always, I would stick with your investing plan and long-term objectives.
tastytrade, Inc. commentary for educational purposes only. This content is not, nor is intended to be, trading or investment advice or a recommendation that any investment product or strategy is suitable for any person.
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