So, Are We on the Fence for Nvidia?
We all sat tight for Nvidia’s earnings, expecting fireworks. Turns out it was more like a hint of fireworks—not a full-blown show. The numbers were solid, traders spotted a few snags in China and data‑center numbers, shares dipped a smidge (mostly because options expired, not due to real market shift), and the broad market swung to a new high as US GDP outperformed expectations. Recession worries? Gone. What’s the fuss then?
The Size of the AI Scene
AI is still going full steam ahead; there’s no time to roll back the wagon. September’s usually a slow‑poker for US stocks, but the economy is gaining steam and an interest‑rate cut is on the horizon. What could go wrong?
UK & European Movers
At the open, the FTSE 100 dropped just a smidge, and it’s now eyeing 9,200 again after nearly breaching 9,300. The pound is trading lower against the dollar—kicking back from the 1.35 mark—while the softer domestic banks are dragging on the blue chips. The DAX and CAC also slipped modestly; China kept its August run strong, but Japan fell a bit on weak economic data.
US Inflation Forest Trail
Today we’re eyeing U.S. inflation data that could change the game if it surprises to the upside. Anything in line will keep the market firmly betting on a rate cut next month. Fed Governor Waller, who’s eyeing the chair, says he’s not a fan of freezes and prefers cuts. The dollar has slipped 2% in August, and a backdrop of policy changes (like Lisa Cook’s ousting) has stirred speculation. The USD has rebounded a bit today, putting pressure on the euro and sterling.
U.S. GDP Snapshot
- Q2 GDP rose +3.3% YoY – a bump on the prior advanced reading (+3%) and beating averages.
- Home sales and unemployment claims fell.
This is the headline for the Fed as next week rolls in nonfarm payrolls. Hiring may slow, but the labor supply is still shrinking.
Personal‑Consumption Expenditures (PCE) – The Fed’s Sweet Spot
Today’s key data is the US PCE inflation report. The core index, Fed’s preferred barometer, is projected to climb 0.3% in July, pushing the annual rate to 2.9%—the highest since February. If it hits 3%, that’s the best since March 2024. A hotter print could stir the market and reduce the chances of a September cut. Earlier this month, PPI inflation was the hottest in three years, and crucially, services inflation is climbing—so it’s no longer just about tariffs.
Import Duty Changes – A Subtle Price Shift
Today, the U.S. ended duty‑free imports for packages under $800—the “de minimis” exemption that fed brands like Shein and Temu. This means higher consumer prices for certain goods, though the impact will take a little time to show.
Stocks
Market Snapshots: Banks, Tesla, Nvidia & More
UK Banking – A Little Chill in the After‑Hours
Britain’s top banks have slipped in the latest trading session:
- NatWest -3.7%
- Lloyds -2.84%
- Barclays -2.2%
- HSBC -0.75%
Why the drop? Reports claim the Chancellor is planning a “thatcher‑style tax on bank windfalls” to shore up the budget – and let’s face it, the think‑tank IPPR has said it’s high time your banks paid their fair share. With the banks already having delivered solid profits and seeing their FTSE‑350 shares flat in the last three years, the prospect of a hard‑hit levy is creating a bit of market moodiness. If banks can’t expand credit, does that really line up with a pro‑growth agenda? That’s the million‑pound question now.
Tesla – Up-Down‑Up‑Down
After prying out of the “triangle” (that’s just the fancy way of saying “evaporation of stock clustering”), Tesla’s stock has pushed up to June highs near $357, flirting with $367. However, yesterday it slipped 1% as European sales slumped 40% last month. Investors are watching closely to see if momentum holds or if sales slumps will bite the upside.
Nvidia – Street’s Sweet Spot
Despite trader disappointment, sentiment is buzzing as analysts raise target prices in a flurry of optimism:
- Bank of America: $235 from $220
- KeyBanc: $230 from $215
- Truist: $228 from $210
- Bernstein: $225 from $185
- Benchmark: $220 from $190
- JPMorgan: $215 from $170
However the bright side has a dark curtain hanging over it: concentration risk. Two customers account for 39% of Nvidia’s revenue. If their spending dries up or if the chip war gets hotter, the company’s profits could take a hit. The situation is a stark reminder that a single big partner can make a tech giant wide open.
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