Nvidia’s Record High Fuels Market Optimism
The euro maintained a more than two-month low as world stocks rebounded on Wednesday. Nvidia (NASDAQ: NVDA) witnessed a spectacular 8% rise in trading after the closing bell, hitting an all-time high after forecasting third-quarter revenue that surpassed Wall Street expectations.
Nvidia’s Q3 Forecast and Share Buyback Plan
Santa-Clara, California-based Nvidia forecasted third-quarter revenue of about $16 billion, with a 2% margin, and announced a $25 billion share buyback. Analyst expectations had pinned revenue forecasts at $12.61 billion.
US Stock Market’s Positive Response
Nvidia's optimistic outlook likely enhanced the stock markets on Thursday. The MSCI All Country stock index jumped 0.97%, and U.S. stocks also climbed across the board, with major indexes showing gains.
Euro and German Business Activity
The euro remained low against the dollar and hit a 12-month low against the pound. German and euro area business activity sharply declined in August, resulting in the fastest contraction in German business activity in over three years.
Yields and Interest Rate Speculation
Eurozone government bond yields and U.S. Treasury yields were down, easing tensions from a 16-year high touched earlier. Investors await Federal Reserve Chairman Jerome Powell's speech for clues about the U.S. interest rate outlook.
Expectations of Rate Cuts and Stock Gains
Richmond Fed President Thomas Barkin’s comments raised expectations of a hawkish message from Powell. However, some investors are betting on rate cuts next year, leading to stock gains.
European Share Index Lifts on Borrowing Costs
The perception that borrowing costs might be peaking helped raise the STOXX 600 European share index. Germany's government bond yield fell to its lowest in nearly two weeks.
Questions Around ECB and Bank of England Hikes
European currencies are underperforming due to weaker PMI data, leading to doubts about further interest rate hikes by the ECB and Bank of England.
Asian Market’s Focus on China and Japan
Asian markets had a mixed reaction, focusing on China's economy and the Japanese factory's continuous shrinking. Japan’s Nikkei rose 0.5% despite concerning data.
Bond Yields and Equity Markets in Asia
Japanese government bond yield hit a new peak, while in China, blue chips fell 1.3%. Iron ore prices hit a two-year high, and other commodities showed significant movement.
Dollar, Yen, and Global Commodity Prices
The U.S. dollar dipped, and the yen recovered slightly. Oil prices were lower, with Brent crude dropping 1.3%, and gold was higher at $1,916 per ounce, reflecting global commodity trends.