Nvidia is on investors’ minds as an eventful summer comes to a close. The big market catalyst to cap a remarkable month will be the artificial intelligence chipmaker’s earnings results next week, not Federal Reserve Chair Jerome Powell’s speech at Jackson Hole, according to Bank of America. Nvidia reports next Wednesday, Aug. 28, while Powell speaks Friday, Aug. 23. That is partly because it is hard for Powell to be more dovish than the market, which is already pricing in the likelihood rates will drop a full percentage point in 2024. The central bank in June projected just one quarter-percentage-point rate cut for the balance of the year. Stocks were rising Monday in part on optimism that Powell will signal a rate cut is imminent. But the S & P 500 historically has not made major moves around the Jackson Hole symposium, which draws central bankers and economists to discuss the major economic issues of the day. Since 2010, the broader index on a median basis has posted a 0.80 percentage-point weekly gain. “With rate cuts already priced into the market, upside on even a dovish Jackson Hole speech is likely limited as the market awaits NVDA earnings the following week for a better sign on the state on economic growth,” Ohsung Kwon, equity and quant strategist at the firm, wrote Sunday. NVDA 1M mountain Nvidia Nvidia’s earnings results should instead serve as the next big catalyst for the AI bellwether, as well as the broader market, especially as investors pay more attention to growth than they do inflation. “Growth is in the driver’s seat. While the Fed is unlikely to ‘out-dove’ the market at Jackson Hole, as long as growth is OK, equites can withstand a less-dovish Fed,” Kwon wrote. “Equities just need a nod that growth is going to be supported by the Fed.” “While we think the risk could be to the upside, the magnitude may be capped heading into NVDA earnings the following week,” Kwon added. Nvidia shares may be up more than 150% this year, but it has underperformed this month — up just 5% — following the massive tech rout earlier this month. Since then, however, investors have been piling back into the stock, still optimistic on the stock’s long-term prospects. As of Friday’s close, Nvidia is up more than 37% from its Aug. 5 intraday low. JPMorgan found that retail investors, in particular, have been buying the dip . Nvidia shares were last up 2% Monday.
Nvidia earnings — not Powell’s speech — will be the big catalyst to end summer, Bank of America says
Aug 20, 2024
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