Nvidia fails to lift markets, dollar stands tall

Nvidia can’t satisfy lofty expectations

Equity markets continue to trade with lackluster momentum, struggling for direction even after AI giant, Nvidia, announced outstanding third quarter earnings. Nvidia beat both its earnings per share and revenue estimates, as well as the forecasts for the current quarter.

However, the year-on-year increase for the quarter reported and the Q4 projection marks a shift in growth from the triple digits to the double digits, signaling slower earnings expansion going forward. Nvidia’s stock fell by around 2.5% in after-hours trading and US futures are slightly in the red after a flat close for the S&P 500 on Wednesday.

Alphabet shares were surprisingly steady despite the US Justice Department filing a request to a federal court for the company to sell its Chrome browser. Investors likely see this as not being as damaging to Alphabet as being forced to divest its entire advertising unit to reduce its monopoly in the sector.

December rate cut doubt hurts sentiment

Nevertheless, Wall Street is badly in need of a fresh catalyst to drive stocks forward amid the growing prospect of the Federal Reserve skipping a rate cut at its December policy meeting. Fed officials this week have remained uncommitted to a December cut even as they maintain confidence about inflation staying within a downward trajectory.

The probability for a 25-bps reduction in December has fallen closer to 50% in recent days from around 60%. More Fedspeak is on the way today, with Goolsbee, Barr and Hammack on the agenda. Investors will also be watching the latest weekly jobless claims before attention turns to tomorrow’s flash PMI readings for November.

Dollar holds firm, yen jumps on Ueda comment

The US dollar was steady on Thursday, holding onto yesterday’s gains against most currencies, even though Treasury yields slipped slightly. The Japanese yen was one exception as it rallied on comments made by Bank of Japan Governor Kazuo Ueda earlier today.

Ueda seemingly kept his options open for the December meeting, not ruling out a rate hike, while suggesting that policymakers do assess the impact of the exchange rate on inflation in their decisions.

The dollar slid to just above the 154-yen level before rebounding slightly. October CPI numbers out of Japan will come under the spotlight at 23:30 GMT.

Gold climbs again, oil up on OPEC+ speculation

Gold looked to stretch its gains to a fourth day, climbing to a 10-day high of $2.671.49 amid an escalation in tensions between Moscow, Kyiv and the West. The decision by President Biden to allow Ukraine to fire long-range missiles inside Russia as well as supply the country with anti-personnel mines is unlikely to go without a response by Moscow.

As markets wait for some kind of a retaliation, gold will likely continue to generate significant safe-haven demand.  

Oil prices have not benefited much from the heightened geopolitical risks, but futures are rising today on reports that OPEC+ might further delay a decision to begin easing its output restrictions.

Bitcoin approaches $100,000

Meanwhile, Bitcoin’s post-election surge showed no sign of abating, breaking above the $97,000 level for the first time today and coming within sight of $98,000.

Other cryptocurrencies have not been in such a buoyant mood this week. Investors probably see the boost to Bitcoin from a friendlier regulatory environment by the incoming Trump administration as much more of a sure thing than for its rivals.