(Bloomberg) — With Nvidia Corp.’s earnings report just a day away and a flurry of U.S. economic data expected later in the week, markets were slow to move Tuesday.
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U.S. stock futures and the dollar were little changed, while Treasury yields rose slightly. The stakes are high for Nvidia, especially after an earnings season that left other “Magnificent Seven” megacaps underwhelming. Upcoming reports on U.S. economic growth, prices, personal spending and jobs are adding to the wait-and-see mood.
Nvidia’s heft, which has the second-largest weighting in the S&P 500 after Apple Inc., and its lofty valuation mean it’s susceptible to big swings that could resonate broadly. Options market prices show traders see the potential for a nearly 10% move in either direction after earnings, which would equate to about 160 points in the Nasdaq 100 Index, or a 0.8% move, according to data compiled by Bloomberg.
Nvidia’s “numbers will be good, but what matters is the guidance to understand if the demand is still healthy,” said Alberto Tocchio, a portfolio manager at Kairos Partners. “If we get bad news, the rotation will be even stronger because the market is still very heavy on the mega-cap.”
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Among individual stocks in U.S. premarket trading, Paramount Global fell after a takeover bid for CBS parent company ended. The Hersey Co. fell after Citigroup Inc. downgraded the stock to sell from neutral. JD.com Inc.’s depository receipts rose after the Chinese online retailer announced a $5 billion share buyback.
Investors are hoping the bull market will extend out of big tech after Fed Chair Jerome Powell indicated Friday that the central bank will soon cut interest rates. Other policymakers echoed his dovish tone: Fed Bank of San Francisco President Mary Daly said it was appropriate to start cutting rates, while her Richmond colleague Thomas Barkin said he still saw upside risks to inflation even as he supported the “taper” policy.
Economists expect the personal consumption expenditures price index excluding food and energy — the Fed’s preferred measure of underlying inflation — to rise for a second month in July, by 0.2%. That would bring the quarterly annualized rate of so-called core inflation down to 2.1%, a fraction above the central bank’s 2% target.
“Of course, the central bank will emphasize that it has not yet made a decision and wrap that up in the words ‘data-dependent,’” said Volkmar Baur, a strategist at Commerzbank AG. “But 95 percent of what it needs to know for its September meeting should already be available.”
Meanwhile, Europe’s Stoxx 600 Index rose modestly, led by mining companies and automakers. Trading volumes were low, with activity on most European benchmarks around three-quarters of their average level over the past 30 days.
Ryanair Plc led gains in European airline and travel shares after CEO Michael O’Leary said an easing of tariffs between April and June had leveled off. Bunzl Plc shares rose after the distribution group raised its full-year profit forecast. Banco Santander SA rose after it announced a buyback of as much as €1.5 billion ($1.7 billion).
Important events this week:
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US Conference Board Consumer Confidence, Tuesday
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Nvidia Earnings, Wednesday
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Fed’s Raphael Bostic and Christopher Waller to speak Wednesday
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Eurozone consumer confidence, Thursday
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US GDP, Initial Jobless Claims, Thursday
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Fed’s Raphael Bostic to speak Thursday
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Japan unemployment, Tokyo CPI, industrial production, retail sales, Friday
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Eurozone CPI, unemployment, Friday
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US Personal Income, Spending, PCE; Consumer Confidence, Friday
Some of the major moves in the markets:
Shares
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S&P 500 futures were down 0.1% at 8:29 a.m. New York time
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Nasdaq 100 futures fell 0.1%
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Futures on the Dow Jones Industrial Average fell 0.1%
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The Stoxx Europe 600 rose 0.2%
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The MSCI World Index was barely changed
Currencies
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The Bloomberg Dollar Spot Index was little changed
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The euro remained virtually unchanged at $1.1155
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The British pound rose 0.2% to $1.3209
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The Japanese yen remained virtually unchanged at 144.57 per dollar
Cryptocurrency
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Bitcoin fell 1.8% to $62,324.69
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Ether fell 2.5% to $2,623.14
Bonds
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The yield on 10-year government bonds rose four basis points to 3.85%
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The German 10-year yield rose four basis points to 2.29%
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The UK 10-year yield rose 10 basis points to 4.01%
Raw materials
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West Texas Intermediate crude oil fell 0.6% to $76.92 a barrel
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Spot gold fell 0.3% to $2,511.21 an ounce
This story was produced with the help of Bloomberg Automation.
–With assistance from Jan-Patrick Barnert and Tugce Ozsoy.
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