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Quiver Morning Markets Wrap

Published 02/20/2024, 11:23 AM
Updated 02/20/2024, 11:30 AM
© Reuters.  Quiver Morning Markets Wrap

Quiver Quantitative - In the lead-up to Nvidia (NASDAQ:NVDA) eagerly anticipated earnings announcement, big tech stocks, including Nvidia, have experienced a downturn. This slide comes amidst high expectations set by the artificial-intelligence boom, with Wall Street keenly awaiting Nvidia's results as a bellwether for the tech industry. Despite an overall positive earnings season, the "Magnificent Seven" megacaps have had a mixed performance, leading to a cautious stance among traders. Nvidia, which has seen its value more than triple in 2023, faces high expectations, particularly in its data center business, buoyed by soaring demand and its collaboration with major tech players like Meta Platforms Inc (NASDAQ:META). and Tesla (NASDAQ:TSLA) Inc.

The technology sector's recent performance indicates heightened anticipation and uncertainty. Nvidia’s stock dipped about 6% ahead of its results, contributing to a nearly 1.5% fall in the Nasdaq 100 (QQQ) and pulling the S&P 500 (SPY) below 5,000. Meanwhile, Walmart (NYSE:WMT) Inc. bucked the trend by rallying after reporting strong earnings and announcing a deal to acquire TV maker Vizio. In the bond market, Treasury 10-year yields declined to 4.25%, and the dollar retreated, reflecting broader market dynamics and investor sentiment.

Market Overview: -Big tech declines: Nasdaq down 1.4%, S&P 500 down 0.7%, Dow (DIA) flat. -Nvidia earnings anticipated: Crucial for confirming AI boom expectations. -Mixed earnings season: Some megacaps beat, others disappoint. -Economic data awaited: Fed minutes, PMI reports, jobless claims.

Key Points: -High expectations for Nvidia earnings after strong chipmaker performance. -Walmart (WMT) rallies on strong earnings and Vizio acquisition. -Home Depot (HD) struggles with declining home improvement demand. -Capital One (COF) and Discover (DFS) to merge, creating largest US credit card company. -Bayer slashes dividend due to debt and litigation burden.

Looking Ahead: -Eurozone consumer confidence, Nvidia earnings, Fed minutes on Wednesday. -Eurozone PMI data, US economic data, ECB meeting account on Thursday. -China property prices, Germany IFO data, ECB inflation expectations on Friday. -Potential profit-taking after strong February performance.

Corporate activity continues to reshape the market landscape. Notable developments include Walmart’s agreement to buy Vizio Holding Corp. for $2.3 billion, Macy’s (M) receiving board nominations from activist investor Arkhouse Management, and the Biden administration’s plans to provide substantial subsidies to Intel Corp (NASDAQ:INTC). and GlobalFoundries (NASDAQ:GFS) Inc. to bolster U.S. semiconductor manufacturing. Additionally, Capital One's $35 billion all-stock deal to acquire Discover Financial Services (NYSE:DFS) marks a significant move in the credit card industry.

This week is poised to be pivotal for the markets, with Nvidia's results and a raft of Federal Reserve speakers on the agenda, alongside key economic indicators and corporate earnings announcements. The outcomes of these events will likely influence investor sentiment and market trends, shaping the trajectory for tech stocks and the broader financial landscape in the weeks ahead.

This article was originally published on Quiver Quantitative

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