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US futures rise after Dow closes above 40,000 for first time
US stocks rose on Monday after the Dow closed above 40,000 for the first time as copper prices and Nvidia (NVDA) profits appeared on the horizon.
S&P 500 (ES=F) futures rose 0.1%, while the Dow Jones Industrial Average (YM=F) remained largely stable following the blue-chip benchmark index’s all-time high. Contracts on the tech-heavy Nasdaq 100 (QN=F) rose 0.2%.
Stocks rose as investors became more optimistic that the Federal Reserve will soon cut interest rates, despite words from legislators’ caution. All three main gauges closed at record highs on Friday, as risk appetite increased and Wall Street strategists painted a bullish picture for stocks.
A key question for investors is whether this outlook is sustainable or preempts the direction the Fed is taking. Appearances on Monday by Christopher Waller, Philip Jefferson and other officials could shed light on the debate. But the first test comes on Wednesday, with the release of the minutes of the Fed’s May meeting, according to Yahoo Finance Josh Schafer reports.
See more information: How does the job market affect inflation?
The market is also gearing up for Nvidia’s much-anticipated quarterly results on Wednesday, seen as a main catalyst for stock rally. Expectations for the AI chipmaker’s earnings and revenue are sky-high – for growth of 400% and 240%, respectively – and the focus is on whether it will be able to live up to the hype again.
At the same time, recoveries in commodity markets are fueling fears of a sudden rise in US inflation. LME copper prices exceeded US$ 11 thousand per ton for the first time, reaching an all-time high as looming supply shortages attract investors. Meanwhile, gold prices (GC=F) jumped to tap an intraday record for about $2,450 an ounce.
Live updates3
- Monday, May 20, 2024 at 12:31 GMT+2
Watching Dr.
If the economy is primed for a pre-election slowdown, we are not seeing it in industrial copper metal.
Copper prices have reached record levels.
Rio Tinto copper piece (RIVER) aiming for the maximum in one year.
An analysis of copper prices over the past five years shows record highs. (Yahoo Finance)
Nvidia’s expectations are super high
We woke up today to find Nvidia (NVDA) While the third trend ticker on the Yahoo Finance platform ahead of its earnings report on Wednesday.
Clearly, the retail investor community is gearing up for another day of impressive earnings (results + guidance) from the AI darling.
An important point, however, from Bank of America Vivek Arya this morning: Nvidia’s great may not be enough.
Says Arya:
“Based on the bullish investors we spoke with, expectations appear well above consensus estimates as usual, with $26 billion in sales expected for the reported fiscal first quarter (April), or 6% ahead of the consensus for $24.6 billion, with guidance expected to be close to $28 billion or 5% ahead of $26.7 billion. Second, gross margins are expected to peak at $24.6 billion. 77% in the first fiscal quarter, with well-expected prospects for a decline to 75%-76% in the second fiscal quarter (normalization after some factors have raised it above 75% in recent quarters). If Nvidia were to meet these optimistic expectations, the stock could still react unfavorably as bears will likely complain that: 1) Nvidia’s sequential sales growth will slow to “just” 7%-8% quarter over quarter in the fiscal Q2 outlook ( July), well below mid-teens or better in recent quarters, 2) Gross margin is peaking and the decline is a sign of pricing pressure, unfavorable mix (more H20 shipments from China and/or more units of inference) and slowdown in demand/flexibility in supply.”
Nvidia Memories
Deutsche Bank strategist Jim Reid with a moment of reflection before Nvidia (NVDA) followed the earnings report closely on Wednesday:
“Remember that last year the AI frenzy started around Nvidia earnings time, where the company rose more than 20% on earnings day and has now tripled in value in 12 months.”
Nvidia shares are up 197% since its May 24, 2023 earnings report.
