Hello traders, and welcome to Thursday! We're still digesting the highly anticipated earnings report from NVIDIA released yesterday. As many expected, NVIDIA outperformed expectations with higher-than-anticipated EPS and revenue. However, despite this impressive performance, NVIDIA shares dropped by 7% in after-hours trading. The main reason for this decline? Investor expectations were sky-high, far exceeding the strong results NVIDIA delivered. This is a classic example of a "buy the rumor, sell the news" scenario, reflecting NVIDIA's status as a highly speculative stock.
Given this reaction, we may see a bearish correction for NVIDIA over the next few days. This sentiment has also impacted the broader market, with futures for major indices showing signs of a correction after yesterday's drop. While there is some attempt to recover today, the NVIDIA earnings report could act as a catalyst for a broader bearish correction across indices. Thus, the outlook for indices is slightly bearish at the moment.
In the commodities market, there isn't a clear directional trend. Oil is trading sideways, as are precious metals like gold and silver. The lack of strong moves in commodities reflects the current uncertainty in the broader market environment.
Turning to the currency market, today’s key data releases include German inflation figures, U.S. GDP, and U.S. unemployment claims. These numbers could provide further direction for the forex market. Among currencies, the New Zealand Dollar stands out as the strongest performer today, buoyed by a surge in business confidence, which rose by 23 points to +51 in August, the highest level in a decade. This optimism is providing strong support for the Kiwi. Meanwhile, the Japanese Yen and the U.S. Dollar are both experiencing corrections and are moving lower today.
That’s the current market sentiment on Thursday, following NVIDIA’s earnings. Despite the after-hours dip in NVIDIA, the market hasn’t faced any major disruptions, but caution remains the order of the day.