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📊 Market Turning Point

📊 Market Turning Point

Ticker Tea
February 19, 2024

Equity and bond markets are closed today in observance of President’s Day.

Despite the short week & overall light calendar ahead, there’s one standout event that could make or break the recent euphoria in the markets.

NVIDIA is releasing earnings this Wednesday. Analysts estimate NVIDIA made $4.59 EPS, which is a 422% increase from last year, and had sales of $20.37 billion, up 237% (Factset). This would mark the third time in a row that NVIDIA has seen its sales and earnings more than double.

If NVIDIA's earnings or forward guidance show any signs of weakness, it could lead to strong negative reactions among AI and big tech companies, as the market has priced in unprecedented growth assumptions. Read the full blog post here 👉 blog.

» Earnings Today: None (Calendar & Estimates 👇)

» Economic Data Today: None (Calendar & Estimates 👇)

» Fed Speakers Tomorrow: Bowman and Bostic

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» Corporate America is strategically lowering earnings expectations amidst a backdrop of economic uncertainties and high stock valuations. Despite a notable 7% YoY earnings growth for the S&P 500 ($SPX), only 40% of firms have issued optimistic guidance, the lowest since April 2020. This cautious approach, influenced by geopolitical and economic risks, aims to mitigate the repercussions of overpromising, as companies like Deere ($DE) and DoorDash Inc. ($DASH) adjust their forecasts below analyst expectations. (blog)

» In 2024, companies across various sectors, including Nike ($NKE), Mattel ($MAT), PayPal ($PYPL), and Cisco ($CSCO), are prioritizing cost reduction strategies, signaling a shift in corporate America's response to inflation and changing consumer demand. Despite some being profitable, firms are undertaking layoffs, reducing expenses, and adjusting operations to demonstrate fiscal responsibility to Wall Street and adapt to a post-pandemic economic landscape. (blog)

» Goldman Sachs ($GS) has updated its S&P 500 Index ($SPX) target to $5,200, marking a second revision upwards this year due to higher profit estimates. Initially setting a target of $4,700, the firm's latest forecast represents a nearly 4% increase from current levels, positioning Goldman among the most optimistic Wall Street firms for the year-end outlook. (blog)

» Mom-and-pop investors are cautiously re-entering the cryptocurrency market, as evidenced by significant increases in trading volumes on platforms like Coinbase ($COIN) and Robinhood ($HOOD), though retail activity remains below the levels seen in the last crypto bull market. The resurgence is spurred by the launch of ETFs investing in Bitcoin and the anticipation of the Bitcoin halving event, despite the volatility and past losses experienced in 2022. (blog)

» The ongoing war in the Middle East and disruptions in Red Sea shipping are emerging as significant risks to the US stock market's record rally, as indicated by a Bloomberg analysis of earnings calls. With crude prices climbing and supply chain costs increasing, these geopolitical tensions could revive inflation concerns and negatively impact corporate earnings, posing a challenge to the optimistic profit expectations for S&P 500 ($SPX) companies. (blog)

» Nvidia ($NVDA) forthcoming earnings report is spotlighted as a critical juncture for the current momentum driving U.S. stock indices to record highs, amid a surge in bullish option bets on the company. Analysts caution that the outcome could reverse the market's recent gains, as the options market dynamics and speculative trading behaviors face a test, regardless of Nvidia's performance. (blog)