NAS100 Sets Record Highs Ahead of Nvidia’s Earnings

  • NAS100
    (${instrument.percentChange}%)
  • NVDA.us
    (${instrument.percentChange}%)

NAS100 Analysis

The disinflation process has slowed down this year, causing the Fed to adopt a higher-for-longer stance, also supported by strong economy and robust labor market. Last week's CPI reading showed moderation though and markets moved to strengthen their bets that the central bank will cut rates twice this year, beginning in September.

NAS100 advances to new record highs and runs its best month of the year, looking towards the 19K mark. On the other hand, Fed officials continued their mostly hawkish remarks this week, showing they are concerned of persistent inflation. On the technical side, The RSI did not follow prices higher, in a divergence that creates risk of a pullback towards the EMA200 (18,050). Daily closes below it would pause the bullish bias, but that would need strong catalyst.

Markets have overlooked the cautious shift of the Fed, largely due to the AI boom that also drove last year's rally. All eyes are now on Wednesday's quarterly results of NVIDIA, the enabler and main beneficiary of the of the AI boom. Its stock gains more than 90% YTD, despite the recent pullback. After the last report in February, NVDA.us has surged more than 12%, pushing NAS100 higher as well, so there is scope for volatility.

The chip designer had then reported record top and bottom lines and an acceleration in revenue growth, to the tune of 265% y/y. This was a result of increased shipments of AI GPUs, which execs believe will continue. For the soon to be reported quarter, they forecast sales of $22 billion [1]. This would mark a slowdown, but would still be staggering increase of around 235% y/y. Investors will once again look closely to whether this relentless pace will continue or cracks will begin to appear.

Nikos Tzabouras

Senior Financial Editorial Writer

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 24 Jun 2024 https://investor.nvidia.com/financial-info/financial-reports/default.aspx

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