Making sense of this crazy world
Nvidia still rules the roost
Markets were benign and almost in ‘pause mode’ at the start of the week in anticipation of the eagerly awaited earnings report from Nvidia. When the results were announced, despite a stellar return, Nvidia’s shares pulled back circa 3%, mainly due to challenges facing them in China. There was nothing, however, to spook markets, and it appears as though it’s business as usual. Nvidia’s share price has risen by 4.34% over the last five days.
The S&P 500 reached another all-time high on the back of strong data emanating from the US. However, market sentiment was tempered by concerns that inflation may be elevated, and interest rates may not fall as quickly. The usual conundrum where good news can be interpreted as bad news and vice versa.
Despite the news flow being dominated by the US and its challenges, it’s the UK and Europe which are up against it politically and economically when it comes to investor confidence. The French government is on the verge of collapse, whilst in the UK, a rise in gilt yields has left government borrowing costs close to the highest in 25 years.
If bonds aren’t in vogue, equities certainly are, led by the AI universe.
This week’s content:
- Nvidia surges again
- The US economy is looking better than expected
- The equity outlook still looks positive
- UK at odds with European inflation
- UK long-term borrowing costs near the highest this century
- Is there any silver lining for the UK?
- It could be worse; we could live in France!
- Performance of the main equity market indices over the last month
- Summary
Nvidia surges again
Nvidia reported revenue for the second quarter of $46.7 billion, up 6% from the previous quarter and up 56% from a year ago. Some results!
The figures didn’t include any shipments to China of its H20 chips due to recent export restrictions. It was this news, along with a small miss on revenues in their data centre division, which was blamed for the initial pull-back in the share price.
The US economy is looking better than expected
This week, the S&P 500 again reached an all-time high on the back of strong economic data, which showed the US economy expanded faster than estimated.
The index was helped by technology stocks such as Nvidia, followed by the likes of Dell Technologies, which shared a positive outlook.
Technology stocks aside, it was encouraging to see consumer spending driving markets forward, casting aside concerns about a US recession.
Continues…
Want to get this in your inbox?
Our CEO, Gary Neild, writes engaging Market Commentaries every week. If you would like to receive the full version straight to your inbox every Friday, please join our communications list.
Risk warning
Please Note: This communication should not be read as giving specific advice regarding your personal circumstances. This would only be given following detailed assessment of your individual needs. The value of investments may fall as well as rise; you may get back less than invested. Past performance is not necessarily a guide to future returns.