Chief Investment Strategist
Summary: S&P 500 futures are breaking below key support levels and Hang Seng futures are making new lows for the year as Evergrande's bankruptcy protection filing in the US has sparked more nervousness over developments in Chinese markets. We highlight all the key events shaping markets heading into the weekend. We also discuss Nvidia's earnings next week which will be a key test for AI stocks and then finally we discuss the sudden collapse in Adyen.
Key tests across many markets into the weekend
Risk-off continues into the weekend across markets and below are the key events shaping markets.
Next week’s earnings from Nvidia will be a key test for markets and especially the cluster of AI related stocks that have rallied significantly this year. Nvidia reports FY24 Q2 (ending 31 July) earnings on Wednesday after the US market close with analysts expecting revenue of $11bn up 65% y/y and EBITDA of $6.3bn up from $924mn a year ago as demand for AI research and deployment has exploded since the successful launch of OpenAI’s ChatGPT. As we have highlighted in several notes it looks like it is especially Chinese technology companies that are driving the demand bonanza because China has realized that the country is behind on AI and has instructed their technology companies to catch up quickly. In fear of the Biden administration making further export restrictions Chinese technology companies are right now hoarding modified GPUs from Nvidia. So the key test is whether Nvidia is maintaining its fiscal year outlook or demand is already cooling after the initial splurge.
The other earnings releases next week are highlighted below.
Nobody had seen it coming. Adyen was heralded as a leader in the payments industry with solid growth but yesterday’s shocking earnings release showed a significant miss on volume and EBITDA due to significant cost pressures and too much hiring in its North America business. Adyen shares are down 2.5% today adding to the 39% decline yesterday as the company’s long-term operating margin guidance has come into question over increased competition. The problem for shareholders is now to find out what is the long-term growth and more importantly margin. Compared to other payment stocks Adyen is still valued at a premium and thus there is still downside risk to the stock.
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Commodity Strategy
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Chief Investment Strategist
Quarterly Outlook
Head of Fixed Income Strategy
Quarterly Outlook
Head of Commodity Strategy
Disclaimer
The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.
Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)