As Nvidia awaited, Treasuries absorb new deluge
A look at the day ahead in U.S. and global markets from Mike Dolan
Nvidia's post-bell earnings update on Wednesday is keeping stock markets everywhere in a holding pattern, while U.S. Treasury markets appear to be absorbing the latest torrent of debt sales quite comfortably.
The wait for the world's most dominant artificial intelligence chipmaker's earnings has sucked all the oxygen out of the early part of the week, so large now is the influence of the $3.1 trillion-valued firm on wider stock indexes.
Equity options traders are expecting Nvidia's NVDA.O report to spark a more than $300 billion swing in its shares over the day ahead. Pricing anticipates a stock move of almost 10% on Thursday - larger than the expected move ahead of any Nvidia report over the last three years.
The stock gained more than 1% on Tuesday and was marginally higher in out of hours trading early on Wednesday. S&P500 and Nasdaq futures Esc1, NQcv1 held steady.
The stakes are higher than ever, given the recent creeping doubts about AI overspend and the lack of end product so far for the new tech. Apple's planned announcement on Sept. 9 of a new iPhone with new AI functionality, however, may ease some of those concerns.
And it's a big earnings day more broadly for Big Tech - with Salesforce also reporting and CrowdStrike updating following a July flub that sparked a worldwide computer outage.
But while the S&P500 .SPX has stopped short of new record highs awaiting the Nvidia results, the market remains buoyant with the Federal Reserve now finally set to cut interest rates in three weeks' time.
Nowhere has that been clearer than in the ease with which Treasury sold another $69 billion of two-year notes US2YT=RR on Tuesday. Demand was stronger than forecast and, at 3.86% early on Wednesday, 2-year yields are eyeing 15-month lows.
Another $70 billion of 5-year paper hits the street later today, with the total of bills and coupons up for grabs this week alone surpassing half a trillion dollars.
Treasury is frontloading the new debt in short maturities and almost three quarters of that huge total this week is in bills with tenors of less than 12 months - a move that will see some benefit to debt servicing costs as Fed rates tumble.
But the good reception for the new two-year notes and with one eye on how all those bills eventually get refinanced over the years ahead, the inverted yield curve between two and 10 years narrowed to just 3 basis points - its smallest in three weeks.
The latest U.S. economic releases provide little bar to those souped-up easing expectations - now running at as much as 104 basis points over the remainder of the year.
Although consumer confidence rose to a six-month high in August, Americans are becoming more anxious about the labor market - the cooling of which is now front and center of the Fed's focus.
And despite multiple supply anxieties from the Middle East to Libya, oil prices CLc1 were on the wane again on Wednesday - and still clocking year-on-year losses of more than 5%.
The dollar was pretty mixed on all that. Its DXY index .DXY was a touch higher as the euro EUR= retreated following some soft euro zone lending data and expectations that the European Central Bank will now cut for the second time next month before the Fed even gets going.
Dollar/yen JPY= was a touch firmer despite relatively hawkish Bank of Japan comments. BOJ Deputy Governor Ryozo Himino restated the central bank's intention to continue lifting interest rates if inflation stayed on course, while closely monitoring financial market conditions.
In politics, the latest national opinion polls continue to show Vice President Kamala Harris marginally ahead of challenger Donald Trump and she remains favorite to win at bookmakers - with the latest Reuters/Ipsos poll showing her also ahead on her economic policy stance.
Harris and running mate Tim Walz are expected to interview with CNN TV on Thursday.
Trump, meantime, faced a revised federal indictment on Tuesday accusing him of illegally trying to overturn his 2020 election loss, with prosecutors narrowing their approach after a U.S. Supreme Court ruling that former presidents have broad immunity from criminal prosecution.
In Europe, British Prime Minister Keir Starmer warned on Tuesday of a 'painful' budget ahead and travelled to Berlin on Wednesday to meet German Chancellor Olaf Scholz.
Sterling GBP= has been buoyed since before Labour's recent election win in part on expectations the new government will ease relations with former European Union partners and seek to soften some of the economically-damaging post-Brexit agreement.
Key developments that should provide more direction to U.S. markets later on Wednesday:
* Federal Reserve Board Governor Christopher Waller in India and Atlanta Fed President Raphael Bostic speaks
* US corporate earnings: Nvidia, Salesforce, CrowdStrike, HP, NetApp, JM Smucker, Cooper Companies, Bath & Body Works
* US Treasury sells $70 billion of 5-year notes, sells two-year FRNs
Nvidia - Implied and actual earnings moves https://reut.rs/3T1HrwP
US job market angst is growing https://reut.rs/3T6Y3Dv
US mortgage rates retreat https://reut.rs/3LSib8l
Case Shiller US home prices and mortgage demand https://reut.rs/4gfGz1J
US 10-year 'term premium' stays negative https://tmsnrt.rs/3Z2ZeHI
By Mike Dolan, editing by Gareth Jones
mike.dolan@thomsonreuters.com
අදාළ වත්කම්
නවතම පුවත්
වියාචනය: XM Group සමාගම් ක්රියාත්මක කිරීම පමණක් වන සේවා සපයන අතර වෙබ් අඩවියේ හෝ වෙබ් අඩවිය හරහා ලබා ගත හැකි අන්තර්ගතය බැලීමට සහ/හෝ භාවිත කිරීමට පුද්ගලයෙකුට ඉඩ සලසමින් අපගේ මාර්ගගත වෙළඳ පහසුකම වෙත ප්රවේශය ලබා දෙන අතර වෙනස් කිරීමට හෝ පුළුල් කිරීමට අදහස් නොකරයි. එවැනි ප්රවේශය සහ භාවිතය සෑම විටම (i) නියමයන් සහ කොන්දේසි, (ii) අවදානම් අනතුරු ඇඟවීම් සහ (iii) සම්පූර්ණ වියාචනයට යටත් වේ. එබැවින් එවැනි අන්තර්ගතයක් සාමාන්ය තොරතුරුවලට වඩා වැඩි යමක් සපයා නොමැත. විශේෂයෙන්ම, අපගේ මාර්ගගත වෙළඳ පහසුකමේ අන්තර්ගතය පෙළඹවීමක් හෝ මූල්ය වෙළඳපොළවල කිසිදු ගනුදෙනුවක් සිදු කිරීමට ඉදිරිපත් කිරීමක් නොවන බව කරුණාවෙන් සලකන්න. ඕනෑම මූල්ය වෙළඳපොළක වෙළඳාම් කිරීම ඔබේ ප්රාග්ධනයට සැලකිය යුතු අවදානමක් එක් කරයි.
අපගේ මාර්ගගත වෙළඳ පහසුකමේ ප්රකාශිත සියලු කරුණු අධ්යාපනික/තොරතුරුමය අරමුණු සඳහා පමණක් අදහස් කෙරෙන අතර මූල්ය, ආයෝජන බදු හෝ වෙළඳ උපදෙස් සහ නිර්දේශයන්; හෝ අපගේ වෙළඳ මිල පිළිබඳ වාර්තාවක්; හෝ ඕනෑම මූල්ය උපකරණයක ඉදිරිපත් කිරීමක් හෝ ඒ සඳහා පෙළඹවීමක්; හෝ විශේෂ ඉල්ලීමකින් තොරව ඔබ වෙත ලබා දෙන ලද මූල්ය ප්රවර්ධනයන් ලෙස නොසැලකිය යුතුය.
ඕනෑම තෙවන පාර්ශවීය අන්තර්ගතයක් මෙන්ම XM විසින් සකසන ලද අන්තර්ගතය එනම් අදහස්, පුවත්, පර්යේෂණ, විශ්ලේෂණ, මිල ගණන් සහ වෙනත් තොරතුරු හෝ මෙම වෙබ් අඩවියේ අන්තර්ගත තෙවන පාර්ශවීය වෙබ් අඩවි සඳහා සබැඳි සාමාන්ය වෙළඳපොළ විවරණයක් ලෙස "පවතින පරිදි" සපයා ඇති අතර එහි ආයෝජන උපදෙස් ඇතුළත් නොවේ. ඕනෑම අන්තර්ගතයක් ආයෝජන පර්යේෂණයක් ලෙස අර්ථ දක්වා ඇති ප්රමාණයට, ආයෝජන පර්යේෂණයේ ස්වාධීනත්වය ප්රවර්ධනය කිරීමට නිර්මාණය කර ඇති නෛතික අවශ්යතාවලට අනුකූලව අන්තර්ගතය සකසා නොමැති බවත් එලෙස අරමුණු කර නොමැති බවත් ඔබ සලකා පිළිගත යුතු අතර එබැවින් එය අදාළ නීති සහ රෙගුලාසි යටතේ අලෙවිකරණ සන්නිවේදනයක් ලෙස සලකනු ලැබේ. ඉහත සඳහන් තොරතුරු සලකා මෙතනින් ප්රවේශ විය හැකි, ස්වාධීන නොවන ආයෝජන පර්යේෂණ සහ අවදානම් අනතුරු ඇඟවීම පිළිබඳ අපගේ දැනුම්දීම ඔබ කියවා තේරුම් ගෙන ඇති බව සහතික කර ගන්න.
