Nvidia, Leading AI Stock, to Announce Quarterly Earnings on the 19th
FOMC Minutes on the 19th, Employment Report Release on the 20th
Alphabet Surges 4% on News of Warren Buffett's Investment
The three major indices on the New York Stock Exchange declined on November 17 (local time). Ahead of this week’s earnings announcement from Nvidia, the leading artificial intelligence (AI) stock, and the release of the September employment report-which was delayed due to the federal government shutdown-investors are taking a cautious, wait-and-see approach.
A trader is working on the floor of the New York Stock Exchange (NYSE) in the United States. Photo by UPI Yonhap News
As of 11:16 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was down 264.86 points (0.56%) from the previous trading day, standing at 46,882.62. The large-cap S&P 500 Index had fallen 37.21 points (0.55%) to 6,696.9, while the tech-focused Nasdaq Index was trading at 22,768.259, down 132.33 points (0.58%).
By stock, Alphabet, the parent company of Google, surged 4.08%. Buying activity increased after Berkshire Hathaway, led by legendary investor Warren Buffett, announced it had acquired a stake in Alphabet. Nvidia was down 2.14% amid concerns over overheated AI investment and overvaluation ahead of its third-quarter earnings release on the 19th. Apple fell 2.07%, and Microsoft (MS) was down 0.86%.
Chris Larkin, Managing Director at Morgan Stanley E*TRADE, analyzed, “Normally, the monthly employment report drives the economic calendar this week, but with AI-related trades struggling in recent weeks, Nvidia’s earnings are likely to become the key variable shaping market momentum.”
Dennis Polmer, Chief Investment Officer (CIO) at Montis Financial, pointed out, “It would not be surprising if Nvidia delivers a strong earnings report and raises its outlook,” adding, “This could further heighten concerns over seemingly endless AI capital expenditures.”
On the 20th, the September nonfarm payroll report will be released. The shutdown, which began on the first of last month and lasted a record 43 days, delayed the release of both the September and October employment reports. With the shutdown abruptly ending on the 12th, inflation and employment indicators that had not been published are now set to be released sequentially. However, regarding the October employment report, Kevin Hassett, Chairman of the White House National Economic Council (NEC), stated that the October unemployment rate will be permanently omitted due to incomplete data collection, raising concerns about the reliability of employment statistics.
One day earlier, on the 19th, the minutes of the October Federal Open Market Committee (FOMC) meeting will be released. The Federal Reserve had cut its benchmark interest rate by 0.25 percentage points in two consecutive moves due to concerns over slowing employment. Last month, two committee members dissented, with one favoring a rate hold and another advocating a 0.5 percentage point cut. With strong internal disagreement over the future path of rates, the upcoming FOMC minutes are expected to provide clearer insight into the committee members’ economic and interest rate outlooks and discussions.
CIO Polmer commented, “With the FOMC divided over the next steps, if the September employment report is stronger or weaker than expected, it could significantly affect expectations for a rate cut in December. Now that the government has reopened, more time is needed to analyze economic indicators, making it more likely that the Fed will pause a rate cut in December.”
U.S. Treasury yields are moving sideways. The 10-year U.S. Treasury yield, a global bond benchmark, fell 2 basis points (1bp = 0.01 percentage point) from the previous day to 4.12%, while the 2-year Treasury yield, which is sensitive to monetary policy, remained unchanged at 3.61%.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
