🔔Week Overview: NVDA Earnings & PCE
& Crypto rises after Jackson Hole
With this post, we are in the last week of August! Is it just me or did this summer pass really quickly? It feels like it was just yesterday that we were preparing for the month of June.
Of course, it’s only fitting that we close out the summer with the most anticipated earnings report: NVDA 0.00%↑.
⭐TLDR: Nvidia reports Q3 performance Wednesday after market close. Investors are anticipating EPS to come in at 0.64 and revenue to be $28.71B. The implied move off of their earnings is expected to be ~10%. We also have GDP and unemployment claims Thursday while the PCE report closes out the week on Friday.
Besides Nvidia, some other notable earnings this week are:
Wednesday: ANF 0.00%↑ , CRM 0.00%↑, CRWD 0.00%↑ and AFRM 0.00%↑
Thursday: BBY 0.00%↑, LULU 0.00%↑, ULTA 0.00%↑, BBY 0.00%↑
NVDA 0.00%↑ has a 10.09% implied move for their upcoming earnings report, their largest implied move in the past ten quarters.
EPS expectation: 0.64
Revenue expectation: $28.71B
The focus point will be further guidance on how the company will close out FY2024 as well as how Nvidia is faring versus their competition. Bulls want to see efficiency improvements to their process and strong robust demand.
We also have a bit of data coming in this week:
Monday: Durable goods 8:30AM
Tuesday: CB Consumer Confidence 10AM
Wednesday: Crude Oil Inventory 10:30AM
Thursday: GDP & Unemployment Claims 8:30 AM
Friday: PCE 8:30AM
Jackson Hole Recap
Besides intra-week and intraday volatility, we will likely get a big move this week post NVDA 0.00%↑ earnings and then chop until the September 17-18 FOMC meeting. Powell remained dovish during his speech this past Friday at the Jackson Hole Economic Symposium.
“The time has come for policy to adjust”, Powell has essentially signaled that the Fed is ready to do its first rate cut at the upcoming September FOMC meeting. The Fed has held interest rates at 5.3% for more than a year now, which is actually the highest rate we’ve had for the past twenty years. Powell did refrain from disclosing how large of a cut we would be getting, but there will be FOMC meetings in November and December (with more cuts in each month).
While the labor market has seemed to waver a bit, it will be interesting to see how aggressive the Fed will be with rate cuts to close out 2024. Fed Chairman Powell did say that they are willing to cut aggressively if there are any signs of continued weakness in the US labor market.
Post Powell speech, the S&P 500 ended up closing about half a percent away from ATHs that were made back in mid-July.
On July 7, I posted about the seasonality of the market and the possible connection to the first rate cut in September.
Seasonality wise, September to October tend to experience some rough waters. We could potentially see a short term sell the news reaction from the market after the September FOMC meeting. Nonetheless, great opportunities to DCA into solid companies for long term holds!
👉Crypto Rises
On Friday, Bitcoin ended up rising almost 3% after Jackson Hole. From a technical standpoint, Bitcoin is still in a very nice weekly flag. These flag consolidation patterns tend to play out to the upside.
We saw more inflow into spot Bitcoin ETFs like BITO 0.00%↑ and BLK 0.00%↑. Kamala Harris has also signaled she would be open to crypto friendly policymaking. I think Crypto is currently following the script pretty well. I’ve mentioned in prior posts that I believe Q4 of 2024 to Q1 of 2025 will be the peak of cryptocurrency prices. I believe we have still not seen the true supply shock effects from the Bitcoin halving. Once we break the flag, new ATHs will be made.
Interestingly enough, Bitcoin ETFs have seen more inflows than outflows whereas Ethereum ETFs have encountered the opposite. This divergence shows the conflicted perspectives of investors on Bitcoin vs Ethereum. It could be that Bitcoin was the first cryptocurrency ETF and investing into Ethereum might just be too far fetched of an idea for now (too risk on). Another factor could be the increasing popularity and competition of alt-coins like Solana and Tron. Daily transactions on the Solana chain reached $58 billion while the Tron network saw up to $40 billion in daily volume. The underperformance of Ethereum could signal a lack of confidence/need for additional ETFs for other altcoins.
