Nvidia earnings more important than CPI, Fed: Barclays Predicts
Barclays analysts believe that Nvidia's upcoming earnings report on November 20 will be the most crucial market event of the year, overshadowing traditional economic indicators such as CPI data and Federal Reserve decisions. This anticipation highlights the significant impact AI has on the market and the growing enthusiasm among retail investors seeking potential gains.
In their note, Barclays notes that Nvidia's earnings will likely serve as the final major catalyst for market movements in 2024. The bank points to a surge in activity surrounding Nvidia and similar stocks like Tesla, Coinbase, and Palantir, emphasizing the dominance of single-stock dynamics in driving market sentiment.
Options markets are predicting an 8% move in Nvidia's stock after earnings, which is slightly lower than the two-year average. Barclays warns of asymmetric risks due to speculative activity in Nvidia-related products, particularly leveraged exchange-traded products (ETPs) that could amplify volatility.
The influence of Nvidia's earnings isn't just limited to U.S. markets—Europe's semiconductor giant ASML is also seeing heightened interest tied to Nvidia's results, with options indicating a larger-than-usual implied move of 3.3%.
Barclays advises caution in approaching Nvidia's earnings, as high expectations combined with speculative activity could lead to unpredictable market swings.
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