Equities report: NVIDIA earnings today

The S&P500 appears to be slightly in the greens for the day,but has moved lower since last week as participants eagerly await the release of Nvidia’s earnings report later on today. In the current report, we’ll take a look at Nivida’s earnings report, the possibility of tariffs being imposed on Canada and Mexico next week and the release of the US Core PCE rate on Friday whilst ending our report with the technical analysis of the S&P 500’s daily chart. 

NVIDIA earnings due out today

NVIDIA is set to release its earnings report for Q4 of 2024 later on today. The announcement is set to garner significant attention from market participants, given NVIDIA’s heavyweight status in the industry and its dominance in the AI narrative, it could be considered as highly influential for the direction of the tech sector in the US. According to analysts, the expected EPS is $0.80 which would be higher than last quarter’s figure of $0.78, with the company also expected to showcase an increase in revenue from $35.08B to $38.16B. As such should the company’s earnings report come in as expected by analysts it may aid the company’s stock price. Whereas should the company report a lower-than-expected EPS and revenue figure, it may have the opposite effect on Nvidia’s stock price. In addition, the company’s earnings call may garner attention and in particular their forward-looking expectations, which could also influence the direction of NVIDIA’s stock price depending on the narrative.

Mexico and Canada to face tariffs next week?

Tariffs on Canada and Mexico are apparently back on the table, with President Trump’s onemonth grace period set to expire on the 4th of March. Specifically, President Trump when asked about the potential tariffs being imposed, stated that they “will go forward” and they will be “on time, on schedule” implying that they may go into effect on the aforementioned date which is the 4  of March. The tariffs would see a 25% levy on Canadian and Mexican imports to the US which were meant to be implemented last month but were postponed after pledges by Prime Minister Trudeau and Mexican President Sheinbaum to boost their borderpolicing efforts. The possibility of tariffs coming into effect on March 4th, may be of concern as it could lead to retaliatory measures by Mexico and Canada. The possibility of trade wars occurring as a result of the implementation of tariffs, may be a source of concern in the US Equities markets, as the true impact on the economy is yet to be seen. Thus the possibility of increased volatility and uncertainty could weigh on the US stock markets. However, should the anticipated tariffs fail be to be implemented, it could ease market worries and could thus aid the US stock markets US Core PCE rate due out Friday.

The US Core PCE rates for January are set to be released this Friday. The Core PCE rates are the Fed’s favourite tool for measuring inflationary pressures in the US economy and could thus lead to heightened market volatility during their release. Economists are currently anticipating an acceleration of the Core PCE rates on a month-on-month basis from 0.2% to 0.3% , whereas on a year-on-year basis the expectation is for the release to showcase easing inflationary pressures with the expected rate being 2.6% which would be lower than the previous release of 2.8%. Nonetheless, we tend to turn our attention to the Core PCE rate on a year-on-year basis and thus should it come in as expected or lower, which may imply easing inflationary pressures in the US economy it could increase pressure on the Fed to resume on their rate-cutting path which could provide a boost to the US equities markets. On the other hand, should the release showcase stubborn or even an acceleration of inflationary pressures, it could validate the Fed’s option to adopt a more gradual rate-cutting path which may be perceived as hawkish in nature and could thus weigh on the US Equities markets, as the financial conditions surrounding the US economy may remain restrictive for a prolonged period of time.

기술적 분석

US500 Daily Chart

• Support: 5930 (S1), 5770 (S2), 5580 (S3)
• Resistance: 6100 (R1), 6250 (R2), 6400 (R3)  

The S&P 500 appears to be moving in a sideways fashion, having cleared our former support now turned to resistance at the 6100 (R1) level and having now bounced off our former S2 now turned to S1 level at the 5930 (S1) figure. We opt for a sideways bias and supporting our case is the index’s failure to clear our former S2 support line. However, we must note that the RSI indicator below our chart currently registers a figure near 40 implying a bearish market sentiment. Nonetheless, for our sideways bias to be maintained we would require the index’s price to remain confined between the 5930 (S1) support level and the 6100 (R1) resistance line. On the other hand, for a bearish outlook we would require a clear break below our 5930 (S1) support level, with the next possible target for the bears being the 5770 (S2) support base. Lastly, for a bullish outlook we would require a clear break above the 6100 (R1) resistance line with the next possible target for the bulls being the hypothetical 6250 (R2) resistance level.

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