Nvidia’s upcoming guidance is set to be pivotal. With a significant number of call options written on NVDA, market makers may not react strongly to earnings, as they often employ “mean reversion algorithms” to manage the exercise of these options.
Nvidia’s rise to over $4 trillion in market capitalization has been nothing short of remarkable. According to Deutsche Bank, this figure now represents 3.6% of global GDP, placing Nvidia’s market cap above the combined stock markets of Britain, France, and Germany. Only China, India, and Japan boast larger stock market valuations. Nvidia’s dominance in AI chips is driving demand from data centers for various AI applications.
In other news, crude oil prices may not see significant drops this fall, despite typical seasonal declines, due to disruptions in Russian crude oil exports. Over the past two weeks, these exports have decreased by 600,000 barrels per day as Ukraine targets pipelines, refineries, and a key pumping station near the Russian-Belarusian border.
Additionally, President Trump’s decision to raise U.S. import tariffs on goods from India to 50%—a response to Russian oil purchases—has contributed to a decline in crude oil shipments to India, which have fallen by over 500,000 barrels daily in the last two months.
In the U.S., consumer anxiety is rising. The Conference Board reported a decline in its consumer confidence index to 97.4 in August, down from 98.7 in July. The expectations component dropped to 74.8, signaling potential recession risks when falling below 80. It’s crucial for the Fed to cut key interest rates to bolster consumer sentiment and avert a recession.
German consumers are also feeling the strain. A consumer climate index from GfK and the Nuremberg Institute for Market Decisions fell for the third consecutive month, now sitting at -23.6, down 1.9 points from July.
Concerns are mounting over job losses in Germany as the manufacturing sector grapples with soaring electricity prices, diminishing competitiveness. The country remains in an economic recession that has lasted over two years, with little indication of recovery ahead.
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