CAC 40: Nvidia meeting raises hopes

(CercleFinance.com) - The Paris Bourse is likely to try to move forward again on Wednesday morning, pending the publication this evening of AI giant Nvidia's quarterly results, which could provide fresh impetus to markets in need of reassurance.


At around 8:15 a.m., the 'future' contract on the CAC 40 index - December delivery - posted a gain of 0.3% at 7279.5 points, suggesting a rebound after the previous day's decline.

European stock markets ended yesterday in the red, in nervous trading, following the intensification of the Ukrainian conflict, with Kiev firing US missiles into Russian territory, which did not encourage investors to take any risks.

Tensions had already risen a notch in the morning in the wake of Russian President Vladimir Putin's announcement of a decree expanding the possibilities for the use of nuclear weapons.

After dropping as much as 2% in the early afternoon, the Paris market managed to reduce its losses in the second half of the day, ending the session with a limited decline of 0.7%.

On Wall Street, traders were more cool-headed, literally ignoring the wave of stress linked to the risk of nuclear escalation in Eastern Europe.

At the close, the Dow Jones was down by just 0.3%, while the S&P 500 was up by 0.4% and the Nasdaq was up by around 1%.

Traders will be hoping to relegate worries about the war in Ukraine to the background with the eagerly-awaited publication of Nvidia's quarterly results, due tonight at the close of trading in New York.

By gaining almost 5% yesterday, the AI chipmaker moved closer to its all-time highs on the eve of its financial statements, which should once again come in above analysts' expectations.

But the Californian group, which is now listed on the Dow Jones, will need to publish solid results and unveil a promising outlook if it is to reassure investors scalded by the recent downturn in technology stocks.

With a market capitalization of over 3,600 billion dollars, the world's leading company in terms of market valuation is posting an annual gain of almost 200% at this stage of the year, which speaks volumes about the level of investor expectations.

"We've never seen a company reach such levels on the stock market", reminded Jim Reid, market analyst at Deutsche Bank, this morning.

The problem is that, with such a high valuation, the slightest sign of weakness would rekindle fears about the sector's growth, and risk being severely punished.

The macroeconomic calendar looks to be light today, although investors will be paying close attention to the latest UK inflation figures.

After yesterday's sell-off in safe-haven assets, bond trading is calmer, with the yield on 10-year US government bonds easing back below 4.38%.

The dollar, a traditional safe-haven asset, stabilized against the euro, which continued to hover around the 1.0590 threshold.

On the oil market, Brent and WTI prices were perfectly unchanged ahead of the release of weekly US crude inventories in the afternoon.

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