📆 Thursday, August 29
► European stock futures rose despite the global AI rally faltering due to Nvidia's unimpressive (from many investors' perspective) sales outlook and cautious signs of a slowdown. The Euro Stoxx 600 contracts rose by 0.6%. Spain's inflation rate fell to 2.2% in August, down from 2.8% in July, providing some relief on the inflation front. European markets are awaiting the publication of German inflation data later today.
► US markets stabilized and recovered in early pre-market trading, although Nvidia's guidance was disappointing and the company's shares fell over 7% in extended trading (currently only down over 3% in pre-market trading). Despite doubling fiscal Q2 revenue to $30 billion and initiating a $50 billion share buyback, Nvidia's guidance fell short of the market's very inflated expectations, leading to a 7% decline in after-hours trading. Nasdaq 100 futures fell as much as 1.4%, reflecting weakness in the technology sector as a whole and pushing our SHORT position deep into the money. The Nasdaq 100 is now down just 0.4% as investors focus on upcoming US economic data, including Q2 GDP estimates and jobless claims, to gauge the Federal Reserve's next moves. In addition, the Nvidia report seems to be viewed more positively in hindsight – with still very impressive sales growth from Nvidia – albeit with signs that the massive explosive growth is slowing (of course it / it has to). The Fed's preferred inflation measure, the PCE price index, will be released on Friday.
► Asian markets mostly fell, with chipmakers TSMC and SK Hynix leading the declines, reflecting the global downturn in the technology sector. The Nikkei 225 Index in Japan closed unchanged, ending a two-day rally, while the Shanghai Composite fell 0.5% to its lowest level in almost seven months. The Hang Seng Index in Hong Kong rose by 0.52%. Sentiment was further weakened by UBS downgrading its growth forecast for China, citing a sharper-than-expected slump in the real estate market. Australia's S&P/ASX 200 index also fell, due to weaker than expected investment data.
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