⚡Morning Wrap: Nvidia wows with results again (08.26.27)

📈 Stocks and Companies

• American giant Nvidia published excellent results for the second quarter of fiscal year 2027, exceeding analyst forecasts in terms of revenue and earnings per share.
• In the initial post-session reaction, the stock fell by about 3%, but this was followed by a quick rebound of over 5% in overnight trading, mainly thanks to excellent forecasts for the next year.
• CFO Colette Kress announced that the company expects revenue growth in fiscal year 2028 of approximately 70%, which significantly exceeded the market consensus of 44%.
• CEO Jensen Huang revealed that actual demand is growing at a rate close to 100%, and the only limitation for the company remains supply bottlenecks in the memory area, which may last until 2028. Additionally, the company finalized the acquisition of the Hugging Face platform for $12.9 billion USD.
• Chinese startup Z.ai recorded an 8% increase in quotes after presenting a new artificial intelligence model that operates exclusively on Chinese-made integrated circuits. This step is highly significant in the context of the ongoing technological rivalry with the US and China's pursuit of hardware independence.
• Clothing giant Shein plans to debut on the Hong Kong stock exchange, valuing its Initial Public Offering (IPO) at $26.5 billion USD.
• As of 07:10 AM CET, S&P 500 futures are at 7716, gaining 0.08% (and gaining 0.37% for the whole week), while Nasdaq 100 futures are at 29,475, gaining 0.16% (and gaining 0.35% for the whole week), and Nvidia is at 209.77, losing 1.52% (and losing 2.26% for the whole week).
• The contract for the German DAX index (DE40) is gaining 0.2% before the open, while the Eurostoxx 50 (EU50) contract is rising by as much as 0.46%.

📊 Macroeconomics

• The profit growth of China's industrial sector sharply slowed down in July to 11.2% year-on-year, which is the lowest reading this year. Cumulatively, profit growth for the first seven months of the year amounted to 17.6% compared to 18.7% recorded in the first half of the year. This slowdown raises questions about whether the previous recovery driven by global demand for artificial intelligence hardware is beginning to lose momentum, which could negatively impact demand for cyclical commodities.
• Bank of Japan Deputy Governor Ryozo Himino gave a hawkish speech, calling for timely interest rate hikes to stabilize inflation around the 2% target. He pointed to the weak yen and rising global demand for AI technologies as the main pro-inflationary factors, which directly translate into higher export prices for Japanese chips and semiconductor manufacturing equipment.
• The Bank of Korea decided to raise the interest rate by 25 basis points to 3.00%, which is the second consecutive increase and the highest rate level since January 2025.
• Australian household spending rose by 1.1% month-on-month in July, almost tripling economists' forecasts of 0.4%. Year-on-year, this growth accelerated to 7.0% from 6.1%, which, combined with earlier hot CPI inflation data, reinforces market expectations for a rate hike by the Reserve Bank of Australia.
• French presidential candidates presented radically different economic plans for the country's future to business leaders. These diverging visions are causing investor anxiety about the fiscal stability and financial health of the euro zone's second-largest economy.
• Investors in the Asia-Pacific region are showing great caution, awaiting Friday's speech by the new head of the US Federal Reserve, Kevin Warsh, during the annual symposium in Jackson Hole.

🛢️ Commodities

• The raw materials markets widely commented on reports from the British agency UKMTO about an attack on a Kuwaiti tanker in the Strait of Hormuz, allegedly carried out by Iran. Although the information gained wide publicity on Thursday, the agency specified that the incident took place on August 25, which led to a calming of sentiment and stabilization of oil prices at relatively low levels.
• Wheat quotes rose to their highest levels in three years due to reports of a possible escalation of Russian attacks on Ukraine, which poses a direct risk of disrupting global exports of this commodity.
• Gold prices returned near the $4,620 USD per ounce level, supported by concerns about the depreciation of the American currency and the rapidly growing public debt of the United States. Analysts at UBS bank raised their target forecast for gold to $5,400 USD per ounce, citing the progressive trend of global de-dollarization.
• As of 07:10 AM CET, gold is at 4,620, gaining 0.56% (and gaining 0.37% for the whole week), while WTI crude oil is at 81.80, losing 0.09% (and losing 5.59% for the whole week), while copper is at 14,217, losing 0.8% (and gaining 0.27% for the whole week), and WHEAT is at 754.11, gaining 0.87% (and gaining 8.37% for the whole week).

💱 Currencies

• The Australian dollar remains strong due to capital inflows from hedge funds that speculate on the AUD's advantage over the New Zealand dollar due to the RBA's hawkish policy and political tensions in New Zealand.
• The British pound is consolidating below the 1.3600 level, remaining near its weekly lows in the face of anticipation of a hawkish tone in Kevin Warsh's speech.
• Analysts at ING bank forecast further weakening of the Canadian dollar due to uncertainty and customs-tariff chaos in North America, despite the temporary stabilization of the currency's quotes.
• As of 07:10 AM CET, GBPUSD is at 1.3587, losing 0.01% (and losing 0.32% for the whole week), while USDJPY is at 159.35, gaining 0.06% (and gaining 0.34% for the whole week), while USDCHF is at 0.8054, gaining 0.14% (and gaining 0.62% for the whole week), and the dollar index is at 99.08, gaining 0.01% (and gaining 0.41% for the whole week).

🪙 Cryptocurrencies

• The main cryptocurrency shows low volatility, stabilizing above the key $78,600 USD threshold, while investor attention shifts to the traditional market ahead of the Fed chairman's speech.
• The VeChain project recorded a strong, over 7% surge, leading the gains in the segment of smaller capitalization altcoins and catching up with the rest of the market.
• As of 07:10 AM CET, Bitcoin is at 78,601, losing 0.03% (and gaining 1.11% for the whole week).

🗺️ Geopolitics

• Russian President Vladimir Putin is preparing to intensify military operations after concluding that peace negotiations have reached a stalemate. Additionally, a merchant ship near the Ukrainian port of Izmail was reported damaged by fragments of a downed drone, and the European Union is analyzing the possibility of using profits from frozen Russian assets to support Ukraine.
• The Israeli government analyzed the possibility of expelling British diplomats from the structures of an international center intended to support the post-war reconstruction of the Gaza Strip.
• The Chinese Foreign Minister met with the US Ambassador in Beijing, declaring the need to eliminate barriers in dialogue and better manage differences of opinion, while noting that mutual relations are still fraught with many risks.
• Pyongyang, through the official agency KCNA, condemned the US decision to approve the sale of weapons to South Korea, describing it as a direct threat to security in the region and announcing a decisive response to hostile actions.

🔍 Suggested for Observation

• WHEAT — Wheat quotes reached three-year highs after reports of the escalation of military operations by Russia, which directly threatens the global grain supply chain.
• COPPER — Despite a slight decline of -0.80%, copper is characterized by an extremely high 5-year Z-score of +2.77, suggesting strong market overheating in the long term.
• AUDUSD — The currency is characterized by a high Z-score of +2.23 and is enjoying demand from hedge funds due to the divergence in RBA and RBNZ policy.
• VECHAIN — The leader of gains in the cryptocurrency sector with a low 5-year Z-score of -1,35, which may signal the potential for further catching up with the rest of the market.