Marcus Today Pre-Market Podcast – Friday 26th May

Wall Street ended mostly up overnight after Nvidias blowout forecast sent the chipmakers’ share price surging 24%, which fuelled a rally in AI-related companies. S&P 500 gained while the Dow fell for its 5th session, dragged down by Intel shares. Debt ceiling talks failed to reach an agreement, but GOP Rep McHenry said “the list of issues dividing the two camps had grown shorter”, edging closer to a deal. June 1st deadline looming. US treasury yields are up, and the USD reached a two-month high. In contrast, Gold slid to its lowest level in months. European markets broadly lower, as global economic slowdown and US debt ceiling stand-off outweigh optimism. STOXX 600 Index fell 0.3%, losing 2.7% in three consecutive days.

Dow Jones down 35 points (-0.11%). S&P 500 up 0.9%. NASDAQ up 1.7%. VIX Volatility Index down 4.4%. In European markets Stoxx 600 -0.3%, FTSE -0.7%, CAC -0.3%, and DAX -0.3%. SPI Futures are down 6 points (-0.08%).

Nvidia's stock surged 24%, marking one of the largest one-day gains for the U.S. stock, as its revenue forecast highlighted the untapped potential of AI. This surge doubled the company's stock value for the year and propelled its market capitalisation to around US$939bn, inching closer to the trillion-dollar club, making Nvidia the largest chip firm after Apple, Alphabet, Microsoft, and Amazon. The positive earnings report also boosted the chip sector and AI-focused firms, seeing The Philadelphia SE Semiconductor Index up 7% to its highest level in more than a year.

• US corporate profits plummeted by 6.8% in Q1 2023, the lowest since Q2 2021, surpassing market expectations and marking the largest decline since Q1 2020.
• US Bond yields sharply rose. 2Y yields up 19bps. 10Y yields up 10bps.
• Heavyweight tech stocks higher: Apple +0.7%, Meta +1.4%, Google +2.1%, and Microsoft +3.8%.
• Intel Corp -5.5% viewed as lagging in the AI race by the market.
• Ralph Lauren Corp +5.34% after the luxury retailer beat profit expectations.
• Gold reached a two-month low, down 0.85% due to progress in U.S. debt ceiling talks and expectations of a rate hike by the Federal Reserve. The optimism surrounding the debt ceiling negotiations reduced the demand for safe-haven gold.
• Silver also reached its lowest point in two months down 1.4%.
• Zinc fell 2.15% to its lowest level since July 2020 due to weak demand and rising inventories. The economic recovery in China, has been slower than expected pushing prices down.
• Copper +0.67%, Nickel +2.34%, Aluminium +0.27%, Lead +0.71%, Tin +2.02%.
• WTI crude dropped 3.69% and Brent fell 2.79%, ending a three-day period of gains. The decrease came after Russian Deputy Prime Minister stated that OPEC+ would not implement additional production cuts.

Catch up on the latest news with Henry Jennings’ Pre-Market Podcast.

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