LGT Navigator

Markets cautious ahead of Nvidia earnings, Fed report

Investors were cautious ahead of earnings from chipmaking giant Nvidia and the minutes of the meeting of the Federal Open Market Committee, both due later on Wednesday. US stocks dropped after reopening from a long weekend while Asian stocks were mixed midweek.

Shane Strowmatt, LGT
Temps de lecture
5 minutes
© Shutterstock

In New York, stock indices slipped after reopening from the long Presidents' Day weekend. The Dow Jones Industrial lost 0.2% and the S&P 500 dropped 0.6%. The Nasdaq-100 lost 0.8%, dragged down by heavyweight chipmakers like Nvidia (-4.4%) and AMD (-4.7%). On Wednesday, Nvidia, one of the so-called "Magnificent 7" US tech giants, reports earnings figures. The company’s stock is up about 40% since the start of the year.

Looking beyond the chip sector, Walmart shares gained 3.2% after the company reported adjusted earnings of USD 1.80 per share versus a consensus of USD 1.65. The retail giant provided a slower sales guidance of around 3%-4% for the current fiscal year, noting that consumers are becoming choosy in their purchasing decisions. Spending for basic goods and groceries remains strong, but spending on discretionary products is stalling as consumers look for cheaper substitute goods.

In the Asia-Pacific region, stock markets were mixed. Hong Kong's Hang Seng Index gained 2%, while the Shanghai Composite was up 1.3%. Beyond China, stocks were mostly in the red. In Tokyo, the Nikkei 225 closed 0.2% lower on Wednesday after business morale at Japanese manufacturers came in weak. The Reuters Tankan survey dropped to -1 in February compare with January’s +6, signalling more pessimists among Japanese manufacturers than optimists for the first time in ten months. Meanwhile, Japanese exports rose more than expected at 11.9% in January but the figure was likely distorted due to the Lunar New Year festivities falling in January last year. South Korea’s the Kospi fell 0.2%. Australia’s S&P/ASX 200 dropped 0.7% after annual pay growth increased to 4.2% in the fourth quarter, the fastest pace in 15 years. The country’s central bank listed wage growth as one of the reasons for keeping interest rates unchanged at its last policy meeting.

In the euro zone, wages increased by 4.5% in the fourth quarter, slowing from 4.7% in the previous quarter. Slower wages calmed traders’ fears that high wages could fuel further inflation, pushing back the European Central Bank’s (ECB) timeline for lowering interest rates. The retreat comes after wages growth quickened from just over 1% in the third quarter of 2021. Falling wages quell fears of a so-called wage-price-spiral, but just one quarter of falling pay data is unlikely to be particularly reassuring for the ECB. If the central bank wants to be reassured that wages are falling sustainably in the euro zone, it will have to wait for first-quarter data due in May before making a decision at its monetary policy meeting in June.

Corporate news in focus: Quarterly figures from Glencore, Marathon, Nvidia, Rio Tinto.

Economic data in focus: EU and euro zone Consumer Confidence Indicator, FOMC meeting minutes.


LGT helps you make informed investment decisions

All about global economic and market trends at a glance

You can also follow us on Facebook or LinkedIn – or visit Insights and discover interesting background articles. If you have questions, a consultant from the bank will be happy to help you.

Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.

Prendre contact