Nvidia : When great isn’t enough

Markets

Nvidia, the titan of artificial intelligence and GPU innovation, crushed Wall Street’s third-quarter expectations with impressive sales and earnings while delivering a forecast that topped even the most optimistic estimates. Yet, the stock sagged in a market primed for perfection, taking the broader index down in lockstep. In today’s Nvidia-fueled AI mania, even great results fall short of the market’s insatiable appetite for upside surprises.

Revenue forecasts, though strong, failed to ignite the euphoric sentiment Nvidia has often inspired. With the market heavily skewed long on the AI juggernaut, anything less than an earthshattering beat is now apparently being met with skepticism. Investors, facing an increasingly crowded field of lofty valuations, were grappling with “too many moving parts”—some of which defy comprehension at the human scale.

Bears initially seized the opportunity to pounce, pointing to the challenge Nvidia now faces in consistently outpacing sky-high expectations. However, the much-anticipated Blackwell chip launch cushions the downside risk, ensuring a safety net for the AI giant’s share price. Markets may wobble, but they’re unlikely to spiral.

In a market defined by exuberance, Nvidia’s earnings serve as a stark wake-up call: In the race for AI dominance, excellence might no longer be enough—it’s all about perfection.

Geopolitical arena

A dark cloud of geopolitical uncertainty continues to hover over global markets, casting long shadows on investor confidence and consumer sentiment. Escalating tensions in Eastern Europe and the ever-present friction in U.S.-China relations remain front and center, fueling a cocktail of anxiety across sectors. Adding to the complexity, President-elect Donald Trump’s upcoming inauguration introduces a fresh layer of unpredictability. His polarizing policy agenda could send ripples—or shockwaves—through critical heartland industries worldwide.

Despite these looming threats, investors appear cautiously restrained, avoiding knee-jerk reactions or an all-out flight to “safety trades.” For now, the market is walking a tightrope between wary anticipation and tempered optimism, with a clear eye on how these evolving dynamics will shape the months ahead.

Forex markets

The spotlight blazes on Bank of Japan Governor Kazuo Ueda as he takes the stage at a prestigious financial forum in Paris, with traders hanging on his every word, eager to decode any subtle policy shifts. Earlier this week, Ueda skillfully navigated a tightrope—keeping the door open for a potential December rate hike while emphasizing the risks of premature moves. Now, markets are bracing for a more hawkish tone, hoping for the spark to reignite the yen’s fading momentum and shift the narrative.

The yen’s plight is evident; with just one winning session out of the last eight, USDJPY lunged above 155.00 per dollar at the London Open. A rally back to September’s sub 145.00 levels feels increasingly like a distant memory without a decisive shift in BOJ policy. Compounding the yen’s woes, Japanese swaps are pricing in less than 50 basis points of tightening by the end of next year, leaving little room for Yen bulls unless Ueda delivers an unexpected jolt.

Meanwhile, Bitcoin is inching closer to a monumental $100,000 milestone, driven by mounting confidence that President-elect Donald Trump’s administration will usher in a crypto-friendly era. Speculators rally behind the narrative, fueling a frenzy as the digital asset edges toward an unprecedented valuation.

Gold, the perennial “safe- haven,” continues to hold its ground, supported by geopolitical tensions. But caution prevails. While last week’s dip offered a compelling entry point, the rally could falter if gold’s inverse relationship with U.S. yields and the dollar reasserts itself. With the UST 10-year yield climbing back above 4.40%, the dollar is showing renewed vigour, complicating gold’s outlook in the short term.

Across markets, sensitivity to U.S. economic data remains lopsided. Weak reports tied to temporary disruptions like hurricanes are primarily dismissed, while stronger-than-expected figures ignite bond bears into action. October’s jobs slowdown, distorted by storms and strikes, was waved off as a blip. In contrast, robust data stirs inflationary fears, driving yields higher and strengthening the dollar.

The market’s current dynamics demand a razor-sharp focus. Whether parsing Ueda’s tone, gauging Bitcoin’s meteoric rise, or navigating bond market turbulence, one thing is clear: in a landscape this charged, the smallest tremors can cause seismic shifts. Investors must tread carefully, reading between the lines to separate fleeting noise from meaningful signals.

Oil Markets

How times have changed? Once upon a time, geopolitical tremors could reliably ignite a $10-$15 rally in crude, but those spikes feel more like faint whispers in today’s bearish backdrop. With China’s economic engine sputtering at partial capacity and electric vehicles sweeping across continents, the fuel for old-school oil rallies is in short supply. Instead, geopolitical rallies are now muted echoes of their former selves, unable to cut through the overwhelming bearish noise.

Adding to the pressure, the Energy Information Administration (EIA) dropped another bearish hammer this week. Crude inventories rose for the third consecutive week, driven by a surge in imports along the Gulf Coast that more than offset a rebound in exports. It’s not just a supply glut—it’s a confidence killer for any bullish momentum that might have tried to build.

At the same time, the energy markets are grappling with the implications of a Trump presidency for oil and gas prices. While many of Trump’s policies lean bearish—think deregulation and potential increases in domestic supply—the wildcard lies in his approach to the Middle East and the latest flashpoints in Eastern Europe. These geopolitical risks remain flickering upside, but it’s hard to ignore the overarching bearish sentiment.