The biggest company in the world is announcing earnings data today which will be closely watched.
- The stock market is in focus today as tech company NVIDIA, the largest company by market capitalisation, will report earnings data. Option markets imply analysts see about $350 billion of market capitalisation in doubt one way or another, so a figure at the extreme of estimates could send NVIDIA notably higher or lower. As the company is such a large segment of both the S&P 500 Index and the NASDAQ 100 Index, it has the potential to lead the broader market higher or lower.
- Stock markets are generally lower, continuing a wide selloff. The KOSPI Composite is down by almost 2% today. The general retracement in stocks is nothing special and is still a bull market by any measure. The fears are rising yields and war-driven inflation, which are lowering risk sentiment.
- The weekend approaches, and with it, President Trump's implied but clear deadline to Iran to agree a deal. This is contributing to market nervousness as there is no obvious sign of a deal bar President Trump's assertion that the Gulf States really think it can be done. I put little weight on that, as the Gulf states are now wary of renewed fighting. I think markets are underestimating the chance of a return to war within a few days. It is worth noting that the prediction site Polymarket's betting odds imply that combat between Iran and the USA is likely to resume by mid-June. There are hints that if the USA does resume striking Iran, it would be a short campaign lasting only a few days.
- Generally high yields remain a big factor in market sentiment, weighing upon equities, as central banks react to sticky and growing levels of inflation. The 10-Year US Treasury Yield made a new multi-year high yesterday. Trend traders will certainly want to be long of the US 2-Year and 10-Year Treasury Yield futures, which are available as very affordable micro futures on the CME. Rate yield instruments have a great historical record for trend followers over recent decades. I am long here.
- The USD/INR currency pair looks bullish in early price action and is not far off its all-time high. There are several factors contributing to the long-term weakness of the Indian Rupee, and trend traders might want to bet on this, unless they think the Reserve Bank of India will find some way to intervene successfully.
- In the wider Forex market, the US Dollar remains firm. The USD/JPY currency pair is still in focus after trading above ¥159 yesterday.
- Gold made a new 1.5-month low price and it still looks bearish, as does Silver.
- Bitcoin may have found some support above $75,000 after trading consistently lower since breaking down from its ascending price channel on Wednesday last week.
- Yesterday saw Canadian CPI (inflation) data released which was lower than expected, with the month-on-month increase only 0.4% while 0.7% had been anticipated. This helped weaken the Loonie for yet another day.
- There will be a release of UK CPI (inflation) data today.