Stock market today: US stocks hold near record highs with Nvidia front of mind

Stock market today: US stocks hold near record highs with Nvidia front of mind

U.S. stocks held steady near record highs Tuesday as investors bided their time for Nvidia (NVDA) results looked to retail earnings and Fed speech for clues about the economy.

S&P 500 Futures (ES=F) changed little after the benchmark closed just a little short of the absolute record reached last week. Dow Jones Industrial Average Futures (YM=F) and the very technological Nasdaq 100 (NQ=F) also married the flat line.

Investors are looking to companies for guidance in the absence of high-level economic data releases.

The focus is on Nvidia’s highly anticipated Wednesday earnings report, which is expected to be released on Wednesday. create a big movement in its share price and recovery actions more generally. A price hike for the AI ​​chipmaker helped push the Nasdaq Composite higher (^IXIC) at a record level on Monday.

Meanwhile, investors are receiving a wave of quarterly reports from retailers to get direction on consumer spending and the health of the economy.

Lowe’s (WEAK) sales fell less than expected as cash-strapped Americans continued to spend on small repairs, while Macy’s (Mr.) shares gained after the bankruptcy of the department store chain profits exceeded the low bar. Automatic zone (AZO) and Urban Outfitters (URBAN) are also on the role.

Investors are also listening closely to speeches from Federal Reserve officials, as a lack of economic publications starves the central bank. debate on rate reduction fuel. Tuesday’s list will include, among others, Cleveland Fed President Christopher Waller.

Learn more: How does the labor market affect inflation?

In recent days, policymakers have redoubled the message that inflation may not yet be calm enough to lower rates from their current all-time highs. More information – and a key test of optimism in favor of cuts – will come in Wednesday’s release of the minutes of the Fed’s May meeting.

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  • Macy’s Neighborhood Reading

    Macy’s (Mr.) shares are jumping after reporting earnings this morning, as the company didn’t issue a warning for the full year and said sales at its top 50 stores rose.

    In fact, the EPS guidance range has generally been left alone.

    And that surprises me, given the first quarter’s challenges in the credit card business (sales fell) and merchandise margins (also declined).

    Even if investors choose to accept the positive aspects of Macy’s, I advise you not to overlook the negative aspects. One is that sales are down at hundreds of other Macy’s stores that will likely be closed over the next few years. You need to evaluate the entire company, not just 50 stores, as the company’s earnings release text would have it.

    Additionally, the company’s consumer feedback didn’t exactly inspire confidence in how the back-to-school shopping season was going to pan out.

    Brooke DiPalma of Yahoo Finance has the profit breakdown here.

  • Stock market today: US stocks hold near record highs with Nvidia front of mind

    Good valuation point on Nvidia from EvercoreISI

    An interesting phenomenon on Nvidia (NVDA) appeared.

    The AI ​​chip king’s stock might actually be cheap, EvercoreISI suggests in a note this morning.

    “The combination of slowing revenue growth and growing concerns about competition has pushed Nvidia’s relative P/E ratio toward the bottom of the 10-year range, creating a scenario in which healthy upside (on Wednesday’s earnings) will lead to near-term upside for the stock…and we expect a healthy upside,” says analyst Mark Lipacis.

    Its table below for more precision.

    I will note that Nvidia stock isn’t actually very cheap from a pure valuation perspective. It trades at an estimated forward earnings P/E ratio of nearly 40 times…the S&P 500 trades at around 20.7 times.

    All the key valuation metrics on Nvidia from Yahoo Finance can be found here.

    Nvidia stock is taking a pause in its valuation expansion.Nvidia stock is taking a pause in its valuation expansion.

    Nvidia stock is taking a pause in its valuation expansion. (EvercoreISI)

  • Stock market today: US stocks hold near record highs with Nvidia front of mind

    Nvidia’s dominance in a chart

    NVIDIA (NVDA) is a week old, and it hasn’t even released its earnings yet (it’s Wednesday evening).

    CEO Jensen Huang appears to have been won over by Dell (DELL) Las Vegas conference yesterday, with Dell itself hinting at a possible move to Nvidia processors.

    As you continue your homework on Nvidia ahead of tomorrow’s report, a new chart from Goldman Sachs offers some perspective on the AI ​​chip darling.

    Nvidia's dominance, in a chart.Nvidia's dominance, in a chart.

    Nvidia’s dominance, in a chart. (Goldman Sachs)

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