Editor's PiCK
[New York Stock Market Weekly Outlook] Wall Street focuses on inflation indicators and NVIDIA earnings
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- This week on the New York stock market, the Personal Consumption Expenditures (PCE) index and NVIDIA's second-quarter earnings are reported to be the main points of interest for investors.
- There are expectations for a rate cut at the September FOMC, but it is noted that if the PCE growth rate is high, a rate cut may be difficult.
- NVIDIA's earnings announcement is expected to be an important indicator for resolving the AI bubble theory and for future tech stock purchases.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
Weight given to speculation of Fed rate cut in September
High PCE could become an obstacle
AI bubble theory could be determined by NVIDIA earnings
The main focus for investors on the New York stock market this week is the Personal Consumption Expenditures (PCE) index, which is the preferred inflation indicator of the United States central bank (Fed), and NVIDIA's second-quarter earnings.
Recently, Wall Street has been expecting an interest rate cut at the September Federal Open Market Committee (FOMC) meeting. On the strength of this expectation, major stock indices rebounded sharply, and the S&P 500 index closed last week with a 0.27% gain. Fed Chair Jerome Powell cited increased downside risks to employment as the main reason for possible policy adjustments. However, if the PCE growth rate for September comes in higher than expected, a September rate cut could be uncertain.
According to market forecasts compiled by financial information provider FactSet, core PCE, which excludes the highly volatile food and energy sectors, is expected to rise by 2.9% year-over-year. This is slightly higher than the 2.8% increase seen in June.
NVIDIA's results are expected to serve as an indicator of whether it is a good time to buy tech stocks. Recently, OpenAI CEO Sam Altman publicly pointed out that there is a bubble in the AI industry, stating that "the value of AI companies is already at an uncontrollable level." NVIDIA's earnings could provide an answer to the bubble theory spreading throughout the AI industry.
On the 22nd, Jensen Huang, CEO of NVIDIA, told reporters ahead of his visit to TSMC in Taiwan, "We are in talks with the United States government regarding the supply of a follow-up chip to the H20 chip for China," adding, "It is too early to know (whether supply will happen)." NVIDIA has been selling its lower-spec AI chip, the H20, designed for the Chinese market in compliance with U.S. government regulations. With considerable uncertainty surrounding NVIDIA's future earnings, guidance for the upcoming period has become more important than ever in this earnings announcement.
New York = Shin-Young Park, Correspondent nyusos@hankyung.com
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