Daily Markets: Apple, Alphabet, and Nvidia Make AI Waves

Today’s Big Picture

Asia-Pacific equity markets finished the day modestly up across the board except for Japan’s Nikkei which jumped 2.67% in anticipation of this week's Bank of Japan (BOJ) meeting and yet another bout of Yen weakness. Taiwan’s TAIEX rose 1.00%, China’s Shanghai Composite gained 0.99%, South Korea’s KOSPI added 0.71%, India’s SENSEX advanced 0.14%, Hong Kong’s Hang Seng closed 0.10% higher, and Australia’s ASX All Ordinaries ended the day flat, up a mere 0.02%. European markets are mixed in midday trading and US equity futures are mixed as some Dow constituents, most notably Boeing (BA) are coming under renewed pressure.

With little in the way of company earnings and economic data out this morning, the expectation was for a somewhat sleepy morning ahead of today’s GTC keynote by Nvidia (NVDA) CEO Jensen Huang. However, that is not the morning folks will be getting, thanks to reports that Apple (AAPL) is in talks to build Alphabet's (GOOGL) Gemini artificial intelligence engine into the iPhone and Nvidia is in advanced negotiations to acquire AI infrastructure orchestration and management platform Run:ai.

With Apple and Alphabet, indications are Alphabet's set of generative AI models would power some new features coming to the iPhone software this year in a relationship that would extend the Search pact between the two companies.

Nvidia’s interest in Run:ai is simple to see because Run:ai has developed an orchestration and virtualization software layer tailored to the unique needs of AI workloads running on GPUs and similar chipsets. It will be interesting to see what Jensen says about this as well as other announcements tied to his keynote at 4 PM ET dubbed, “Don’t Miss This Transformative Moment in AI.”

Expected items include more details about the company’s B100 chip, potentially its most capable AI GPU yet. We’d bet Jensen will discuss the demand for its chips to back up the company’s recent shoot-the-lights-out guidance, but also its product roadmap. With other speakers ranging from Ford Motor (F), Meta (META), Google, Salesforce (CRM), ServiceNow (NOW), L’Oréal (LRLCF), Goldman Sachs (GS), Lowe’s (LOW), and a host of others over the next few days, the conference will provide more insight to what is unfolding in the AI space.

Data Download

International Economy

China's industrial production expanded by 7.0% YoY in January-February combined, faster than a 6.8% growth in December 2023 and beating market forecasts of 5%. It was the fastest expansion in industrial output in almost two years, boosted by robust activities in manufacturing (7.7% vs 7.1% in December) and utilities (7.9% vs 7.3%). China's retail sales increased by 5.5% YoY in January-February combined, topping the market consensus of 5.2%.

The consumer price inflation rate in the Euro Area was confirmed at 2.6% year-on-year in February, the lowest rate in three months but still exceeding the European Central Bank's target of 2%. The annualized core inflation rate in the Euro Area fell for a seventh straight month to 3.1% in February, the lowest since March 2022, from 3.3% in January, and matching the initial estimate.

Domestic Economy

At 10 AM ET, the March NABH Housing Market Index will be published, and the market expects it to match the February reading of 48.

Markets

Friday saw an unusual pattern as the Russell 2000 was the only broad index to end the day higher, up 0.40%. The Dow declined 0.49%, the S&P 500 fell 0.65% and the Nasdaq Composite closed 0.96% lower. Once again, it was the “big stacks” that ended up pushing the table around as the resident ultra-mega-cap names in Technology (-1.51%), Communication Services (-1.00%), and Consumer Discretionary (-1.00%), and their combined 50% market weight effectively dictated Friday’s outcome. The remaining sectors ranged between -0.40% (Healthcare) and 0.30% (Energy).

Shares of Newell Brands (NWL) ended the day up 5.96% after the company announced the date of its next shareholder meeting where it will have shareholders vote on what looks like the exit of what is described as the “Icahn Group” from the board. Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 2.72%
• S&P 500: 7.28%
• Nasdaq Composite: 6.41%
• Russell 2000: 0.60%
• Bitcoin (BTC-USD): 65.89%
• Ether (ETH-USD): 63.16%

Stocks to Watch

Science Applications (SAIC) is expected to release quarterly earnings before equities begin trading later this morning. Pre-market breadth is healthy today as 257 names in the S&P 500 have traded hands so far this morning with 202 gainers and 55 decliners. Names on the decliners leaderboard include Ingersoll Rand (IR), J.M. Smucker (SJM), and Boeing (BA). There are a number of Technology names lighting up the gainer leaderboard, including Alphabet (GOOG, GOOGL), Tesla (TSLA) (more below), Micron Technology (MU), and Nvidia (NVDA).

Reports indicate that Reddit's (RDDT) initial public offering (IPO) is between four and five times oversubscribed. That level of interest in the shares should help the social media platform reach its goal for a valuation of $6.5 billion. The working price range for the offering is $31-$34 per share, and word is the transaction could price later this week.

Tesla (TSLA) shared that prices in the U.S. will increase by $1K for all Model Y cars on April 1 and Model Y prices would rise across several countries in Europe on March 22 by about EUR 2K or the equivalent in local currencies.

Microsoft (MSFT) is planning to introduce puzzle-based games within its LinkedIn platform.

United Airlines (UAL), Southwest Airlines (LUV), and Ryanair Holdings Plc (RYAAY) are among the companies scrambling to respond to reduced deliveries from Boeing as the plane maker focuses on fixing quality lapses.

Starting March 17, retail giant Target (TGT) implemented modifications to its self-checkout kiosks, imposing limits of 10 items or less at most of its 2,000 stores across the U.S.

Shares of HashiCorp (HCP) rose 12% in after-hours trading on Friday following a report that the cloud software company is evaluating its options, including a sale.

According to Swiss newspaper NZZ, UBS (UBS) Chairman Colm Kelleher is seeking mergers and acquisitions opportunities in the United States in the coming years.

After Today’s Market Close

There are no market-moving earnings reports expected after equities stop trading today. Those looking for more on upcoming quarterly earnings reports should head on over to Nasdaq’s Earnings Calendar.

On the Horizon

Tuesday, March 19

• Eurozone: ZEW Economic Sentiment Index - March
• US: Housing Starts & Building Permits - February

Wednesday, March 20

• UK: Inflation Rate, Producer Price Index - February
• Eurozone: Consumer Confidence (Flash) - March
• US: Weekly MBA Mortgage Applications
• US: FOMC Rate Decision -

Thursday, March 21

• Eurozone: New Car Registrations - February
• Eurozone: HCOB Flash Manufacturing & Services PMI - March
• UK: S&P Global Flash Manufacturing & Services PMI - March
• UK: Bank of England Interest Rate Decision
• US: Weekly Initial & Continuing Jobless Claims
• US: S&P Global Flash Manufacturing & Services PMI - March
• US: Existing Home Sales - February
• US: Leading Indicators - February

Friday, March 22

• UK: Retail Sales - February

Thought for the Day

"It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all - in which case, you fail by default." —J.K. Rowling

Disclosures

• Nvidia (NVDA) is a constituent of the Tematica BITA Digital Infrastructure & Connectivity Index
• Apple (AAPL),Microsoft (MSFT) are constituents of the Tematica Research Thematic Dividend All-Stars Index

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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