Daily Markets: Parsing Nvidia’s Announcements, Waiting for the Fed

Today’s Big Picture

Asia-Pacific equity markets finished the day lower except for Australia’s ASX All Ordinaries, which gained 0.41% and Japan’s Nikkei, which rose 0.66% on the heels of the Bank of Japan’s first rate hike in 17 years, putting the target rate at 0.00% to 0.01% from the previous -0.01% target. Taiwan’s TAIEX declined 0.11%, China’s Shanghai Composite fell 0.72%, India’s SENSEX dropped 1.01%, South Korea’s KOSPI gave back 1.10%, and Hong Kong’s Hang Seng closed 1.24% lower in a broad decline led by Health Technology names.

European markets are mixed to modestly higher in midday trading and U.S. equity futures are pointing to a lower open.

The market is digesting the wave of announcements served up by Nvidia (NVDA) CEO Jensen Huang during his GTC keynote late yesterday - see below for more. Based on the pre-market dip in NVDA shares, it appears some were expecting something more. As investors chew through those announcements and contemplate potential implications, the light calendar for today and tomorrow morning means the bulk of investors will be treading water until the Fed makes its latest policy announcement, shares its updated set of economic projections, and Fed Chair Powell fields press conference questions tomorrow afternoon.

Data Download

International Economy

The Bank of Japan raised its benchmark interest rate by 0.1%, marking the end to its negative interest rates policy. This is the first hike in 17 years and marks a historic shift away from a focus on reflating growth with decades of massive monetary stimulus.

The Reserve Bank of Australia held interest rates steady at 4.35%, after raising it by 425 basis points over the past two years.

The ZEW Indicator of Economic Sentiment for the Euro Area increased by 8.5 points to 33.5 in March, the highest snce February 2022. The ZEW Economic Sentiment Index in Germany increased to 31.70 points in March from 19.90 points in February.

Crude oil futures settled yesterday at their highest since late October, as Ukrainian drone attacks on Russian refineries are believed to have idled a significant chunk of Russia's refining capacity, and Chinese industrial production for January-February exceeded expectations. Current gas prices, according to AAA data, are up more than 6% to $3.489 for a gallon of regular gas, putting it slightly ahead of year-ago levels. Entering 2024, the national average for a gallon of gas was $3.09.

Domestic Economy

At 8:30 AM ET, February Housing Starts and Building Permit data will be published. Housing Starts are forecasted to rise to 1.43 million compared to 1.331 million in January, which was impacted by winter weather. Permits for the month are expected to come in between 1.48-1.50 million, bookending the 1.489 million figure for January.

Congressional leaders struck a deal Monday evening on funding the Department of Homeland Security, paving the way for lawmakers to begin processing the remaining spending bills and avert a government shutdown next weekend.

Markets

Gains in Meta Platforms (META) and Alphabet (GOOG, GOOGL) contributed to just under 105% of the gains in Communication Services’ 1.78% rise as that sector was the lone standout yesterday. The remaining sectors saw results ranging from -0.69% (Real Estate) to 0.54% (Consumer Discretionary). Broad indexes were higher except for the Russell 2000, which fell 0.12%. The Dow gained 0.20%, the S&P 500 added 0.63%, and the Nasdaq Composite closed 0.82% higher.

Shares of Tesla (TSLA) saw what has increasingly becoming a rare up day as shares popped 6.25% after it was announced that the EV maker will be raising prices of its Model Y by $1,000 starting April 1. Here’s how the major market indicators stack up year-to-date:

• Dow Jones Industrial Average: 2.92%
• S&P 500: 7.96%
• Nasdaq Composite: 7.28%
• Russell 2000: -0.12%
• Bitcoin (BTC-USD): 61.28%
• Ether (ETH-USD): 53.50%

Stocks to Watch

We have a rather rare morning when there are no market-moving earnings reports expected before equities begin trading. Pre-market breadth is healthy today as 246 names in the S&P 500 have traded hands so far this morning with 117 gainers and 129 decliners, although volumes are pretty light. Names coming under pressure this morning include GE Healthcare (GEHC), Advanced Micro Devices (AMD) (which is the only name seeing significant volume), and Citizens Financial Group (CFG) while Synopsis (SNPS) (more below), Cadence Design Systems (CDNS) and ANSYS (ANSS) (more below) are seeing some support.

Nvidia introduced its new Blackwell GPU platform with 2.5 times the 8-bit floating point power of its Hopper predecessor. CEO Jensen Huang announced several new partners, including Ansys, Cadence Design Systems and Synopsys. Huang also shared Nvidia said Amazon Web Services, Google Cloud, Microsoft Azure and Oracle Cloud Infrastructure will be among the first cloud service providers to offer Blackwell-powered instances, as will NVIDIA Cloud Partner program companies Applied Digital, CoreWeave, Crusoe, IBM Cloud and Lambda.

Samsung Electronics (SSNLF) shared its Samsung Semiconductor AGI Computing Lab, which will be located in the U.S. and South Korea, will initially focus on developing chips for large language models, with a focus on inference — the hosting and supporting of AI models — and service applications.

KLA Corp. (KLAC) made the strategic decision to exit the company's flat panel display business which is part of its PCB, Display, and Component Inspection reporting segment. The company updated its March quarter outlook to EPS of $4.23-$5.43 down from $4.66-$5.86 and the market consensus of $5.29.

Kroger (KR) announced it will sell its specialty pharma business to CarelonRx, a subsidiary of Elevance Health (ELV).

U.S. auto-safety regulators have opened an investigation into a recent fatal wreck involving a Ford Motor (F) SUV that is suspected of having involved the automaker’s advanced driver assistance technology.

Research firm Canalsys forecasts that close to 18% of total personal computer shipments globally, roughly 48 million units, will be AI-capable PCs, and that number is expected to exceed 100 million units, 40% of all PC shipments, by 2025. In 2028, the firm expects vendors to ship 205 million AI-capable PCs, representing a compound annual growth rate of 44% between 2024-2028. Readers will want to note this for Microsoft (MSFT), Intel (INTC), AMD (AMD), and other companies surrounding the PC ecosystem.

Autoworkers at a Volkswagen (VWAGY) factory in Chattanooga, Tennessee filed a petition with the National Labor Relations Board that will allow a vote to join the United Autoworkers Union.

Shares of industrial generative AI company Zapata Computing (ZPTA) are expected to begin trading on the Nasdaq later today.

Dril-Quip (DRQ) and Innovex Downhole Solutions (INVZ) announced a definitive agreement under which Dril-Quip and Innovex will merge in an all-stock transaction to create a unique energy industrial platform.

Clinical-stage oncology company Fusion Pharmaceuticals (FUSN) will be acquired by AstraZeneca (AZN) for a price of $21.00 per share in cash.

IPOs

Readers who want to dig deeper into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page.

After Today’s Market Close

ZTO Express (ZTO) is expected to report quarterly results 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

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

"Even if we don't have the power to choose where we come from, we can still choose where we go from there." —Stephen Chbosky

Disclosures

• AMD (AMD), Intel (INTC), Nvidia (NVDA) are constituents of the Tematica BITA Digital Infrastructure & Connectivity Index
• Microsoft (MSFT) is a constituent 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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Stocks Economy Central Banks Artificial Intelligence