![The Nvidia logo on the side of a building.](https://assets.cmcmarkets.com/images/NVIDIA--2154045576--1200px1.jpg)
"Priced for perfection" refers to stocks that investors have set high expectations for, making it easier to disappoint than impress. Nvidia might be at that point. Despite beating earnings and raising guidance, its stock dropped 6.89% because the guidance still fell short of investor expectations. Management remained optimistic on the earnings call, downplaying concerns about the production of its new Blackwell chips.
But perhaps there are elephants in the room that aren’t being addressed. The firm’s third largest customer, Super Micro Computer, announced yesterday that it was delaying publication of its own annual report, following claims of dubious accounting practises at the firm. SMCI US fell by almost 20% in the regular session and then another 7% after hours.
The negative sentiment carried over into Asia, with tech stocks in South Korea and Hong Kong trading lower as Swiss Bank UBS cut its forecast for Chinese economic growth in 2024 and 2025, citing a bigger-than-anticipated slump in the property market.
The S&P 500 lost 0.6% yesterday, with the information technology sector falling by 1.3% ahead of Nvidia’s earnings release. The percentage of stocks in the S&P 500 information technology sector that traded above their 5-day moving average (a gauge of short-term sentiment and market momentum) almost halved on the day, falling to 31.34%.
The Nasdaq 100 finished the day down by 1.18%. Declining volume outpaced gainers by as much as 4:1 on the Nasdaq yesterday and trade on the NYSE was more balanced, but even here the ratio was 2.5:1 in favour of the sellers.
Major European indices were mostly up on the day, with the Italian MIB adding 0.60%, the DAX finishing up by 0.50% and the Euro Stoxx 50 up 0.30%.
European and UK natural gas prices rose again this morning, up 15.60% and 11.82% respectively over the past month. This trend is important to watch as autumn approaches, especially since fuel bills are a major political issue in the UK.
Gold has moved above $2,510 per ounce this morning, trading up 0.39% in Europe. Silver has added 1.35% though it remains below $30 an ounce.
US 10-year treasury bond yields are largely unchanged and on the foreign exchanges there are further gains for both the Kiwi and Aussie dollars against the US dollar this morning.
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