News Recap • Week 47 2024

We had a relatively quiet week in the financial markets with Nvidia’s earnings report arguably the main event. Inflation data from Europe showed a slight uptick but remained close to target while the upcoming Trump administration stayed in the headlines with some new picks and a couple of dropouts.

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Market recap

Equities

• 🇺🇸 S&P 500 rose incrementally throughout the week to finish 1.68% higher and recover most of last week’s 2.08% loss.
• 🇺🇸 Nasdaq Composite marginally outpaced the S&P 500 with a 1.73% gain despite being dragged down by Alphabet (-4.48%) and Amazon (-2.71%).
• 🇪🇺 STOXX 600, the broad European index, gained 1.06% to snap a 4-week losing streak. It was actually up a full 2.6% intraweek from the bottom on Tuesday.
• 🇬🇧 FTSE 100 rallied 1.38% on Friday and 2.46% for the week. This was the best week for the UK index since May.
• 🇯🇵 Nikkei 225 lost 0.93% for the week as it continues to struggle.
• 🇨🇳 Hang Seng declined 1.01% to its lowest level since China’s massive stimulus initiatives were announced in September.
• 🇨🇳 CSI 300 dropped 2.6% for the week after a 3.1% decline on Friday.
• 🇮🇳 Nifty 50 rose 1.59% after a 2.39% jump on Friday for its best week since September, shortly before it peaked and began the correction that’s been in place ever since.

Currencies & Commodities

• The DXY rose 0.77% to 107.490, its highest level since November 2022. The dollar index has strengthened by more than 7% during eight straight weeks of gains.
• USD.EUR gained another 1.16% to 0.96, bringing the US dollar and euro close to parity. The only time in the past 22 years where 1 dollar was worth more than 1 euro was for around two months in late 2022.
• USD.DKK rose 1.1% and is now well above 7 DKK at 7.155.
• Gold jumped 5.97% for its best week since March of last year. The move erased most of the past three weeks’ losses, putting gold within 3% of its record high.
• Crypto had another stellar week with the total market value gaining 8% as of Sunday evening (CET). Bitcoin got within a whisker of the massive $100k milestone, topping out at $99,860 on Friday and gaining more than 7% for the week. Solana rose almost 4% while Ethereum saw a rare outperformance, gaining 8% for the week.

Other

• The 10-year US treasury yield fell 0.83% to 4.404 while the 2-year managed to gain 1.67% to 4.379.

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Nvidia earnings

Nvidia’s earnings report was arguably the highlight of the week. The stock has been unstoppable, up more than 180% for the year and 1,200% since the bottom in late 2022.

Before every earnings release for at least the past year, analysts have been wondering if the company could continue to beat expectations and raise its guidance. So far, it’s managed to do so.

But with every release and optimistic comment from Nvidia CEO, Jenson Huang, the bar has been raised a little more.

So how did Nvidia do this time? Here are some highlights for the concluded third quarter.

• Revenue: $35.08 billion vs $33.16 billion expected
• Earnings per share: 81 cents vs 75 cents expected

Revenue rose an impressive 94% on an annual basis. However, that’s still a significant (albeit fully expected) slowdown from the previous three quarters where sales rose 122%, 262%, and 265% respectively.

As always, investors are more interested in what’s lying ahead and Q4 revenue in particular was in focus. The company raised its guidance to $37.5 billion, outpacing the $37.08 billion expected. However, according to Mizuho analyst Jordan Klein, the Q4 revenue ‘whisper number’ (i.e., top investors’ own expectations) was actually closer to $40 billion.

These investors seemed to have their minds eased when the company cited supply constraints rather than slowing demand though. In fact, Nvidia expects to have several quarters where demand exceeds the supply of both of its two main chips, Hopper and Blackwell. In other words, the company might be able to generate $40 billion in revenue if only they can produce enough chips.

The stock closed slightly positive on Thursday after some intraday volatility. It did give up 3.2% on Friday though, which just brought it back to unchanged for the week. All in all a strong performance for a stock that’s basically tripled in a year.

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Inflation uptick in Europe

The annual inflation rate in the eurozone rose to 2% in October, hitting the ECB’s target. The rate was up from 1.7% in September but down from 2.9% a year earlier.

Looking at the European Union as a whole, the annual inflation rate rose to 2.3% from 2.1% a month earlier. The rate is down significantly from its 3.6% print a year ago though.

In the UK, inflation jumped from 1.7% in September to 2.3% in the latest October reading. The rate was slightly above the 2.2% forecast. Core inflation came in at 3.3%, also slightly higher than expected. The uptick makes it very unlikely that the Bank of England will make another rate cut at its next meeting in December.

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More Trump picks

Donald Trump had another busy week with multiple new picks for his upcoming administration. Here are some highlights

Perhaps most notably, he picked Howard Lutnick, CEO of financial services company Cantor Fitzgerald, to be his Commerce Secretary. He will lead the administration’s trade and tariff agenda, according to a statement from Trump. Lutnick is also a known Bitcoin bull and directly engaged in the crypto industry through his role at Cantor Fitzgerald.

Next up, we have the Treasury Secretary position. After some days of intense speculation, Trump formally picked Scott Bessent, founder of macro investment firm Key Square Group.

And yes, this was yet another pro-crypto pick. Bessent said the following in an interview in July: "I have been excited about the president’s [Donald Trump] embrace of crypto and I think it fits very well with the Republican Party, crypto is about freedom in the crypto economy is here to stay…”

Lastly, Donald Trump picked TV personality Mehmet Oz, aka Dr. Oz, to run the Centers for Medicare and Medicaid Services. He would be reporting directly to RFK Jr. if both are confirmed for their new roles.

Gaetz and Gary out

Another headlines this week was that Matt Gaetz withdrew from consideration for the US Attorney General position. Donald Trump had picked him for the position just a few days prior but the decision came under a lot of pressure due to sexual misconduct charges against Gaetz.

Perhaps the most celebrated news in the crypto community this week was Gary Gensler’s resignation. He will end his term as SEC chair by January 20, 2025 after having been at the job since 2021.

Gary Gensler is arguably best known for his controversial and hostile stance on crypto. Case in point, Donald Trump received his biggest applause at the Bitcoin Nashville conference when stating that he would fire Gensler on day one as president. Now he won’t get that chance, unfortunately.

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In other news

Macro

• US consumer sentiment improved less than previously estimated when the index was revised down from 73.0 to 71.8 for November. Economists had expected the number to be revised upward to 73.7. However, the 71.8 reading was still higher than the 70.5 recorded in October.
• The US Composite PMI (Purchasing Managers Index) rose to 55.3 in November from 54.1 in October, showing that the private sector continues to expand an an accelerating pace. Anything above 50 means expansion. Services PMI rose from 55 to 57 while the Manufacturing PMI ticked up from 48.5 to 48.8.
• US home sales rose by 2.9% in October compared with last year, logging the first year-over-year gain since July 2021. The national median sales price simultaneously rose 4% to $407,200.
• The US national debt surpassed $36,000,000,000,000 (aka 36 trillion US dollars) for the first time ever.
• UK retail sales volumes lost 0.7% month-on-month in October. Economists had expected a 0.3% decline. The number rose 0.1% in September.
• The German economy grew just 0.1% in the third quarter, less than the preliminary reading of 0.2%.
• The latest inflation reading in Japan showed 2.3% in October for both the headline and core readings. Headline was down from 2.5% in September and at the lowest level since January. The core reading was slightly higher than the 2.2% expected among economists. The market is currently pricing in a slightly higher than 50% chance of a 25 basispoint rate hike by the Bank of Japan at its December meeting.
• The Japanese government seems to approve an $87 billion economic stimulus package including measures that will raise the income limit, reduce gasoline taxes, and more.
• VanEck officially backed Donald Trump’s idea of making Bitcoin a strategic reserve asset of the US. This came on the heels of BlackRock reportedly doing the same.

Companies

• The DOJ recommended that Alphabet sell off its Chrome browser as part of the antitrust case. It seemed to spook the market which sent the stock down 6.5% in two days following the news. However, Alphabet is all but guaranteed to appeal the case if a divestiture is actually ordered. It may drag out for years before it’s settled. And by then, Alphabet may get off the hook with some minor product adjustments and a fine. It’s all speculation for now, but many big investors say to buy the dip.
• Trump Media is in “advanced talks” to buy Bakkt, a cryptocurrency trading firm created by Intercontinental Exchange who owns the New York Stock Exchange. Bakkt (BKKT) soared 162% on Monday after the news broke. Trump Media & Technology Group (DJT) jumped almost 17%.
• Options on BlackRock’s iShares Bitcoin Trust (IBIT) began trading on Tuesday, giving traders a new way to speculate on the volatility of BTC. The options saw 73,000 contracts traded in the first hour.
• Elon Musk’s xAI is reportedly raising up to $6 billion at a $50 billion valuation.
• Comcast is moving forward with its plans to spin off its cable networks, including CNBC, MSNBC, and E!. The process is expected to take about a year.
• Spirit Airlines filed for bankruptcy protection as it battles to renegotiate $1.1 billion in debt payments due next year.
• Amazon announced a $4 billion investment in AI startup Anthropic, bringing its total investment up to $8 billion.

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Earnings

• Walmart reported on Tuesday before the market opened, beating on both the top and bottom lines. EPS came in at 58 vs 53 cents expected on revenue of $169.59 vs $167.72 billion expected. Walmart also raised its guidance for net sales growth from between 3.75% and 4.75% to between 4.8% and 5.1%. Investors liked the report and sent shares higher by 3% on Tuesday.
• Target delivered a very different story than Walmart. Earnings per share came in at just $1.85, much lower than the $2.30 expected. Revenue was a slight miss as well at $25.67 billion vs $25.90 billion expected. The company also lowered its full-year EPS guidance to between $8.30 and $8.90, well below the $9 to $9.70 range shared in August and the $9.55 expected by analysts. The stock plummeted more than 20% after the report on Wednesday.
• Snowflake had its best day since it went public in 2020, rocketing more than 32% after reporting on Thursday. Earnings per share came in at 20 cents vs 15 cents expected on $942 million in revenue vs $897 million expected.

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