US EARLY MORNING: US equity futures are higher ahead of PMIs and earnings from AI bellwether Nvidia (NVDA)

US PRE-MARKETS: US equity futures are higher and Treasury yields are narrowing ahead of PMI data today, as well as earnings from AI bellwether Nvidia (NVDA), which is due to report results after the close (primer below), all ahead of the Jackson Hole Economic Symposium, which kicks off on Friday. In Europe, the PMI data has been disappointing expectations, with Germany’s services gauge slipping below 50.0 and its composite measure being dragged lower; in France the services PMI also missed expectations; the Eurozone measures saw lower-than-expected Services and Composite data. The soft German data triggered a rally in Bunds, and Treasuries have followed in sympathy, with US yields backing away from the near 16-year highs seen this week along some parts of the curve. The Dollar Index is a touch above neutral as the EUR suffers. Crude futures are lower on a mix of a smaller-than-expected inventory draw reported by the API, while Turkey said that an agreement has been reached to resume the flow of oil from the Iraqi-Turkish pipeline.

PRIMER - NVIDIA (NVDA) EARNINGS (AMC WEDNESDAY): Traders will be eying results from AI bellwether Nvidia (NVDA), which are due after the US close today (earnings expectations can be accessed here). The general theme in news reports ahead of the earnings release has been focusing on the surge NVDA's shares have seen this year, where it is up over 200%. The suggestion is that the bar to surprise is extremely high, and after it posted a hefty surprise last quarter, many are sceptical that this may be repeated. That said, HSBC argues that despite the high expectations surrounding the stock, its full potential into the second half of 2024 and into 2025 has not yet been fully priced. "Although market expectations have clearly risen for Nvidia and the overall AI supply chain, we expect bullish AI server momentum continued to surpass market expectations YTD," adding that it continues to see strong demand that continues to outpace supply, especially with regard to AI GPU shipments. "We believe this will continue to be the case going into FY25e especially as the market has better visibility over US CSP cloud 2024e CAPEX expectations by late 4Q23."

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23 Aug 2023 - 09:30- Data- Source: Newsquawk

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