Week Ahead on Wall Street: Semi-Soft Chips

The Biggest Thing in Earnings

Over 92% of S&P 500 companies have already reported results in this earnings season, but one blockbuster report is left, and it’s arguably the most anticipated release of the whole season: NVIDIA.

Here’s why: The chipmaker is the primary provider of chips used by the hyperscalers (such as Amazon’s AWS or Google Cloud) and other technology companies. That means NVIDIA’s results will give us possibly the best update on the chip industry and the state of the burgeoning artificial intelligence world, which needs chips to work.

Strong results and upbeat guidance would likely reinforce optimism around the AI revolution and its transformative potential impact across industries. But any signs of cooling demand or competitive pressures could trigger a pullback in parts of the market. Emphasis on parts of the market: Any fallout from iffy results won’t be shared equally across all stocks.

The AI theme has delivered strong returns this year, but this earnings report also comes at an interesting time for other reasons. For one, we just had an election, and with a change in government comes a different policy outlook. NVIDIA’s C-suite views on the outlook under the coming administration will surely be dissected.

Economic and Earnings Calendar

Monday

• November New York Services Activity: The Federal Reserve Bank of New York’s survey of manufacturing executives in the region on business conditions and their outlook.

• November NAHB Housing Market Index: This index tracks how homebuilders feel about the current and future state of the single-family housing market.

• Fedspeak: Chicago Fed President Austan Goolsbee will give welcome remarks at the annual Financial Markets Group conference.

Tuesday

• October Building Permits and Housing Starts: Construction data is a leading indicator of economic activity.

• Earnings: Jacobs Engineering Group (J), Keysight Technologies (KEYS), Lowe’s Companies (LOW), Medtronic (MDT), Walmart (WMT)

Wednesday

• Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

• Fedspeak: Atlanta Fed President Raphael Bostic will participate in a moderated conversation on the economic outlook.

• Earnings: NVIDIA (NVDA), Palo Alto Networks (PANW), Target (TGT), TJX Companies (TJX)

Thursday

• November Philadelphia Fed Manufacturing Activity: The Philadelphia Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• October Leading Economic Index: This is an index composed of various economic indicators that have historically led changes in the broader economy.

• October Existing Home Sales: Most home transactions in any given month tend to come from the existing market, and as a result set the tone for the broader housing market.

• November Kansas City Fed Manufacturing Activity: The Kansas City Fed’s survey of manufacturing executives in the region on business conditions and their outlook.

• Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

• Fedspeak: Cleveland Fed President Beth Hammack will give welcome remarks at the 2024 Financial Stability Conference. Chicago Fed President Austan Goolsbee will take part in a moderated Q&A with the Central Indiana Corporate Partnership. Beth Hammack will moderate a conversation with the Director of the Federal Housing Finance Agency.

• Earnings: Copart (CPRT), Deere & Company (DE), Intuit (INTU), NetApp (NTAP), Ross Stores (ROST)

Friday

• November S&P Global US PMIs: These indexes track how purchasing managers across different industries feel about the business environment.

• November University of Michigan Consumer Sentiment: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on inflation and its trajectory.

• November Kansas City Fed Non-Manufacturing Activity: The Kansas City Fed’s survey of services executives in the region on business conditions and their outlook.

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