💸 US Stock Market Goes Crazy After Nvidia Announces Earnings

🐺 Hi pack-mates,

This is Howling Markets, the newsletter that works after-hours to provide all the interesting news in a timely manner!

Today we will be covering:

• Education: What Are Extended Trading Hours? 🕒

• Japan’s Stock Market Surpassed Its Record High After 34 Years! 🚀

• US Stock Market Goes Crazy After Nvidia Announces Earnings 💸

• Equity and Debt Markets Daily Update ⚖️

• And more!

Market Watch 👀

What Are Extended Trading Hours?

Trading the markets can be a passion, an addition and sometimes even a necessity. Imagine having the need to immediately sell some shares because an emergency happened, but the markets are closed. What do you do?

Well, fortunately, most markets offer extended trading hours which are composed of two additional sessions, one before the market opens and one after it closes, where it is possible to buy and sell your positions.

In the US, the trading session before the market opens is called “pre-market”  and usually goes from around 7 am to 9:25 am US Easter Time.

On the other hand, the session after the market closes is called “post-market” or “after-hours” and usually starts at 4:05 pm and ends at 8 pm US Eastern Time.

However, it is important to know that trading during extended trading hours occurs through Electronic Communication Networks (ECNs), which are automated systems that automatically match buy and sell orders, so the extended trading hours might depend on the activity of the ECNs.

Additionally, despite being extremely useful to have such an opportunity, extended hours trading can be particularly risky as the session is characterized by extremely low volatility and less market participants.

These conditions induce wider spreads and higher price volatility, so these sessions are rarely used by traders and are mainly convenient to investors interested in closing or opening a position expecting a strong move during the next regular trading session.

Japan’s Stock Market Reaches Its Record High After 34 Years!

Today’s newsletter will be an all-around positive edition full of great news. Not only, as we will shortly see, Nvidia published returns out of this world, but also Japan is finally starting to show some signs of strength.

Over the past newsletters we have been discussing how Japan had been struggling with deflation for almost two decades, however, we have also mentioned that Japan’s central bank announced that they started seeing some signs of strengthening and that they were almost ready to start hiking rates.

Well, today, for the first time in 34 years, the Japanese Nikkei 225 index (Ticker: NKY) surpassed its all-time high previously set on the 29^th of December 1989.

Since the faithful date, the index first slid over -80% after the dot com bubble before slightly recovering. Then, the Nikkei 225 fell once again when the Great Financial Crisis rolled around, extending the total loss to -81.59%, reached on the 10^th of March 2009.

However, from the second the Great Financial Crisis had passed, the price kept climbing without any major hiccups, and in a matter of 15 years the index gained over 450%, setting a new all-time high on Thursday, the 22^nd of February 2024.

Today’s Howling Question

And now, it is time for our howling question!

We all know that Nvidia has had a stunning performance over the last couple of years, but what if we extend the time horizon to 5 years? By how much would have your Nvidia position appreciated if you would have bought a share on the 23^rd of February 2019?

a) +500%

b) +1,900%

c) +3,600%

d) +4,200%

e) +5,100%

Try to answer the question by yourself, and then check the correct answer after the last interesting news!

US Stock Market Goes Crazy After Nvidia Announces Earnings

On Wednesday, one hour after the market closed, Nvidia released its Q4 earnings and its share price went ballistic during after-hours trading.

Nvidia, the main driver of the 2024 US market rally, has reported a 265% increase in revenues with respect to 2022 thanks to the surge in popularity of generative AI.

Nvidia’s CEO commented on the results by stating that “Accelerated computing and generative AI have hit the tipping point” and that he is expecting a continued increase in demand for Nvidia’s products.

Nvidia was founded in 1993 as a producer of graphics cards for computer games, however it slowly became a proxy for AI development thanks to its H100 graphics card. The H100 became the industry standard for AI development thanks to its ability to process large amounts of data, making it a perfect product to develop Generative AI, the artificial intelligence that understands and generates text, images, and videos.

The importance of Generative AI, and the H100 graphics card, surged with the advent of ChatGPT and it continued to increase as most tech giants dived head-first into this new niche. For example, Meta has recently announced that they will increase their stock of H100 chips to 350,000 in 2024.

Now, the tricky situation for Nvidia is to keep their competitive advantage and their superior performance even with hundreds of competitors trying to steal market shares and produce similar chips. 

To do so, Nvidia has produced another card, the B100, which is expected to launch in the second half of 2024. This new chip is going to be the top-end of Nvidia’s GPUs, developed specifically for Generative AI and for High-Performance Computing (HPC). 

Thanks to all these great news, and its stellar performance, Nvidia’s net profits jumped by 770% in 2023, causing the price to open with an exception gap up of +11.19%. Then, the price continued to restlessly climb throughout the trading session, closing the day up +16.4% higher. Do you think that the company will be able to keep up with the same growth rate in 2024?

Equity and Debt Markets Update

And now, our daily markets update!

Thursday has been an extraordinary day for the stock market, with the MVP being Nvidia stock. On the 22^nd of February not many large cap stocks announced their earnings, so all eyes were on Nvidia and the announcement of its exceptional earnings and an expected increase in demand.

The prospect of higher AI demand not only pushed higher the price of Nvidia, but also of all other tech companies, helping the market close +2.11% higher after opening with a +1.14% gap up, demolishing last week’s all-time high.

On the other hand, the bond market’s trading session has been the exact opposite. Despite slightly moving both higher and lower during the day, the price remained almost still, and it only gained +0.19%.

Answer

The correct answer is b) +1,900%.

Nvidia’s performance has been outstanding, gaining +1864.99% over the last 5 years. However, it is important to mention that this extreme performance has been boosted quite a lot by Thursday’s trading session as the 5-year performance ending on Wednesday was “just” +1587.33%.

Howl-Worthy Memes 😂

🐺 See you next time!

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