Nvidia's Earnings May Swing the Stock Market This Week. Here's How to Hedge It, BofA Global Says
Put options on the S&P 500 offer better protection than Nvidia-based hedges against earnings risk, BofA Global Research says. An early August rout in the U.S. stock market and the Federal Reserve's economic symposium in Jackson Hole, Wyo., last week have stolen the spotlight from Nvidia Corp.'s upcoming earnings. Investors used to the company's blockbuster results may underprice the risk of a disappointment and its impact on the broader market, according to BofA Global Research."Don't sleep on Nvidia's earnings, [which are] a consistent driver of the S&P 500 returns and still a risk to markets if they disappoint," a team of BofA Global analysts led by Gonzalo Asis, an equity-linked analyst, said in a Sunday note.The quarterly earnings results for Nvidia , the poster child of the artificial-intelligence theme, have been a key driver of short-term stock-market performance since January 2023, Asis and his team said. The chart below shows that the reaction of Nvidia's stock to earnings is