US Market reels from Job Data. NVDA to the rescue?
On Thu, 03 Oct 2024 another jobs report- the US weekly jobless claims was published.
It did little to restore calm to the US market.
Instead, US market slipped lower (marginally) from Wednesday’s closing.
By the time market closed : (see above)
DJIA: -0.44% (-184.33 to 42,011.59).
S&P 500: -0.17% (-9.60 to 5,699.94).
Nasdaq: -0.04% (-17,918.48).
US Weekly Jobless Claims.
The number of Americans filing new applications for unemployment benefits rose marginally for the week ending 28 Sep 2024.
Some analysts have attributed the rise to:
Hurricane Helene’s rampage in the US Southeast.
Strikes at (i) Boeing and (ii) ports, may have distorted the labour market picture in the near term.
According to the Labour Department, US weekly initial jobless claims registered 225,000 applications, an increase of +6,000 from previous week’s claims of 219,000.
With the latest data set:
The 4-week moving average came up to be 224,250, a drop of 750 from previous week’s revised average of 225,000.
At the same time, the advance seasonally adjusted insured unemployment rate was 1.2% for week ending 21 Sep 2024, unchanged from the previous week’s revised rate.
Overall, it showed that labour market is gliding at the end of the third quarter.
This could allow the Fed to be in no rush to deliver large interest rate cuts.
Latest CME Group Fedwatch tool has probability (for Novemember FOMC meeting) :
34.7% chance of the Fed cutting interest rate by 50 basis point (-0.5%).
65.3% chance of the Fed cutting interest rate by 25 basis point (-0.25%).
This ties in nicely with what Fed Chair Jerome Powell has indicated this week.
That is policymakers would likely stick with quarter-percentage-point rate cuts going forward, in a nod to US economy's resilience that was confirmed by upward revisions to growth data last week.
Separately, the ISM Services PMI (report) for September 2024, edged higher to 54.9 from August’s 51.5, exceeding market estimates of 51.7 at the same time.
September reading is also the highest level since February 2023.
*Note: A PMI reading above 50 indicates growth in the services sector, which accounts for more than two-thirds (67%) of US economy.
Therefore, US non-manufacturing purchasing manager index has delivered a positive report overall.
Another piece of “good” news of the day has to be Nvidia’s downwards trend seemed to have stalled. (see above)
In an interview with CNBC’s Closing Bell Overtime on Wednesday evening, $NVIDIA Corp(NVDA)$ CEO, Jensen Huang has said - demand for the company’s next generation AI chips “The Blackwell” is “insane”
Blackwell, expected to cost between $30,000 & $40,000 per unit, is in hot demand from companies like:
OpenAI.
Microsoft.
Meta.
Other firms building AI data centers to power products like ChatGPT and Copilot.
What’s more, everybody (customers) wants to have the most (units) and everybody wants to be first to accept delivery.
And just like that with the interview, Nvidia’s stock price rose by +3.37% to $122.85 per share. (see above)
YTD its shares up about +155.03% (as of 03 Oct 2024’s closing).
Resistance and Support.
Based on Thu, 03 Oct 2024’s closing price of $122.85, below are its resistance and support level.
It will help investors decide when to enter (if so wishes):
Pivot point 1st Resistance level (high) - $124.69.
Pivot point 2nd Resistance level (high) - $126.54.
Pivot point 1st Support Point (Low) - $120.67.
Pivot point 2nd Support Point (Low) - $118.50.
Company’s revenue continued to surge:
During fiscal Q2 to $30.04 billion.
This is a +122% YoY.
For upcoming quarter earnings, analysts have forecasted $32.5 billion in sales.
Separately in August 2024, Nvidia’s CFO, Colette Kress has mentioned that it expects to ship several billion dollars in Blackwell revenue in Nvidia’s 4th fiscal quarter.
Rounding up — Jensen said Nvidia plans to update its AI platform yearly to increase performance by 2x to 3x.
With AI technology evolving so quickly, now is the perfect time to invest heavily in innovation, to increase capabilities, increase throughput, decrease costs, decrease energy consumption.
We're already making progress on this, and everything is going according to plan.
So far, Nvidia has been the main beneficiary of the AI boom. Does it look set to continue for another Financial Year ?
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