NVDA saved by PCE Inflation Report ?
On Thu, 27 Feb 2025, both Dow and S&P 500 was climbing up & falling down, back & forth until it ran out of steam and closed lower.
Nasdaq was trading “lower” sideways throughout the day until closer to 4pm, it gave up and dipped too. (see below)
By the time US market closed:
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DJIA: -0.45% (-193.62 to 43,239.50).
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S&P 500: -1.59% (-94.49 to 5,861.57). Turned negative for 2025.
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Nasdaq: -2.78% (-530.84 to 18,544.42). Logs worst day in a month.
Market's jitters came:
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Ahead of a closely awaited inflation update on Fri, 28 Feb 2025.
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With rising concerns about Trump's confirmed tariffs against Canada, Mexico will commence on 04 Mar 2025 as per original schedule, instead of earlier reported pushed back to April 2025.
Thursday also saw two economic reports released:
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US weekly jobless claims.
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US Gross domestic product (GDP) for Q4 2024 2nd preliminary readings.
US Weekly Jobless Claims.
For week ending 22 Feb 2025, US weekly jobless claims jumped 22,000 to a seasonally adjusted 242,000, making the increase was the biggest since October 2024.
Economists polled by Reuters had forecast 221,000 claims for the latest week, off by +21,000.
Analysts have attributed the increase to result of snowstorms in many parts of the country. The data also included the Presidents' Day holiday, which could have injected some volatility.
As for workers made redundant by Trump’s DOGE, no signs yet that mass layoffs of federal government employees were boosting claims.
However, all that could change in the coming weeks as more workers are fired.
Thankfully, state unemployment claims continue to signal no material shift in labour market conditions.
The 4-week moving average of claims, considered a better measure of labor market health as it irons out week-to-week volatility, increased 8,500 to 224,000 last week. (see below)
US weekly jobless claims - 4 week average
Historically low layoffs keep economic expansion on track, giving the Fed sufficient room to keep interest rates unchanged as policymakers monitor the possible economic impact of the Trump administration's fiscal, trade and immigration policies, that are viewed by many economists as inflationary.
US Gross Domestic Product.
For Q4 2024, real gross domestic product (GDP) increased at an annual rate of just 2.3%, according to the second estimate. (see above)
Latest estimate was consistent with the forecast and is slower than Q3 2024 final estimate of 3.1%.
Main takeaway from this report is domestic demand has “soften” somewhat heading into 2025.
As the above two economic reports were released one hour before US market opened, they probably made an already nervous market, even more jittery.
Hero Did Not Arrive.
On Thu, 27 Feb 2025, Nvidia's stock experienced significant downward pressure despite reporting better-than-expected quarterly earnings.
The chip maker shares fell approximately -5% in intraday trading, closing down $120 by the time 4pm came around.
This decline contributed to Nvidia's challenging start to 2025, with the stock down about -13.13% YTD.
Many attributed it to investors’ “unrealistic” expectation of a repeated 2023 earnings performance that helped Nvidia tripled in value.
Yesterday, Nvidia's market capitalization also fell below the $3 trillion mark, following the decline that erased approximately $273 billion in market value.
Despite this (hopefully) temporary setback, Nvidia remained the 2nd most valuable US tech company, behind Apple and ahead of Microsoft
Analysts remained bullish on Nvidia's long-term prospects, with some raising their price targets based on the company's strong outlook and continued dominance in the AI chip market.
However, short-term concerns about (a) export controls, (b) tariffs, and (c) potential slowdowns in growth appeared to weigh on investors’ sentiments.
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Do you think Nvidia is still a long term buy ?
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Do you think US market will continue to pullback in the short term given 04 Mar 2025 tariff is just next week ?
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