NVIDIA consolidating
The major US stock indices ended higher yesterday, breaking three days of back-to-back losses from the middle of last week. The mid-cap Russell 2000 failed to join in however, ending Monday’s session down 0.7%. All the US indices were weaker this morning, but picked up as the day wore on. Investors are likely to sit on their hands now during the two-day Fed meeting which ends tomorrow. There’s virtually no chance of the Fed announcing any change to interest rates at this meeting. But its accompanying statement, its quarterly Summary of Economic Projections and Fed Chair Powell’s subsequent press conference all offer up opportunities for the US central bank to provide insight into its current thinking. The concern is that, following last week’s disappointing inflation releases, the Fed may indicate that it is pushing out further the timing of its first rate cut since March 2020. This could also see it revise downward its projections for how many cuts we may see this year.
The June meeting is currently the favourite for the first cut, and there’s no doubt that there will be plenty more inflation updates, along with other significant data releases, which will help give a clearer picture about the state of the US economy before then. But a shift towards September can’t be ruled out. In addition, analysts will be listening out for any changes the Fed may make to its balance sheet reduction programme.
Yesterday, NVIDIA hosted a tech conference where it announced the production of its newest and most powerful AI chip, Blackwell. Investors seemed underwhelmed, and the company lost around 1% in after-hours trading. But like the broader market, the stock turned higher later in the session. The 4-hour chart, as shown above, suggests that the stock is currently consolidating after its latest long rally, and investor appetite remains positive for now. It appears to be forming a pennant, although currently there are too few touch points on both the top and bottom lines for this to mean anything significant as yet. But often, although certainly not always, a pennant breakout resolves in the direction of the earlier trend. Maybe tomorrow will bring a resolution.
The June meeting is currently the favourite for the first cut, and there’s no doubt that there will be plenty more inflation updates, along with other significant data releases, which will help give a clearer picture about the state of the US economy before then. But a shift towards September can’t be ruled out. In addition, analysts will be listening out for any changes the Fed may make to its balance sheet reduction programme.
Yesterday, NVIDIA hosted a tech conference where it announced the production of its newest and most powerful AI chip, Blackwell. Investors seemed underwhelmed, and the company lost around 1% in after-hours trading. But like the broader market, the stock turned higher later in the session. The 4-hour chart, as shown above, suggests that the stock is currently consolidating after its latest long rally, and investor appetite remains positive for now. It appears to be forming a pennant, although currently there are too few touch points on both the top and bottom lines for this to mean anything significant as yet. But often, although certainly not always, a pennant breakout resolves in the direction of the earlier trend. Maybe tomorrow will bring a resolution.
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