Wall Street closed with a mixed sign this Monday (Dow Jones: -0.48%; S&P500: +0.17%; Nasdaq: +0.46%), with the Nasdaq leading purchases thanks to boost of artificial intelligence (AI). This at the beginning of a month of November that, traditionally, is usually bullish for equities. «Among the factors driving this trend are the de-escalation in trade tensions between the United States and China and the solid results of some technology companies,» says Kathleen Brooks, research director at XTB. Likewise, as the expert comments, technology continues to boost US stocks. «Third-quarter earnings reports were mixed for Big Tech: Amazon, Apple and Google all reported positive data, while results from Microsoft and Meta were not as well received.» «AI spending was the focus of this earnings season. Would the $600 billion that the AI giants committed to investing in this sector be justified? The answer is yes. Both Meta and Amazon posted record quarterly revenues; However, record levels of capital expenditures are eating into the free cash flow of Meta, Google and Microsoft. The 12% drop in Meta’s share price last week indicates that investors are taking a more nuanced approach to the AI giants and analyzing their spending plans more closely than ever before,» Brooks adds. Still, Nvidia’s market capitalization has reached a record of 5 trillion dollars. «If hyperscalers invest, they will buy Nvidia chips, virtually guaranteeing strong revenues for the GPU maker for the foreseeable future. This is what investors love to see, and Nvidia is now worth more than the UK economy«remarks this strategist.
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From a macro point of view, this Monday they announced the October Manufacturing PMI and ISMwhich have shown a new contraction of the sector. However, the big reference of the week will come on Wednesday with the publication of the private employment data prepared by the consulting firm ADP. The market discounts that it shows the creation of 24,000 new payrolls in the tenth month of the year after the destruction of 32,000 jobs in September. «As the US government shutdown persists, nonfarm payrolls unlikely to be released this week. This means that we could miss the latest US labor market report, scheduled for this Friday, for the second consecutive month,» says Brooks. In this sense, for market analyst Manuel Pinto, «The next US economic data will be analyzed with a magnifying glass after the Federal Reserve (Fed) cut interest rates by 25 basis points. But if the government shutdown continues, this means that official data, including key US employment figures, will remain unpublished. «While this has not stopped the Fed from cutting interest rates or the stock market from reaching new all-time highs, If the shutdown extends beyond this week, it will become the longest in history. This is significant, as the lack of economic data could begin to limit the central bank’s monetary policy. In fact, Some FOMC members have already adopted a more restrictive stancewhich negatively influenced the general market mood at the end of last week,» Brooks underlines.
COMPANIES AND OTHER MARKETS
At the business level, iren has shot up 11.52% after reaching a agreement with Microsoft to provide the technology giant Nvidia GPU GB300 for five years 9.7 billion dollars. For its part, Nvidia shares are up 2.17% after the US Government has granted a license to Microsoft to export its chips to the United Arab Emirates. It has also made strong progress Amazon (+4.00%)after your cloud infrastructure service, Amazon Web Services (AWS), has announced a deal valued at $38 billion with OpenAI so that the creator of ChatGPT can access the computing capacity of Amazon’s servers. In other markets, oil West Texas has risen 0.02% ($60.99) and the Brent has advanced 0.09% ($64.83). For his part, the euro has depreciated 0.13% ($1.1519), and the ounce of gold has gained 0.71% ($4,025). Furthermore, the 10-year American bond yield has risen to 4.108% and the bitcoin has lost 2.88% ($106,846).