Nvidia Earnings Lift Indexes In the U.S., Germany, France, and Japan to New Record Highs

Barry Adams
22 Feb, 2024
New York City

Benchmark indexes on Wall Street advanced after Nvidia's quarterly results surpassed elevated expectations. 

The S&P 500 index increased 1.6%, and the Nasdaq Composite advanced 2.4%. 

Nvidia said revenue in the fourth quarter soared 265% from a year ago to $22.1 billion, driven by a surge in demand for artificial intelligence-driven applications. 

“Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations,” said Jensen Huang, founder and CEO of Nvidia.

Nvidia's blowout results boosted other semiconductor stocks, and ASML, AMD, TSMC, Intel, and Qualcomm jumped between 2% and 4%. 

Nvidia stock has jumped 61% so far this year and soared 274% in the last 52- weeks of trading. 

Treasury yields edged higher after the latest policy meeting minutes showed that policymakers are worried that lowering the interest rate too soon may prolong higher inflation. 

Initial Jobless claims decreased to 201,000 in the week ending February 17 from 213,000 in the previous week, the U.S. Department of Labor reported Thursday. 

 

Existing Home Sales Rebounded In January 

Existing home sales rose 3.1% from the previous month to a seasonally adjusted annual rate of 4 million in January, the National Association of Realtors reported Thursday. 

Sales declined 1.7% from the previous year in January. 

Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.

"While home sales remain sizably lower than a couple of years ago, January's monthly gain is the start of more supply and demand," said NAR Chief Economist Lawrence Yun. 

The median existing-home price for all housing types in January was $379,100, an increase of 5.1% from $360,800 a year ago.  

All four U.S. regions posted price increases.

 

U.S. Indexes and Yields

The S&P 500 index increased 1.7% to 5,065.91, and the Nasdaq Composite advanced 2.5% to 15,963.40. 

The yield on 2-year Treasury notes increased to 4.70%, 10-year Treasury notes inched up to 4.33%, and 30-year Treasury bonds edged up to 4.49%.

WTI crude oil increased $0.65 to $78.57 a barrel, and natural gas prices decreased 10 cents to $1.66 a thermal unit and rebounded from a low last seen in September 2020.

Gold increased by $3.76 to $2,021.23 an ounce, tracking lower yields on U.S. Treasury notes. 

The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 104.08.

 

U.S. Stock Movers

Nvidia Corp. jumped 15.1% to $778.54 after the advanced semiconductor chipmaker reported a 265% jump in revenue in its latest quarter. 

Revenue in the fourth quarter increased to $22.1 billion from $6.2 billion, net income soared 769% to $12.3 billion from $1.4 billion, and diluted earnings per share jumped to $4.93 from 57 cents a year ago. 

For the fiscal year, revenue jumped 126% to $60.9 billion, net income soared 581% to $29.7 billion from $4.93 billion, and diluted earnings per share advanced to $11.93 from $1.74 a year ago. 

The closely watched Data Center business' sales soared fivefold to $18.4 billion from $3.6 billion. The business segment includes the company's popular H100 graphics card used for powering generative artificial intelligence apps. 

Lucid Group declined 8.1% to $3.40 after the electric vehicle maker reported weaker-than-expected revenue in its latest quarter as losses widened. 

Rivian Automotive dropped 17.2% to $12.74 after the company reported weaker-than-expected quarterly results and said electric vehicle production in 2024 was 57,000, lower than 57,232 a year ago. 

Revenue in the fourth quarter was $1.32 billion, a net loss of $1.52 billion from $1.72 billion a year ago. 

Moderna increased 4.4% to $91.50 after the vaccine maker reported larger-than-expected revenue in the fourth quarter and an unexpected profit. 

 

Market Indexes In Germany and France Reach New Highs 

European markets advanced in Thursday's trading as investors awaited the release of the latest policy meeting minutes later in the day. 

Benchmark indexes in Frankfurt, Paris, and London advanced, and bond yields edged higher as investors scaled back hopes of a rate in the near future. 

Market sentiment was also bolstered after a private survey of the service sector showed the smallest decline in eight months in February. 

Moreover, positive earnings from AXA, Zurich Insurance, Lloyds Banking Group, and Rolls Royce supported the advance in indexes. 

 

Eurozone Private Sector Contraction Slowed In February 

The HCOB Eurozone Composite PMI rose to 48.9 in February from 47.9 in the previous month, according to a preliminary estimate released by S&P Global.  

Overall activities declined for the ninth month in a row after the downturn in manufacturing was offset by a stable level of activity in the service sector. 

New order inflow continued to decline, but employment levels rose for the second month in a row. 

The services purchasing managers' index increased to a seven-month high of 50.0 from 48.4 in January, while the index for manufacturing eased to 46.1 from 46.6 in the previous month.

 

Europe Indexes and Yields

The DAX index increased by 1.5% to 17,374.81, the CAC-40 index rose 1.3% to 7,912.15, and the FTSE 100 index inched higher by 0.3% to 7,684.49.

The yield on 10-year German bonds edged up to 2.45%; French bonds inched higher to 2.92%; the UK gilts edged higher to 4.11%; and Italian bonds inched higher to 3.94%.

The euro edged higher to $1.085, the British pound inched higher to $1.267, and the U.S. dollar gained to 87.74 Swiss cents.

Brent crude increased $0.49 to $83.52 a barrel, and the Dutch TTF natural gas declined by €0.93 to €23.05 per MWh.

 

Europe Stock Movers

Zurich Insurance gained 3.3% to CHF 461.20 after the Swiss reinsurance company announced a stock repurchase plan. 

Nestle SA declined 4.4% to CHF 94.69 after the largest packaged food maker in the world reported weaker-than-expected organic sales growth in its latest fiscal year. 

Repsol SA increased 4.5% to €14.32 after the Spanish energy company committed to returning 4.6 billion in cash dividends to shareholders between 2024 and 2027. 

WPP PLC declined 2.7% to 759.60 pence, despite the UK-based global advertising firm reporting full-year revenue and earnings in line with market expectations. 

Accor SA increased 5.1% to €39.86 after the French hotel group reported a better-than-expected annual core profit. 

Lloyds Banking Group rose 2.2% after the UK-based bank reported a rise in its annual profit. 

AXA increased 2.8% to €32.05 after the French insurance group reported an increase in its underlying profit in the fiscal year 2023. 

The insurance company also announced a stock buyback plan. 

Rolls Royce soared 8.8% to 358.40 pence after the aviation and power engineering firm reported a sharp rise in its annual profit in fiscal year 2023 and estimated a higher profit in 2024. 

 

Japan's Nikkei 225 Surpassed Record High After 34 Years

Markets in Asia generally traded higher, and investors reassessed the latest policy meeting minutes from the Federal Reserve. 

Benchmark indexes in Tokyo advanced, and tech stocks led the gainers following the strong quarterly results from Nvidia. 

The Nikkei 225 advanced 2.2% to 39,098.68 and closed above its record high 38,915.87, set on December 29, 1989.  

The price-driven index, which favors higher-priced stocks over market caps, has surged over 17% in the year so far, and the index has advanced the most among the largest 15 financial markets in the world. 

The benchmark index has been flirting around the record high level for weeks after strong interest from foreign investors supported the gain in the index for the second year in a row. 

The Nikkei index had fallen to as low as 8,200 in 2011 after a string of natural disasters following the tsunami and earthquake, leading to the meltdown of the Fukushima nuclear power plant. 

The broader Topix index, which is favored by financial professionals, is still trading 8.5% below its record high in 1989. 

Tech stocks were among the leading gainers after Nvidia reported a three-fold increase in its quarterly revenue on the back of solid demand for its AI chips. 

Disco Corp., Tokyo Electron, Advantest, SoftBank, and Screen Holdings increased between 4% and 10%. 

The Au Jibun Bank Japan Manufacturing PMI Index unexpectedly declined to 47.2 in February from 48.0 in January, according to the preliminary estimate released by the bank. 

The decline in the index was the deepest since August 2020, following the decline in new orders and export sales. 

The Au Jibun Bank Japan Services PMI Index decreased to 52.5 in February from a four-month high of 53.1 in January. 

The Japanese yen traded above 150 against the U.S. dollar after the release of the U.S. Federal Reserve's January policy meeting minutes. 

Policymakers noted that interest rates may be nearing their peak in the current tightening cycle, but it may be too soon to lower rates because that could prolong higher inflation for a longer period. 

 

China Indexes Rebound on Property Reform Hopes

Market indexes in Shanghai and Hong Kong continued to advance and extend weekly gains in the hopes that the Chinese government would follow through with meaningful and solid stimulus and policy measures. 

So far, the Chinese government and policymakers have treated the 3-year decline in stock market indexes as market volatility driven by speculators and not rooted in economic fundamentals. 

The CSI 300 index increased 0.5% to 3,474.63, and the Hang Seng index added 0.6% to 16,609.96. 

Property developers extended gains, and Henderson Land, China Resources Land, Sun Hung Kai Properties, China Vanke, and Longfor Group advanced between 1.5% and 4%. 

trip.com Group soared 7% to HK$355.0 after the online travel booking site reported better-than-expected fourth quarter financial results. 

Banks were under pressure for the second day in a row after HSBC Bank reported weaker-than-expected results in its fourth-quarter results. 

China Merchants Bank declined, but the Industrial and Commercial Bank of China and the Agriculture Bank of China advanced. 

 

India Stocks Extend Weekly Losses 

Stocks in Mumbai traded down and extended weekly losses as investors debated the future rate path, state of the economy, and stock valuation. 

The Nifty and Sensex indexes declined in Thursday's trading on the worry that global interest rates will stay higher for longer after the latest Federal Reserve's policy meeting minutes showed resistance to lower rates too soon. 

Stocks were also under pressure amid worries about stretched valuations, and banks, tech services exporters, and automotive vehicle makers were among the leading decliners. 

The Sensex index decreased 405.63 points to 72,201.35, and the Nifty index fell 133.50 points to 21,935.55. 

On the Mumbai stock exchange, 214 stocks traded at their 52-week highs and 11 stocks traded at their 52-week lows.

Mishra Dhatu Nigam rose 9.3% to ₹440.85 after the central government permitted 100% foreign direct investment in projects making satellite components.