Mark, good morning to you. So, this is a
big event of course for the tech world.
It's also a huge macro event. I'm
talking about the Nvidia numbers still
many hours away, but no doubt uh
investors thinking about how they
position for such a big a big event. Uh
how are you thinking about the Nvidia
numbers to come?
I think it's really important to look at
the context of Nvidia earnings 12 months
ago. So, we came into these exact same
2Q earnings in August at the end of last
year. The market had done well. Nvidia
earnings beat. They were just brilliant
earnings and yet the stock sold off I
think it was more than 20% over the
coming few weeks dragging the index
lower. Now that's the bearish way of
looking at it. Earnings beat they're
brilliant and still the stock market
tanked. The positive way is obviously
the stock market then after after
slumping over the into September then
rallied again to fresh records and now
Nvidia stock is way higher again than it
was going to those earnings. I think
that that the kind of important takeaway
from all that is that Nvidia is is is
massive for the coming weeks and can
really control the short-term narrative.
It is unlikely to be the story in
isolation which is going to end uh or
turn this market around on a longerterm
scale. So I expect today that Nvidia
earnings will be very strong. I think
Tom's outlined the details very well. I
expect it to beat and I do think we'll
probably get disappointing price action
afterwards because the whole world's
expecting that. their position for that.
Critty observed the fact that the
markets are short VIX. We know the
market is uh generally very long, the
stock market at the moment, but I don't
think that's going to be the thing that
derails this market. I think if you want
to be very bearish, and I'm not I'm not
very bearish. The market's traded better
than I expected this month. I expected
we'd have more weakness, but I think the
weak point at some point will come
because bonds sell off too much. Long
end, bond yields go too high, and that's
where the real damage comes. But so far,
they're only selling off slowly.
What is too much? Is it 5% in the states
on the 30-year? Is it 6% in the UK? Kind
of what levels are we talking about? How
much further would we have to go?
I don't know, guy. I'm struggling. I I I
think that the, you know, in some sense
bond yields continue to go higher as
expected. I did think they would go
higher at a faster pace. I haven't got
the quite timing of this right yet. And
I and I I haven't worked out like I feel
like there's some kind of binary tipping
point, which is what you're asking. I
don't know what that that binary tipping
point is. I don't know whether it's one
data point. Is it a level? At the
moment, we continue to ratchet up
pressure both in the inflation side and
just from these positions getting more
underwater. Uh when will it spiral? I'm
not sure. But of course, this Friday, we
have inflation prints from all over the
world. So, we've certainly got a lot of
catalyst on the horizon that might be
the cause.
In terms of the catalyst, what matters
more at the end of Friday, the potential
success story of Nvidia or the PCE data
that we're about to get?
Yeah, it's it's a great question. I
think important PC data emphasize we get
inflation all around the world on Friday
and because this is a global bond
problem, not just treasuries. We start
with Japan inflation that's meant to
come down quite a bit. Uh we then get a
load of European inflation prints. So
it's the whole inflation story. In fact,
core PC is one that we can estimate very
accurately. So, it's less likely
surprise. I though actually think it
might be tech that will dominate the
short-term stock sentiment for the next
coming weeks.
All right, Bloomberg Markets live
executive editor Mark Hudmore joining
the program this morning. You get more
analysis from him and the team. MLIVgo
is the function on your terminals.