Too much is not enough
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Why did NVIDIA’s strong earnings fail to keep its stock up?
Well, NVIDIA gave a strong result yesterday and spoke up the opportunity for AI and markets initially enthused. Ran scared today. The non-farm payrolls data came out with a rising unemployment rate, but even then there's more of an expectation now that the Fed won't budge in December. Japan has announced a big stimulus package and the Aussie and other commodity currencies hit hard today as oil falls further and PMIs. Today, Europe versus the United States. Who moves? It's Friday, it's the twenty-first of November 2025. It's the morning call from NAB. Good morning. Well, not much movement with the US dollar. The Aussie though is down naught point six percent to sixty four point four US cents. The Canadian dollar is down naught point four, the yen down naught point two.
Uh but m other than that, uh m moves have been fairly contained, but equity's down one point two percent off the Nasdaq, nort point seven percent off the S P. Whereas in Europe, equities are rising. The DAX and the US Stocks fifty both up half a percent. The outlier is the NICA. Up a lot. We'll cover off why that is today. And bond yields are generally rising in Europe, but down four basis points for 10-year treasuries. Aussie 10 years that rose to 4.46 yesterday, or just one basis point higher this morning. And oil is down further as well. Another half a percent off Brent and 0.8% off WTI, which takes it now below 59 a barrel. And here's Kim Crompton from NAB in Sydney. So the curious thing on US equities today.
Um, I mean the fear this time yesterday just before the earnings was that w uh NVIDIA would disappoint, but it didn't. It came out with record revenue of fifty seven billion in Q three, up twenty two percent f in the for the quarter, and up sixty two percent from a year ago, and earnings per share moved from a dollar nine to a dollar thirty, or a year ago they were just seventy eight cents. So all of that is good. And there was initial enthusiasm from all of that, but um that enthusiasm fizzled out middle of this section. Uh in fact Nvidia shares are actually down more than one and a half percent today. Interesting stuff.
Yeah, it's a very hard market to please, isn't it, Phil? Which uh which I guess does sort of speak to what do they want? It does speak to how relatively frothy valuations have become in this overriding uh narrative that's been sitting below equity markets of just how how uh how how overdone is the AI valuations or the AI bubble if you i if you want to call it that. Um I mean, notably though, I mean in After Hours trading S Nvidia was sort of up as much as sort of it was up about ten dollars, which must be about seven percent or something off the top of my head. So the weakness certainly did come as um I guess sort of people started to think about the other as profit takers started to to come in, I suppose, is is probably one way to put that.
I mean one interesting thing there though that ties into the broader geopolitics was that um the um that J Jensen Wang had their uh China revenue forecast was zero. So basically they're not making any any expectation that their um export restrictions from the US into China can change.
Yeah, I'm also wondering whether I mean he was sounding a bit hyper, wasn't he? So he talked about how the demand keeps accelerating and compounding across training and inference, each growing exponentially. He said we've entered the virtuous cycle of AI. The AI ecosystem is scaling fast, with more new foundation model makers, more AI startups across more industries and in more countries. AI is going everywhere doing Everything all at once.
How are US equity markets reacting to the latest earnings and job data?
That sounds like a CEO without an inch of caution, doesn't it? Really? I wonder whether that's part of the problem.
Is he overselling it? Well yeah, I mean he did say that we see something different from w from where they're sitting and in terms of competition he did say that you know, c people try other products and eventually come back. Um you know. I I g I I guess that is what it is. I mean I it does call to mind uh you know a a chart that's been uh been been getting put around over the past few months of the uh the AI singularity where you know GDP either goes infinitely high or or or or to zero as AI makes us extinct or it solves all resource scarcity.
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