Nvidia Earnings, Fed Comments, New Home Sales: What to Watch

As we navigate the dynamic landscape of the financial markets, it's crucial to stay informed about key events and data points that can significantly impact our investments. In this article, we'll delve into three critical aspects: Nvidia's upcoming earnings report, recent Federal Reserve comments, and the latest new home sales data. By understanding these factors, we can make more informed decisions and better navigate the market's twists and turns.



Nvidia Earnings: A Beacon of Strength

Nvidia, the leading AI chipmaker, is set to report its fourth-quarter results after the market closes on Wednesday, February 26. Analysts are overwhelmingly bullish on the company's stock, with 17 out of 18 tracked by Visible Alpha issuing "buy" or equivalent ratings. The consensus price target stands at around $175, implying a 32% upside from Monday's intraday price.

The chipmaker is expected to post another quarterly sales record, driven by strong demand for its advanced chips. Wedbush and Oppenheimer analysts suggest that booming demand for Nvidia's AI infrastructure could lead to another strong quarter. UBS analysts noted that investor expectations have crept up recently, and supply chain improvements could mean higher sales of Nvidia's Blackwell line. UBS nearly doubled its estimate for Blackwell's contribution to fourth-quarter revenue to $9 billion, up from $5 billion previously.

Nvidia's focus on scaling foundation models through pre-training, post-training, and inference time scaling, coupled with its ability to meet growing demand for its products, has positioned the company as a strong performer in the market.



Federal Reserve Comments: Navigating the Monetary Tightening

The Federal Reserve's recent comments and monetary policy decisions have significantly impacted the broader market and Nvidia's stock specifically. In his remarks, Fed Chair Jerome Powell indicated that the Fed would continue to raise interest rates to combat inflation, but at a slower pace. This suggests that the Fed is becoming more cautious in its approach to monetary policy, which could lead to less market volatility and a potential rebound in stock prices, including Nvidia's.

Powell also noted that the labor market remains strong, which is positive for Nvidia, as a strong labor market typically leads to increased consumer spending and demand for technology products. Powell's comments on the economy's resilience and the Fed's commitment to achieving its 2% inflation target suggest that the Fed is confident in the economy's ability to withstand higher interest rates, which could lead to a more stable market environment for Nvidia's stock.



New Home Sales: A Glimpse into the Housing Market

The latest new home sales data provides valuable insights into the housing market's trends and potential influences on related sectors. The key takeaways from the data include increased inventory and subdued demand. New homes for sale are at 481K, the highest level since 2007, and speculative homes for sale are at 385K, the highest since 2008. These metrics are roughly 50%/40% respectively above long-term averages. However, despite the increase in inventory, demand for new homes remains low, with existing home sales still exceptionally low.

These trends suggest that the housing market is likely to remain largely frozen through 2025, with growth expected at a very subdued pace of 3% or less. The higher-for-longer interest rate backdrop, with mortgage rates expected to ease only slightly to 6.7% by the year-end, could exacerbate affordability concerns for potential homebuyers. This could further dampen demand and slow down the housing market recovery.



In conclusion, keeping a close eye on Nvidia's earnings report, Federal Reserve comments, and new home sales data can provide valuable insights into the market's dynamics and help investors make more informed decisions. By staying informed and adaptable, we can better navigate the market's twists and turns and capitalize on opportunities as they arise.