2024-11-19 11:08
Options imply 8.5% swing in Nvidia shares post-earnings Nvidia's market cap swing could reach $292 billion Investors focus on Nvidia amid AI boom and market trajectory NEW YORK, Nov 19 (Reuters) - Options traders are primed for a nearly $300-billion swing in Nvidia's (NVDA.O) , opens new tab market value following the chipmaker's quarterly results on Wednesday, U.S. options market data showed. Nvidia options implied an 8.5% swing for the shares in either direction following the results, which will be reported after markets close, according to data from options analytics service ORATS. That is in line with previous percentage moves following results over the last 12 quarters. But with the AI-chipmaker's market cap having grown to $3.44 trillion, the expected swing in market value is close to the biggest ever, at about $292 billion. A move of that size would dwarf the market cap of about 95% of S&P 500 constituents. Post-earnings moves in Nvidia's shares have typically undershot market expectations. Larger-than-expected moves, however, have tended to be to the upside, said ORATS founder Matt Amberson. Of the last 12 quarterly earnings reports, five post-earnings moves have been outside what has been expected by the market. Of those, all have seen the stock price go higher, Amberson said. Christopher Jacobson, a strategist at Susquehanna Financial Group, wrote on Monday that traders are assigning a slightly higher probability to an outsized move to the upside than to the downside. Results for the chipmaker - which is at the heart of the generative artificial intelligence boom - could be a key factor in determining the market’s trajectory. Investors are turning their focus to Nvidia following a post-U.S. election rally that has stalled in recent days. The S&P 500 is up 23% year-to-date despite a decline last week. "The market will extrapolate whatever Nvidia says to the entire AI trade," said Nancy Tengler, CEO and chief investment officer at Laffer Tengler Investments, in a note. Nvidia has bested lofty Wall Street revenue expectations for the past eight quarters. But with analysts expecting a slower pace of growth, how the company overcomes delays and supply-chain issues is likely to be an important factor for its stock price. The chipmaker is expected to report third-quarter sales surging 82.8% to $33.13 billion, according to data compiled by LSEG. On Monday, Nvidia shares finished down 1.3% to $140.15. For the year, the stock is up about 180%, making it one of the top performers in the S&P 500 index. Sign up here. https://www.reuters.com/technology/nvidias-options-primed-300-billion-price-swing-after-earnings-2024-11-19/
2024-11-19 11:07
Nov 19 (Reuters) - Joe McCann was sitting in his Miami condo, eyes glued to screens flashing with bitcoin trades as the American election results rolled in. "When the first polls closed, we started to see massive U.S. buying and it just hasn't stopped since," said McCann, founder of crypto-focused hedge fund Asymmetric. "The sentiment in the crypto community is a form of elation at this point." Indeed bitcoin has skyrocketed over 32% since Nov. 5 to an all time high of more than $91,000 dollars as traders bet President-elect Donald Trump's promised support for digital assets would lead to a less restrictive regulatory regime and inject some life back into bitcoin after a listless few months. On Binance, the world's biggest crypto exchange, the average bitcoin daily trading volume from Nov. 6 to Nov. 13 jumped to about $493 million, nearly double the year's average of around $252 million, as per crypto data provider Kaiko. Volumes on Coinbase (COIN.O) , opens new tab were triple the year's average during the same period, averaging over $108 million per day. Meanwhile, U.S.-listed exchange-traded funds tracking the spot price of bitcoin, products favored by institutional investors, notched their biggest daily net inflows on record of $1.43 billion dollars on Nov. 7, according to CoinShares. Yet many market players cautioned that investors could get burned by profit-taking and market pullbacks in the coming weeks, with Coinglass' bitcoin "fear and greed" index - a measure of market sentiment - firmly in "greed" territory. "Expect some confusion as even the most sophisticated and connected market participants try to parse if a Trump administration means a more balanced regulatory regime, a Wild West free-for-all, or if Trump will simply forget about crypto entirely," said Matthew Graham, managing partner at Ryze Labs. CRYPTO MARKET TOPS $3 TRILLION It's definitely getting choppy. Bitcoin's annualized 30-day volatility ticked back up to over 58%, its highest since September and after slumping as slow as 25% in June, according to data from The Block. The market gains go beyond bitcoin; The total cryptocurrency market value has soared to an all-time high of $3.16 trillion, according CoinGecko. Open interest on derivatives exchanges is at a record high of over $102 billion, Coinglass data showed. Ethereum has jumped about 32% since the election, while the market value of decentralized finance-focused tokens touched a five-month high of $93 billion. Despite the initial excitement, details on what exactly will change under a new administration remain hazy. The main focus now is the appointment of Trump's U.S. Treasury Secretary, with a few potential candidates including Howard Lutnick and Scott Bessent, seen as more crypto friendly. Ryan Lee, chief analyst at Bitget Research, warned traders should stay alert for sudden pullbacks: "The appointment could trigger short-term speculation." Sign up here. https://www.reuters.com/technology/cryptoverse-elation-bitcoin-basks-trump-glow-2024-11-19/
2024-11-19 11:06
MEXICO CITY, Nov 19 (Reuters) - The Bank of Mexico will likely be able to continue cutting its benchmark interest rate due to the progress made on bringing inflation down, bank governor Victoria Rodriguez told Reuters in an interview. Banxico, as Mexico's central bank is known, lowered its key rate by 25 basis points to 10.25% on Thursday in a unanimous decision by its five-member governing board. "Given the progress of disinflation, we believe that we can continue with the cuts to the reference rate and in the following meetings we will be assessing the inflationary outlook and making the corresponding decisions," said Rodriguez late on Monday. In October, core inflation, which excludes volatile energy and food prices, slowed to 3.80% in the 12 months through October, down from 3.91% in September. Annual headline inflation rate ticked up to 4.76% last month, from 4.58% in September. Banxico targets headline inflation at 3%, plus or minus one percentage point. "Depending on what we see with the inflationary outlook, there could even be larger cuts," said Rodriguez, referring to the fact that all four interest rate reductions this year, including at the last three straight meetings, have been 25 basis points each. Meanwhile, Mexico's peso currency has weakened sharply over the past six months, as a series of post-Mexican election reforms shook investor confidence in the country's legal system, and as Donald Trump's U.S. election victory fuels uncertainty over the future of the critical bilateral trade relationship. Still, in the aftermath of the U.S. election, operating conditions in the forex market have remained "relatively orderly," said Rodriguez, adding that while Banxico has not needed to take any action, it was monitoring the situation and ready to act if necessary. "If operating conditions require it, we could, if necessary, intervene," Rodriguez said. On Friday, Mexico's finance ministry presented the government's highly-anticipated 2025 budget, forecasting the budget deficit next year will come down to 3.9% of gross domestic product as economic growth increases and the government plans hefty spending cuts including to defense and security. Market watchers were keeping a close eye on the budget as the government is under pressure to narrow the deficit which is expected to close this year at 5.9% of GDP, the highest since the 1980s. "After the budget was announced last Friday, the financial markets maintained an orderly behavior, which is undoubtedly a positive sign," Rodriguez said. Sign up here. https://www.reuters.com/markets/bank-mexico-flags-more-rate-cuts-due-progress-lowering-inflation-2024-11-19/
2024-11-19 11:04
JOHANNESBURG, Nov 19 (Reuters) - The South African rand fell on Tuesday as investors pulled out of riskier assets after President Vladimir Putin updated Russia's nuclear doctrine amid escalating tensions with the United States over Ukraine. At 1508 GMT, the rand traded at 18.0950 against the U.S. dollar , 0.85% weaker than its previous close. The currency had lost more than 1% against the greenback earlier in the day. Putin on Tuesday approved an updated nuclear doctrine, with the aim of making potential enemies understand the inevitability of retaliation for an attack on Russia or its allies, driving investors to safe-haven currencies like the dollar. Traders also said that markets were confident of an interest rate cut by the South African Reserve Bank on Thursday, which could weaken the currency. South Africa-focussed investors will look to October inflation print (ZACPIY=ECI) , opens new tab on Wednesday and the central bank's monetary policy decision (ZAREPO=ECI) , opens new tab a day later. The bank is expected to reduce the repo rate by 25 basis points, according to a Reuters poll of economists, after a cut of the same magnitude at its September meeting. On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) , opens new tab closed 0.1% higher. South Africa's benchmark 2030 government bond was marginally stronger, with the yield down 1.3 basis points to 9.11%. Sign up here. https://www.reuters.com/markets/currencies/south-african-rand-falls-risk-off-move-after-russian-nuclear-comments-2024-11-19/
2024-11-19 10:57
LONDON, Nov 19 (Reuters) - The Bank of England's most recently appointed interest rate-setter Alan Taylor said the central bank's gradual approach to cutting borrowing costs was in line with recent market pricing for about four quarter-point cuts by the end of 2025. "I think if you ask what does gradual mean right now, it's aligned in our case closely to the market curve, so that would be in line with about 100 basis points over the next year," Taylor told the Treasury Committee in parliament on Tuesday. "But that doesn't mean to say that's what will unfold, if conditions are weaker, and in my own view (if the balance is) skewed to the downside risk now versus the upside risk of about a year ago, then we could go faster." He said the outcome could prove different, depending on economic conditions. Markets were pricing about four rate cuts by the BoE by the end of 2025 before the government announced its big-spending budget on Oct. 30, but those bets have dwindled to between two or three since the budget and the election of Donald Trump as the next U.S. president. Sign up here. https://www.reuters.com/world/uk/boes-taylor-says-4-rate-cuts-by-end-2025-would-be-gradual-2024-11-19/
2024-11-19 10:48
Pension funds saw significant growth after 2010 reforms Funds look to diversify after debt restructuring Authorities fear offshore investment will weaken cedi further Ghana's currency has shed a quarter of its value this year ACCRA, Nov 19 (Reuters) - Ghana is clamping down on private pension fund managers who want to invest in offshore assets on concerns it could worsen pressure on its cedi currency, three industry sources told Reuters. After pension reforms in 2010, workers' retirement contributions in the world's number two cocoa producer enjoyed strong growth, buoyed by a tiered scheme that allow private firms to manage some contributions. Assets under management by the pension fund industry were 78.2 billion Ghanaian cedis ($4.93 billion) in June, of which over 73% were managed by 39 private fund management firms. Ghana's state-run pension fund handles tier one contributions towards employees' monthly retirement benefits, which are mandatory, while private firms manage tiers two and three - mandatory and voluntary contributions respectively - for lump-sum payment at or before retirement. The majority of contributions are invested in Ghanaian assets, including Ghana government Eurobonds. However, private fund managers have been eager to explore offshore investment opportunities following the restructuring of 31 billion cedis of their holdings under a local debt rework. Ghanaian laws permit private fund managers to invest up to 5% of total assets abroad, approximately 2.8 billion of current assets under management, though firms and authorities differ on the necessity of prior approval. Some fund managers invested in offshore assets earlier this year, the sources, two in the private pension firms and one at the finance ministry said, but were stopped by the regulator, the national pensions regulatory authority (NPRA). "They (NPRA) threatened to sanction us but we didn't find any basis in law," one of the source at a fund management company told Reuters. "We have not exited but we can't invest more (offshore). It's a very strange development," said the source who asked not to be named, adding that they had $5 million in offshore assets. John Kwaning Mbroh, head of NPRA, told Reuters that "there's no resistance" to investing pension assets offshore but the regulator needed approval from the government before signing off. Mbroh said discussions were taking place to streamline the rules and clarify how to value offshore investments for contributors and fund managers, although he did not know when they would conclude. 'PROTECTING LIQUIDITY' Ghana is concluding a challenging debt-restructuring process under the G20's Common Framework initiative, having defaulted on most of its $30 billion international debt in 2022. Despite Ghana's economic recovery, the cedi currency has depreciated 25% against the U.S. dollar year-to-date, having already fallen around 17% in 2023. The source at the finance ministry, who also requested anonymity, said the ministry was concerned about the need to "balance the effects" of investing pension funds abroad on domestic liquidity and value appreciation to fund managers. "The ministry won't say 'no' but it's about how do we protect the economy, the liquidity," the source said. Private pension management firms in Ghana argue that authorities are overly cautious, pointing out that local mutual funds and African pension funds invest offshore without similar concerns. They contend the current policy, given high inflation and cedi depreciation, limits value creation and mutes gains. They also say it is contradictory to allow foreign pension funds to invest in Ghana's market while preventing local funds from investing abroad. "The world over, pension funds chase value but they want us to chase inflation," an executive of one of the top five fund managers said, adding that investing 5% of their assets abroad doesn't even move the needle. ($1 = 15.8800 Ghanian cedi) Sign up here. https://www.reuters.com/world/africa/ghana-blocks-pension-funds-offshore-investment-currency-concerns-sources-say-2024-11-19/
