- NVIDIA shares lose another 6%
- Value stocks back in play, energy and financials stocks make solid gains
- Vertu Motors drives volumes with increased discounting for new vehicles
- FTSE 100 opens flat
- Brent Crude steady at about $86 per barrel
Derren Nathan equity research, Hargreaves Lansdown:
“Nvidia has had another stumble slipping further away from the position it held briefly as the world’s most valuable company. But contrary to recent noise, markets are about more than just one stock. After several days of declines, yesterday saw the chipmaker’s stock lose over 6%, shedding some $200bn from its market value. But to put things in context, the shares have still gained 190% on a 12-month view, so it’s no surprise some investors are locking in some profits, including CEO Jensen Huang who is reported to have sold around $95mn of stock in recent days.
But although NVIDIA has sneezed, the wider market hasn’t caught a cold with a mixture of less extreme movements in both directions for the rest of the magnificent 7. Meanwhile, in other sectors US stocks saw gains in energy, financials and utilities: a vote of confidence by investors in the health of the broader economy.
Asian indices had a strong session overnight, with Japan in particular standing out. In parallel with the US, value stocks led the way. The notable exception in the region was Taiwan, whose economy is dominated by the chipmaking industry.
With few UK corporate or economic releases scheduled for today, the FTSE 100 is expected has opened flat.
One British company that has updated on trading, however, is car dealership network Vertu Motors. New vehicle volumes were up 6.8%, but margins were down, reflecting increased discounting. Softness in auto pricing is another sign that inflation is receding and will provide some comfort for those hoping for interest rate cuts in the near future.
Used vehicle volumes also grew strongly, with prices remaining stable. The Group also noted that regulatory support for electric vehicles may lead to the strengthening of petrol and diesel used car values as supply dwindles. Overall, Vertu expects that results for the year ending February 2025 will be in line with market expectations.
Brent crude is holding steady at around $86 per barrel after modest gains yesterday. Intensifying fighting in Ukraine and the Middle East is casting a shadow over the supply outlook. In terms of demand traders are holding their breath ahead of tomorrow’s US inventory figures.”
