Nvidia results will rock markets

This week belongs to Nvidia and its CEO Jensen Huang. 

Not to Donald Trump. Not to any of his cabinet nominees. Not to the incoming Republican majorities in the U.S. Senate or the House of Representatives.

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Nor Federal Reserve Chairman Jerome Powell, who said Thursday, “The economy is not sending any signals that we need to be in a hurry to lower rates.”

Related: Stocks lower Friday. Movers: Palantir, Applied Materials, Ulta Beauty

Which caused stocks to fall Thursday and Friday.

Nope, the week belongs to Jensen Huang and Nvidia NVDA, which is expected to report 74 cents a share in earnings on Wednesday, up 85% from a year ago, according to Zacks.  Zacks sees revenue jumping 81.1% from a year ago to $32.8 billion.

Think about the size of the sales growth. Then, think about the profit growth. 

Nvidia basically owns the market for very high-end chips and related equipment critical to the workings of artificial intelligence.

The shares are up 186.7% this year. Nvidia may have fallen 3% on Friday, but its market cap was $3.483 trillion at the end of the day. 

That’s still bigger than the market cap of mighty Apple  (AAPL) , which was at $3.40 trillion.  

Apple shares were up only 16.9% for the year as of Friday, the second worst performance among shares in the so-called Magnificent 7 group stocks, just ahead of Microsoft  (MSFT) , up 10.4% this year. 

So, yes, attention will be paid to Nvidia this week. 

Very big companies report earnings this week

The week is not the biggest of the year, but it includes some monster stocks: 

Here’s a quick rundown.

Tuesday Walmart  (WMT) , which reports earnings on Tuesday morning before U.S markets open. Its shares are up only 60% this year. Also reporting: Home-improvement dealer Lowe’s  (LOW) , whose shares are 21% this year, also reports on Tuesday. So does medical device company Medtronic  (MDT) .

Wednesday. Besides Nvidia reports are due from retailer TJX  (TJX)  , cybersecurity firm Palo Alto Networks  (PANW)  and retail giant Target  (TGT) . 

Thursday: Software developer Intuit  (INTU) , farm-equipment maker Deere & Co.  (DE) , Ross Stores  (ROST)  and Chinese internet retailer Baidu.com  (BIDU) .

Related: Walmart is counting on AI e-commerce upside on Black Friday

Beyond Nvidia, the big question facing markets this week is a conflict: The incoming Trump Administration wants to see stocks move higher as they did the week after the Presidential election. 

The major averages jumped in glee in the first days after Trump’s victory over Kamala Harris. 

Traders working on the floor of the New York Stock Exchange in August. 

Michael M. Santiago/Getty Images

The Standard & Poor’s 500 index ended that week up 4.7%. The Nasdaq Composite Index was up 5.7%. The Russell 2000 index jumped 8.6%.

This past week was very different. The Federal Reserve and Jerome Powell wanted everyone to remember: They want to be sure inflation is in check. Two important inflation measures, the Consumer Price Index and the Producer Price Index, suggested there are still inflation pressures in the economy. 

Powell’s comment on whether there is a crying need to cut interest rates was in the text of his Dallas speech. Clearly, he wanted to send a message.

The message was received: 

The S&P 500 finished the week down 2.1%; the Nasdaq fell 3.2%. 

Only two of the S&P 500’s 11 sectors — energy and financials — were higher on the week. 

Housing and home sales reports are due

The week ahead is concentrated with economic reports about housing.  

The National Association of Home Builders Housing Market Index, due Monday, looks at 

What builders are seeing in terms of current salesExpected sales over the next six monthsCustomer traffic. 

The index was as high as 83 in 2021 before the Federal Reserve attacked inflation with higher interest rates. The index so far this year is at 51 or lower. That’s a 38% decline.

Image source: Shutterstock

On Tuesday, the Commerce Department reports on October housing starts and building permits. On Thursday, the National Association of Realtors reports on existing home sales in October.  This comes out as a seasonally adjusted annual rate. 

There was hope the Fed’s mid-September rate cut would generate more activity. But mortgage rates have moved back to 7%, making — or forcing — buyers wait for rates to drop. 

It’s not just buyers frozen by higher mortgages. Sellers can’t sell their homes. And the act of buying a home is critical to furnishing and appliance dealers. Their businesses depend on more on business that comes after a deal is closed. 

Big home builders can get stock with inventory. Shares of D.R. Horton  (DHI) , one of the biggest home builders, hit $196.59 a day after the Fed cut its short-term interest rate. The shares are down nearly 18% since.

Related: Veteran fund manager sees world of pain coming for stocks