Something for your Espresso: While we are waiting for Nvidia (and Godot)
Morning from Europe!
Equity markets are eagerly awaiting the most anticipated earnings report in newer history when Nvidia releases the report after the closing bell today. It seems like bets are off ahead of the release and markets were dragged down by position squaring in Technology yesterday.
It seems like a vanilla conclusion, but the most likely reason is that leverage and risk is taken off ahead of a binary event with many CTAs and active managers booking solid profits in the Tech space from the past months
We keep our tech bets open, even if the ON RRP depletion has admittedly slowed a tad compared to our base-case (see chart 1)
Chart 1: The ON RRP depletion has been underwhelming in February
The technology bet is suffering from a bit of pre-Nvidia fatigue, while there are early signs of positivity around cyclical assets. The FOMC meeting minutes will probably hold the most signal value on the balance sheet.
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