Wednesday’s trading session is poised for significant movement driven by key earnings reports and global bond market shifts. Nvidia is scheduled to release its results after the bell, while retail heavyweights Target and Lowe’s report before the market open. Meanwhile, escalating bond yields in the U.S., Europe, and Japan are signaling caution across equity markets, impacting both developed and emerging economies.
Stocks @ Night delivers daily market insights, offering a peek into tomorrow's trading and a recap of today's movements. Sign up for free to receive this exclusive newsletter directly in your inbox. Today, CNBC TV producers focused on the impact of higher Treasury yields on equities and what to watch in the upcoming session.
Nvidia Reports Earnings After Bell
Nvidia, a closely watched tech giant, is slated to report its earnings after the market closes on Wednesday. The stock has seen a 6% dip from its peak last week but still boasts an impressive 17.4% gain over the past three months. Ahead of the report, the options market indicates an implied volatility of approximately 6%, suggesting expectations for a significant price fluctuation. While past implied volatility figures have sometimes aligned, the actual moves have often been less dramatic than predicted in recent years.
Jeff Bezos Live on 'Squawk Box'
Amazon founder and Blue Origin creator, Jeff Bezos, is set to appear live on CNBC's 'Squawk Box' from his rocket factory in Florida. As Amazon's largest individual shareholder, his insights are highly anticipated. Amazon shares reached a high on May 5th, subsequently dropping 7%, but they have surged nearly 27% in the last three months.
Overseas Bond Market Volatility
Wednesday will bring crucial European economic data, including inflation figures from Germany, the United Kingdom, and the broader European Union. The global bond market is showing significant strain, with Japan's 10-year yield hitting levels not seen since the 1990s. Germany's 10-year bund yield has reached 2011 highs, while the British 10-year gilt climbed to 5.126%, reminiscent of 2008 highs.
European and Emerging Market Equities Under Pressure
The rising global yields and inflation concerns are impacting international equity markets. The Vanguard FTSE Europe ETF (VGK) has lost 3% in the last month, the State Street SPDR Euro Stoxx 50 (FEZ) is down 3.5%, the iShares MSCI United Kingdom ETF (EWU) dropped 4%, and the iShares MSCI Germany ETF (EWG) declined 2.7% over the same period. Emerging markets are also struggling, with the iShares MSCI Emerging Markets ETF (EEM) falling 2.4% in the past week. Specifically, the iShares MSCI Brazil ETF (EWZ) is down about 6% weekly and nearly 13% monthly, and the iShares MSCI Mexico ETF (EWW) has decreased by 3% in the past week.
U.S. Bond Market Signals Caution
Back in the U.S., the 30-year Treasury yield briefly touched 5.197%, its highest level since July 2007 (the year the first iPhone launched), settling at 5.183% on Tuesday night. The 2-year yield stands at 4.12%, and the 3-month Treasury bill yield is 3.663%. CNBC contributor Guy Adami cautioned that "the equity market has woken up to the fact that the bond market here is deteriorating and by the way Japan is a powder keg waiting to happen." The S&P 500 has lost 0.6% and the Nasdaq 100 0.9% in the past week.
Retail Sector Earnings in Focus
Retail giants are also in the spotlight. Target is set to report before the bell, having fallen 4.4% from its April high but still up 10% in the last three months. Walmart, reporting on Thursday, hit a new high Tuesday and has gained 7.5% over the past three months. Lowe's, reporting Wednesday, faces headwinds, down 25% from its February high and 21.5% in the last three months, following Home Depot's recent earnings beat.
McDonald's Annual Shareholder Meeting
McDonald's will hold its annual shareholder meeting on Wednesday. The fast-food giant's shares are 18% below their March 2 high and have dropped nearly 10% in the past month. CNBC TV's Brandon Gomez will provide ongoing coverage.
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