On the eve of NVIDIA's earnings report, market sentiment is cautious, U.S. stock index futures collectively turn positive, Japanese stocks and bonds suffer losses, while gold and silver both rise

Investor concerns about the overvaluation bubble of tech stocks and the uncertainty of the Federal Reserve's policy path have intensified, leading to increased market risk aversion and putting pressure on global stock markets.

On November 19, U.S. stock index futures were mixed, European stock indices mostly fell, and Asian stock markets declined for the fourth consecutive day. The U.S. dollar and U.S. Treasury bonds remained largely flat, while Japanese government bond prices fell. In commodities, gold and silver rose, while crude oil fell. In the cryptocurrency market, Bitcoin recovered some ground after falling below the $90,000 mark.

Market focus is shifting to the upcoming Nvidia earnings report, with market sentiment cautious. After the market close on November 19 Eastern Time (morning of November 20 Beijing Time), Nvidia will release its third-quarter earnings report, which not only reflects its performance as a leading AI company but is also seen as an important barometer of sentiment in the AI sector and the global market.

Bob Diamond, former CEO of Barclays and current head of investment firm Atlas Merchant Capital, stated that the recent turmoil in global markets resembles a "healthy adjustment," with investors assessing various aspects of technological change. He said:

“We have seen risk assets being repriced, but that does not mean we are entering a bear market.”

Core market trends:

• U.S. stock index futures collectively turned higher, with S&P 500 futures up 0.06%, Nasdaq 100 futures up nearly 0.02%, and Dow futures up 0.03%
• The Euro Stoxx 50 index fell 0.02%, the UK FTSE 100 index rose 0.06%, the French CAC 40 index fell 0.04%, and the German DAX 30 index fell 0.06%
• The Nikkei 225 index closed down 0.3% at 48,537.7 points. The Tokyo Stock Exchange index fell 0.2%. The Seoul Composite Index closed down 0.6%
• The 10-year U.S. Treasury yield remained steady at 4.12%, while the Japanese 10-year government bond yield rose 2 basis points to 1.765%
• The U.S. dollar index remained flat at 99.582
• Spot gold rose 0.5% to $4,089 per ounce, spot silver rose over 1.2% to $51.34 per ounce, and WTI crude oil fell 0.4% to $60.4 per barrel
• Bitcoin fell 1.6% to $90,957.01, while Ethereum fell 1.8% to $3,040.81

On the eve of Nvidia's earnings report, market sentiment is cautious, and U.S. stock index futures are mixed. The VIX index, which measures market panic, broke above 24, not only surpassing the key psychological level of 20 but also reaching a new high in nearly a month.

According to Ryan Grabinski of Strategas, Nvidia's market capitalization has now surpassed the combined total of the energy, materials, and real estate sectors, even exceeding the scale of entire sectors such as utilities, and is greater than the entire industrial sector. He stated:

"This result may have a ripple effect on the U.S. and international markets. Although the market's enthusiasm for AI has cooled in recent weeks, if NVIDIA delivers better-than-expected results, it could reignite optimism. Of course, the current market expectations for AI have been significantly raised."

Another focus for investors is whether the Federal Reserve will cut interest rates next month. Currently, swap trading indicates that the likelihood of a rate cut in December is less than 50%. There are still differences in the interest rate path, with some policymakers warning that lowering rates poses inflation risks.

The yield on Japan's 10-year government bonds rose 2 basis points to 1.765%, the highest level since the global financial crisis in June 2008.

According to Wallstreetcn, the sharp sell-off in Japanese bonds is driven by market expectations that Prime Minister Fumio Kishida's government may plan to introduce a supplementary budget far exceeding expectations, raising concerns that this massive expenditure will have to be financed through the issuance of a large amount of government bonds, thereby adding extra supply pressure to the market.

Goushi Kataoka, an economic advisor to Prime Minister Fumio Kishida, stated that the Bank of Japan is unlikely to raise the benchmark interest rate before March next year. According to Wallstreetcn, Goushi Kataoka indicated that the policy focus should first be on boosting domestic demand through large-scale fiscal spending, followed by the normalization of monetary policy. This statement has "doused cold water" on the market's previously aggressive expectations for recent rate hikes. The exchange rate of the yen against the dollar remained basically flat at 155.36.

European stock indices are collectively under pressure, with the Euro Stoxx 50 index's decline widening to 0.3%.

The market is becoming cautious, and risk-averse sentiment has boosted gold prices, with spot gold rising over 0.5% to $4,089 per ounce.