Morning Brew August 27 2025

Good morning!

Today is a significant day for Nvidia – and thus for all of us.  Earnings will be announced after the market closes. Our analyst, Rubens, notes that the consensus estimates suggest Nvidia will report USD 46 billion in revenue and USD 1.00 in earnings per share (EPS), both representing over 50% growth year-on-year. Some forecasts are even more optimistic, predicting revenue near USD 48 billion and EPS of USD 1.06. Analysts are overwhelmingly positive, with approximately 90% rating the stock as a 'Buy.' The average 12-month target price ranges from USD 190 to USD 220, with some forecasts reaching as high as USD 240.

Nvidia isn't just the world's most valuable company; it also accounts for roughly 8% of the S&P 500 and is included in every major stock index. The earnings event tonight will likely impact many investors to varying degrees. Options markets are indicating a potential price move of about 6% following the announcement, equivalent to a change in market value comparable to SAP, one of Europe's largest companies.

Potential scenarios for the event include:

1. Base Case: Solid growth in data centers, timely development of Blackwell, and steady margins. Expected market reaction: calm to positive.
2. Bull Case: Larger orders, accelerated progress on Blackwell, and stronger margins. Expected market reaction: rally among AI-related stocks.
3. Bear Case: Disappointment regarding China or timing issues, with softened margins. Expected market reaction: risk reduction across chip and cloud sectors.

If you're interested in trading U.S. equities, remember that you can do so from 13:00 to 23:00 by enabling "Extended Trading Hours" in the trade settings and adjusting the toggle in the trading window.

Besides Nvidia's earnings, there's little else to focus on today. German consumer sentiment, Swiss investor sentiment, and U.S. mortgage applications typically don't significantly impact the markets.

In political news, the Trump administration remains active. A recent cabinet meeting saw President Trump call for a dramatic reduction in drug prices by 1500%. Additionally, Trump's decision to double tariffs on goods from India, effective Wednesday, has increased some tariffs to 50%. The U.S. government will begin seeking the death penalty in Washington, D.C., homicide cases.

Federal Reserve Governor Lisa Cook plans to file a lawsuit to prevent President Trump from firing her, strengthening the USD. The main issue is Trump's preference for lower interest rates, while Cook, although generally considered dovish, does not align perfectly with his views.

China's industrial profits fell for the third month in July, as businesses struggled with weak demand and persistent factory-gate deflation.

Yesterday's trading day was relatively uneventful, with focus already shifting towards Nvidia's positioning. The S&P 500 and Nasdaq gained 0.4%, while the Dow rose 0.3%. Tesla has shown strength, increasing by 7% over the last week, now trading at 350. The GER40 index is at 24,200, searching for direction.

The USD appreciated to 98.44, with EUR/USD at 1.1617, GBP/USD at 1.3450, and USD/JPY at 147.90. Gold and silver are priced at 3375 and 38.50, respectively. Bitcoin remains volatile, currently at 111,500.

Wednesday, August 27

• Australia: CPI
• Earnings: HP, Nvidia

Thursday, August 28

• EU: ECB Consumer Confidence
• US: Weekly Jobless Claims, GDP
• Earnings: Dell

Friday, August 29

• Japan: CPI
• France: CPI
• Swiss: KOF
• DE: Unemployment
• Canada: GDP
• US: PCE & University of Michigan
• Earnings: EMS Chemie, Alibaba