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PCE inflation at 8:30 a.m. Nvidia earnings after the close. The morning sets the Fed narrative. The evening sets the AI narrative. By tonight, September is priced.
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August 26, 2026 • Wednesday edition • No hype, just perspective.
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PCE at 8:30 a.m. Nvidia After the Close. By Tonight, September Is Priced.
This is the day the market has been building toward all week. At 8:30 a.m. ET, the Bureau of Economic Analysis releases the July PCE price index, the Fed’s preferred inflation gauge. Consensus expects headline PCE at 3.6% year over year, down slightly from June’s 3.7%, with core holding steady at 3.3%. After the close, Nvidia reports Q2 fiscal 2027 earnings: consensus sits at $92 billion in revenue and $2.09 EPS, both roughly double the year-ago quarter. The stock has fallen after each of its last four earnings reports. Futures are down this morning, with Nasdaq 100 contracts off 0.5%. By tonight, the market will have answered two questions: is inflation easing fast enough for the Fed to hold, and does the AI trade have real earnings behind it?
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The Scoreboard
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• Tuesday close: S&P 500 rose 0.2% to about 7,668. Nasdaq gained 0.5% to 26,049. Dow added 91 points to 53,508. Nvidia rose 1.5%, snapping a seven-day losing streak ahead of today’s report.
• Consumer confidence: Fell to 89.4 in August, a 7-month low. Expectations Index crashed 5.8 points to 68.2, well below the 80 recession-warning threshold for an 18th straight month. Present Situation rose to 121.2. The consumer expects less income, fewer jobs, and worse conditions ahead.
• PCE consensus: Headline 3.6% year over year, down from 3.7% in June. Core 3.3%, matching June. Month over month, headline expected at 0.2%, core at 0.2%. The release also includes the second estimate of Q2 GDP. A PPI core surge of 0.4% in July (driven by a 6.5% spike in portfolio management fees) may push core PCE above the 3.3% consensus.
• Nvidia consensus: Revenue $92 billion, up 97% year over year. Adjusted EPS $2.09, up 99%. Data Center revenue expected at $85.4 billion, up 107%. Options pricing roughly a 7% move in either direction. The stock has fallen after each of its last four reports despite beating estimates every time.
• Oil: WTI fell to $82.60, Brent toward $87. The sanctions premium has fully deflated. Oil is now 12% below its $94 peak from Monday morning. The market has priced Operation Economic Outcast as rhetoric, not enforcement.
• Gold: Near $4,700, holding its gains. The 10-year yield fell to 4.658% yesterday. The dollar is near its August low. Jackson Hole begins tomorrow; Warsh speaks Friday at 10:00 a.m. ET.
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Details
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Two Numbers, One Day
Most earnings seasons have a single defining day. This quarter, it is today. The PCE report at 8:30 a.m. determines whether the Fed has room to hold rates steady in September or faces pressure to hike. Nvidia’s report after the close determines whether the AI trade, which has driven the Nasdaq’s outperformance for two years, is built on earnings or expectations. The two are connected: if inflation runs hotter than the 3.3% core consensus, the 30-year yield reverses higher, and even a strong Nvidia beat struggles to lift the market. If inflation comes in cool, the rate path clears, and a Nvidia beat sends the AI trade back toward its highs. The sequence matters.
The PCE risk. Headline PCE is expected to fall from 3.7% to 3.6% year over year, which would be the lowest since January. Core is expected to hold at 3.3%. The risk is on the upside: July’s producer price report showed a 0.4% surge in core PPI excluding food, energy, and trade services, driven by a 6.5% spike in portfolio management fees. That component flows directly into the core PCE calculation. If core PCE ticks up to 3.4% or higher, the “many participants” who told the FOMC minutes they expected higher rates to be “likely necessary” look prescient, and September hike odds (currently near 31%) rise before Warsh even speaks at Jackson Hole on Friday.
The Nvidia setup. The consensus sits at $92 billion in revenue, 0.9% above Nvidia’s own $91 billion guidance midpoint. Forty analysts covering the stock have converged on a number that implies management was very slightly conservative and no more. That is a narrow beat window. The Q3 guide is the number that sets the direction: the ramp of Blackwell-architecture chips into hyperscaler data centers, with Microsoft, Amazon, Google, and Meta all guiding to higher AI capital expenditures, should push the Q3 guide above $95 billion if the buildout is accelerating. A guide at or below $91 billion would signal the revenue acceleration is plateauing, and the stock’s pattern of falling after earnings despite beating estimates would hold for a fifth consecutive quarter. Bloomberg reported last week that Nvidia told clients Vera Rubin and Blackwell servers will see price increases above 15%, which lifts margins but signals supply constraints that could limit volume.
Why the pattern matters. Nvidia has beaten Wall Street’s revenue estimate in 20 of its last 22 quarters. It has also fallen after each of its last four earnings reports. The pattern tells you that beating expectations is priced in; what is not priced in is the magnitude of the beat and the Q3 guide. Options traders are pricing an approximately 7% move in either direction, which implies a roughly $400 billion market-cap swing by tomorrow morning. For context, that swing is larger than the entire market cap of all but about 15 companies in the world.
Where that leaves you. By 5:00 p.m. ET today, the market will have the PCE print and the Nvidia print. Tomorrow morning it will trade on both. Jackson Hole begins Thursday. Warsh speaks Friday at 10:00 a.m. with the PCE number in hand. A six-month T-bill near 5.1% still outearns the equity risk premium. Patient money has been right all year. Today is the day that tells you whether patience is still the right position or whether the market earns a reason to move.
Two numbers. One day. The morning sets the rate path. The evening sets the AI path. By tomorrow, September is priced.
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Harold Winston
Thirty years reading markets for a living.
No hype, just perspective.
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