By Pictet AM

In France, unemployment is almost back to its lowest level since 1982. The foreign trade deficit fell spectacularly over the first six months of the year. The Olympic Games are a success. In the United States, there is nothing to suggest that a recession is imminent. Indicators are up. Restaurant reservations are up, as are hotel occupancy rates and bookings for Broadway shows. Even Japan, which experienced some turbulence at the beginning of the month, is returning to optimism. The main Nikkei 225 index is up 13% year-to-date – better than the CAC 40. The latest GDP figures also show that the long-awaited improvement in consumer spending is finally materializing. The sourpusses are disappointed.

Outlook

We’re likely to get another positive signal this week, with Nvidia’s results on August 28. The company is not in the habit of disappointing the market. It usually exceeds expectations. In the first quarter of 2024, Nvidia posted sales up 262% year-on-year and a net margin that jumped 57% over the same period. Early indications suggest that the second quarter will be a good one. According to Quanta Computer Group, one of the world’s leading computer manufacturers, “in the second quarter, due to the steady supply of graphics processors, the momentum of AI servers was strong, and the share of sales in the server business exceeded 50%”. The company expects this share to rise again in the third quarter, with annual sales of the AI server business recording triple-digit growth. This is positive news for Nvidia. To make matters worse, the AI giant’s valuation is rather attractive in view of earnings per share expectations.