Key Focus This Week: Non-Farm Payroll Data

Last Weeks Financial Reports

NVIDIA

　　Image source: NVIDIA

　　NVIDIA reported its financial results for the second quarter of the 2025 fiscal year, ending July 28, 2024, and provided guidance for the third quarter.

　　According to the report, NVIDIA's second-quarter revenue reached $30 billion, a 122% year-over-year increase, significantly exceeding analysts' expectations of $28.86 billion. For the third quarter, revenue is expected to range between $32.5 billion and $34 billion, with a year-over-year growth rate between -2% and +5%. Additionally, the gaming segment achieved a 16% year-over-year growth.

　　In terms of profit, the net income for the second quarter was $16.599 billion, a 168% increase compared to the previous year, well above the analysts' expectation of $14.64 billion. The company's adjusted gross margin and adjusted earnings per share also saw improvements.

　　Furthermore, NVIDIA approved an additional $50 billion stock buyback plan and maintained its quarterly dividend at $0.01 per share.

　　Despite the strong performance, NVIDIA's stock price fell over 6% in after-hours trading following the earnings report.

Market Overview Last Week

　　Following the release of the U.S. PCE data, market expectations for a modest Fed rate cut in September intensified. The Nasdaq index rebounded over 1%, the Dow Jones reached a new high, and the S&P 500 approached its historical peak. The S&P 500 saw a four-month winning streak in August. Tesla rose nearly 4%, NVIDIA rebounded 1.5% despite an almost 8% drop during earnings week. Intel surged 9.5%, marking its largest single-day gain in nearly two years. AMD fell 38% in August, its biggest monthly drop ever. Chinese concept stocks rose over 1%, with Pinduoduo up nearly 3%, although it dropped 31% cumulatively during earnings week. The pan-European index hit a historical high, rising for four consecutive weeks.

　　U.S. Treasury bonds have risen for four consecutive months, marking the longest streak in three years, with the 10-year yield reaching a two-week high, although it fell more than 10 basis points in August.

　　After the PCE data, the U.S. dollar index surged to a one-week high, with the weekly gain being the largest in three and a half months, but the dollar fell significantly in August, marking its biggest monthly drop in nine months. The offshore RMB briefly surpassed 7.08 during trading, rising 1370 points in August.

　　In the Asian market, nearly 4,700 A-shares rose, with real estate stocks performing strongly, while the six major banks fell across the board, and the RMB rose 130 points in a day.

Key Events This Week

　　The focus this week includes the U.S. August non-farm payroll data, manufacturing PMI, ISM manufacturing index, Chinas August Caixin PMI and foreign exchange reserve data, Federal Reserve Beige Book, and Eurozone Q2 GDP. Additionally, the business departments of China and the U.S. will hold a working meeting in Tianjin.

　　Special Focus Events:This Friday (September 6), the U.S. Labor Department will release the August non-farm payroll report. Due to Julys non-farm data falling short of expectations and the unemployment rate triggering the “Sam Rule” recession signal, market panic has increased. Traders are betting on the possibility of a 50 basis point rate cut in September and predicting a reduction of over 110 basis points this year.

　　Bloomberg survey data shows economists expect U.S. August non-farm payrolls to rise from 114,000 in July to 165,000, with the unemployment rate decreasing by 0.1 percentage points to 4.2%, indicating continued strength in the labor market.

　　This Friday, Fed Vice Chair Williams and Fed Governor Waller, both permanent FOMC voting members, will deliver speeches. Previously, Fed Chair Powell mentioned at the Jackson Hole meeting that: “The timing for policy adjustments has arrived, and the timing and pace of rate cuts will depend on subsequent data, outlook changes, and risk balance.” This paved the way for a September rate cut, and the market quickly adjusted expectations, raising the forecast for 2024 rate cuts to 104 basis points and predicting four 25 basis point cuts by year-end, with a total reduction of 213 basis points by the end of 2025.