The Overnight Report: Nvidia Beat & Raise

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Ahead of Nvidia's earnings report, all the major indices finished up, with Nasdaq leading the recovery.

The ASX200 continued its downward move yesterday, but futures are currently pointing to a positive start for Thursday.

Good Morning,

The ASX200 fell -21pts of -0.25% to 8,448 on Wednesday. Seven of the 11 sectors fell, led by banks, while energy gained and materials were boosted by gold miners.

Nvidia Results: extract from Nvidia 

NVIDIA (NASDAQ: NVDA) today reported record revenue for the third quarter ended October 26, 2025, of US$57.0 billion, up 22% from the previous quarter and up 62% from a year ago.

For the quarter, GAAP and non-GAAP gross margins were 73.4% and 73.6%, respectively.

For the quarter, GAAP and non-GAAP earnings per diluted share were both $1.30.

“Blackwell sales are off the charts, and cloud GPUs are sold out,” said Jensen Huang, founder and CEO of NVIDIA. “Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI startups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.”

Data centre third-quarter revenue was a record US$51.2 billion, up 25% from the previous quarter and up 66% from a year ago.

“Nvidia beats the whisper by 2.7%, beats in print by 3.8%. Guidance: Raises Jan revenue by 3.0% above the whisper and 4.8% above the in print,” Gene Munster, X

The stock is trading up 3.5% in the aftermarket, and the world can breathe again!

What happened overnight, NAB Markets Today Research

The October FOMC Minutes revealed many Fed officials thought it appropriate to keep interest rates steady for the remainder of 2025. Still, several participants said another cut in December “could well be appropriate in December if the economy evolved about as they expected.” 

The question that follows is whether there will be enough information in December for Fed officials to decide.

Linked to the above, the Bureau of Labour Statistics announced it will not publish an October jobs report, folding those figures into the November release now scheduled for 16 December — after the Fed’s final meeting of the year. 

This leaves policymakers without a key piece of evidence for the December FOMC meeting, prompting traders to sharply scale back expectations for a rate cut next month. Fed funds futures now price only a 28% chance of a December cut, down from 46% yesterday.

The September jobs report will still be published on November 20.

The Minutes also revealed, “almost all” participants supported halting balance sheet runoff from December, reflecting concerns about liquidity and funding market volatility. Concerns over the economic outlook in the minutes flagged elevated asset valuations, rising hedge fund leverage, and private credit risks, but noted that longer-term inflation expectations remain anchored, albeit with some risk of drift higher.

Earlier in the session, President Trump renewed his attacks on Fed Chair Powell, calling for his removal and blaming him for housing market woes and policy missteps. Trump is reportedly planning to meet three Fed candidates post-Thanksgiving on 27 Nov. 

Speaking to Fox News, Bessent said “I can safely say I will not be Fed chair” adding that ‘hopefully will have Fed chair answer before Xmas’. Polymarket currently has Hassett at 4~5%,  Warsh around 16% and Waller at circa 15%, as the top three candidates to get the gig.

Moving to US economic news, the US trade deficit narrowed to US$59.6bn in August, as businesses kept inventories lean amid tariff risks and policy uncertainty. Imports fell more sharply than exports, and the trade balance is expected to have made a modest positive contribution to Q3 GDP.

Weekly data suggest imports remain above last year’s average, with some firms still drawing down stockpiles built up ahead of tariffs.

Treasury yields were little changed overnight, although they did tick higher post the FOMC minutes release. The 20-year auction saw a slight tail but record direct bidder participation, though overall demand was the weakest in a year.

In Europe, UK gilts have continued to underperform with the 10-year yield up 4.9bps to 4.60% and the 30-year up 7bps to 5.45%, as markets brace for the 26 November Budget. German and French yields were little changed, while Italian spreads narrowed slightly.

UK CPI inflation slowed to 3.6% in October, in line with Bank of England forecasts, with energy prices the main drag. Services inflation eased to 4.5%, below expectations, while food inflation ticked up.

The Bank of England’s decision to hold in November was driven by a desire for more evidence of disinflation, which now appears to be materialising. The upcoming Budget is a key uncertainty, with reports suggesting fiscal consolidation may be delayed ( no income tax hikes).

Should the government take steps to lower energy bills, it could tip the balance in favour of a rate cut at the central bank’s December meeting.

Alphabet shares jumped nearly 7% to a record high after rave reviews for its Gemini 3 AI model, boosting the tech sector. Sector performance was mixed, with communication services and IT leading, while energy and real estate lagged.

European and Asian equities were mixed, with the Eurostoxx600 flat and the Nikkei down -0.3%. The Hang Seng and ASX200 also slipped, reflecting cautious sentiment.

The US dollar extended its rally with the Bloomberg Dollar Index rising for a third day in four, and trading above its 200-day moving average. USD/JPY surged to 156.80, a 10-month high, as the yen weakened on dovish Bank of Japan signals and fiscal expansion plans.

GBP/USD fell below 1.31 as UK inflation cooled. The NZD was the weakest major (-1.03%), hitting a seven-month low below 0.56, while the AUD dropped -0.54% to 0.6468, after trading to an intraday low of 0.6451 prior to the FOMC minutes release. 

Yesterday, Australia’s Wage Price Index (Q3 WPI) came in on the softer side of 0.8% q/q (0.77% q/q, 3.4% y/y), which is in line with the RBA’s November SoMP forecast. Private sector wage growth slowed to 0.7% q/q (3.2% y/y), while public sector growth continued to grow a little more strongly at 0.9% q/q (3.8% y/y).

In annual terms, wage growth is now -0.54 ppts below its peak in Q3 2023.

Our economists noted that the private sector WPI (albeit a relatively narrow measure of wage costs) does not point to the same degree of tightness or cost pressures evident in other data. That said, the RBA will likely remain focused on broader measures of wage costs that point to a higher degree of pressure when accounting for compositional change and productivity growth. These include average earnings and unit labour costs, which have grown more strongly.

Looking at commodities, oil prices fell sharply, with Brent down over -2% to just above US$63/bbl, as US inventory data and peace talk headlines weighed on sentiment. WTI also dropped, with gasoline inventories rising and traders eyeing key support levels.

Metals were mixed, with copper and aluminium up, but zinc and lead lower. Iron ore was steady, while gold edged higher.

The AI-Led Pullback: Yardeni Quick Takes research extract

Will today’s widely feared AI crisis turn out to be a no-show, too, just like the most-widely anticipated recession of all time, anxiously awaited over most of the past four years? We think so.

Stock investors are increasingly worrying about an AI-led Tech Wreck, like the one in 2000 after the 1999 Tech Bubble burst. Now, many of them believe the stock market is in an AI-led Tech Bubble that may already be bursting.

The pessimists are also warning that consumers are stretched and may be retrenching. Furthermore, alarmists are seeing cracks in credit markets reminiscent of those during the Great Financial Crisis.

These are all legitimate concerns. Nevertheless, for now, we are not altering our 55% subjective probability that the S&P500 should reach 7,000 by the end of this year and 7,700 by the end of next year. 

However, under the circumstances, we are lowering the odds of a melt-up scenario to 15% from 25%,  and raising the odds of a bearish scenario to 30% from 20%

The S&P500 and Nasdaq both closed below their 50-day moving averages on Tuesday and are down -4.0% and -6.4% from their October 29 record highs.

Bitcoin is down over -26.8% from its record high on October 6. Some technicians warn that this is bad news for the Nasdaq. We’ve noted the high correlation between the cryptocurrency and the TQQQ before, but we believe they can and will probably diverge.

On November 1, we noted the high reading of the Bull-Bear Ratio (BBR) was a short-term bearish signal of a pullback in the stock market. Tuesday’s CNN’s Fear & Greed Index, a compilation of seven different technical indicators, signaled extreme fear, which often sets the stage for a rebound in stock prices.

Tuesday’s stock market weakness was exacerbated by a -5% decline in Home Depot’s share price after the company reported disappointing Q3 results. Management also provided a cautious outlook, indicating that the company faces external pressures from a soft housing market.

Furthermore, consumers seem to be concerned about the economy, leading them to postpone or reduce spending on big-ticket, discretionary home improvement projects.

Then again, the forward revenues of the S&P500 Retail Composite rose to another record high during the week of November 17. That augurs well for the monthly retail sales report from the Census Bureau.

Also encouraging is that the Redbook Retail Sales Index rose 6.1% y/y during the week of November 14.

And, what about the great debate about how quickly data centres are depreciating their GPU assets? 

We side with the hyperscalers rather than Michael Burry, who started the depreciation debate. 

Data centres existed before AI caught on in late 2022, when ChatGPT was first introduced. In 2021, there were as many as 4,000 of them in the US due to rapidly increasing demand for cloud computing. 

Many are still operating with older chips that have been fully depreciated. The revenues and earnings of the hyperscalers continue to rise exponentially, while their depreciation expenses increase more linearly.

Finally, concerns about rising loan defaults in the private credit market are unlikely to trigger another Great Financial Crisis. The defaults are likely to represent small portions of large loan portfolios.

Investors recognise the risk of defaults when they invest in the private credit market and won’t be surprised if the defaults reduce the rates of return on their investments. An economy-wide credit crunch is unlikely.

Corporate news in Australia

-Helloworld Travel ((HLO)) makes a $353m bid for Webjet Group ((WJL)).

-Quadrant Private Equity is looking for a buyer for Fitness & Lifestyle Group.

-Cochlear ((COH)) said its has no plans to follow ResMed ((RMD)) and CSL ((CSL)) around investing billions in new US manufacturing capacity.

-Aldi Australia is boosting private brands to counter Woolworths Group ((WOW)) and Coles Group ((COL)).

-Block ((XYZ)) is supporting bitcoin as a payment system which should increase its Australian exposure.

On the calendar today:

-US Sept Employment

-A2 MILK COMPANY LIMITED ((A2M)) AGM

-ASTRAL RESOURCES NL ((AAR)) AGM

-ABACUS GROUP ((ABG)) AGM

-AFT PHARMACEUTICALS LIMITED ((AFP)) 1H26 Earnings/Investor Call

-APIAM ANIMAL HEALTH LIMITED ((AHX)) AGM

-ASPEN GROUP LIMITED ((APZ)) AGM

-AUSTRALIAN VANADIUM LIMITED ((AVL)) AGM

-BELLEVUE GOLD LIMITED ((BGL)) AGM

-BOSS ENERGY LIMITED ((BOE)) AGM

-BOTANIX PHARMACEUTICALS LIMITED ((BOT)) AGM

-BUBS AUSTRALIA LIMITED ((BUB)) AGM

-CASH CONVERTERS INTERNATIONAL LIMITED ((CCV)) AGM

-CHARTER HALL GROUP ((CHC)) AGM

-CHALICE MINING LIMITED ((CHN)) AGM

-CLOSE THE LOOP LIMITED ((CLG)) AGM

-DUG TECHNOLOGY LIMITED ((DUG)) AGM

-DURATEC LIMITED ((DUR)) AGM

-DURATEC LIMITED ((DUR)) AGM

-DEXUS INDUSTRIA REIT ((DXI)) AGM

-DEEP YELLOW LIMITED ((DYL)) AGM

-EMECO HOLDINGS LIMITED ((EHL)) AGM

-ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED ((EOS)) Investor Briefing

-EVOLUTION MINING LIMITED ((EVN)) AGM

-FIREFLY METALS LIMITED ((FFM)) AGM

-GENERATION DEVELOPMENT GROUP LIMITED ((GDG)) AGM

-GENUSPLUS GROUP LIMITED ((GNP)) AGM

-GROWTHPOINT PROPERTIES AUSTRALIA ((GOZ)) AGM

-HORIZON GOLD LIMITED ((HRN)) AGM

-HANSEN TECHNOLOGIES LIMITED ((HSN)) AGM

-HUB24 LIMITED ((HUB)) AGM

-INSIGNIA FINANCIAL LIMITED ((IFL)) AGM

-IPH LIMITED ((IPH)) AGM

-LASERBOND LIMITED ((LBL)) AGM

-LIBERTY FINANCIAL GROUP LIMITED ((LFG)) AGM

-MIRVAC GROUP ((MGR)) AGM

-MINERAL RESOURCES LIMITED ((MIN)) AGM

-MONASH IVF GROUP LIMITED ((MVF)) AGM

-MAXIPARTS LIMITED ((MXI)) AGM

-NEW HOPE CORPORATION LIMITED ((NHC)) AGM

-NEWS CORPORATION ((NWS)) AGM

-PATRIOT RESOURCES LIMITED ((PAT)) AGM

-PERSEUS MINING LIMITED ((PRU)) AGM

-QUBE HOLDINGS LIMITED ((QUB)) AGM

-RADIOPHARM THERANOSTICS LIMITED ((RAD)) AGM

-RESMED INC ((RMD)) AGM

-ST. BARBARA LIMITED ((SBM)) AGM

-SONIC HEALTHCARE LIMITED ((SHL)) AGM

-SKS TECHNOLOGIES GROUP LIMITED ((SKS)) AGM

-SYNTARA LIMITED ((SNT)) AGM

-TALGA GROUP LIMITED ((TLG)) AGM

-TIVAN LIMITED ((TVN)) AGM

-VITRAFY LIFE SCIENCES LIMITED ((VFY)) AGM

-VIVA LEISURE LIMITED ((VVA)) AGM

-WA1 RESOURCES LIMITED ((WA1)) AGM

-WIA GOLD LIMITED ((WIA)) AGM

-WORLEY LIMITED ((WOR)) AGM

-BLOCK INC ((XYZ)) Investor Briefing

FNArena’s four-weekly calendar: https://fnarena.com/index.php/financial-news/calendar/

The Australian share market over the past thirty days…

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