Nvidia's Growth Decelerates, US Companies Buy Back $1 Trillion in Stock, and Japan Seeks Tariff Reductions

Nvidia's Revenue Forecast and China Opportunity

• 📉 Nvidia has issued a revenue forecast signaling growth deceleration after a two-year boom in AI spending, projecting sales of roughly $54 billion for the fiscal third quarter.
• 💡 Despite potential geopolitical tensions and a proposed 15% commission on AI chip sales to China, Nvidia CEO Jensen Huang sees a significant opportunity to bring advanced AI chips, like Blackwell, to the Chinese market.
• 💰 The company has excluded up to $5 billion in possible China sales from its projection due to uncertainty over geopolitical factors.

Market Confidence and Share Buybacks

• 📈 US stocks are trading near record highs, with corporate America showing confidence in the economy, evidenced by surpassing $1 trillion in share buybacks last week.
• 🏦 Financial and technology stocks are leading large share repurchasing programs, with companies like Apple, Alphabet, JPMorgan Chase, and Nvidia announcing significant buyback plans.
• 💰 Nvidia itself announced a $60 billion buyback, indicating a strategy to reward investors while maintaining capital expenditures.

Economic Uncertainty and Fed Policy

• ⚠️ Markets are largely ignoring policy uncertainty, including the Trump administration's plans, as expectations for rate cuts remain likely regardless of political outcomes.
• 📊 The Federal Reserve's preferred inflation measure, the core PCE index, is due out tomorrow, with potential upside surprises in inflation posing a risk to rate cut expectations.

European Business and Trade Negotiations

• 🥂 French spirits maker Pernod Ricard exceeded earnings expectations and forecasts a pickup in demand, despite a €35 million impact from US tariffs on its full-year sales.
• 🚗 Japan's top trade negotiator, Yoshimasa Hayashi, is in the US to press for lower tariffs, particularly on cars and auto parts, and to end the stacking of previous duties.
• 🇺🇸 The US, however, wants to see a promised $550 billion investment mechanism from Japan operational before implementing changes.