Markets Defused aims to give an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Nvidia smashes forecasts, ups dividend by 150%
- FTSE 100 closes in red
- Lululemon shook as product boss exits
- Will Buzzfeed reboot as anti-woke?
- Brits are desperately searching for Ozempic
- Ethereum ETF gets greenlight (in UK)
- Inter Milan gets American owner
Nvidia smashes forecasts, ups dividend by 150%
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) stock initially shot up around 7.5% in ‘afterhours’ trade after the microchip maker once again smashed through Wall Street forecasts.
Besides impressive financials, Nvidia promised returns to shareholders with a 150% increase in its quarterly dividend, to 10 cents from 4 cents.
Nvidia also intends to re-organise its share capital with a 10-for-1 stock split which it says will make owning the stock, presently priced above $1,000 per share, more accessible to investors and employees as they should be closer to $100 each.
Nvidia reported first-quarter revenue of $26 billion, up 262% from the same period a year ago, and comfortably above market expectations pitched at $24.6 billion.
The emphatic performance continues to be driven by growth in its data-center division, which is being superpowered by the demand for AI computing. The business unit marked 427% year-on-year revenue growth, rising to $22.6 billion (beating forecasts for $21.3 billion).
First quarter earnings were reported at $6.12 per share, versus $1.09 a year ago and beating market forecasts of $5.60.
Moreover, Nvidia also impressed the market with its latest guidance for its second quarter which foresees $28 billion of revenue which is ahead of the $26.7 billion that Wall Street analysts had pencilled in.
Chief executive Jensen Huang told investors that Nvidia is “poised for the next wave of growth”, which is quite a claim for a company that’s been growing at a rate that it has over the past year.
In New York, Nvidia shares were up $54.00 or 5.73% changing hands at $1003.50 in ‘afterhours’ dealing.
FTSE 100 closed in red a market before Sunak confirmed 4 July election
London’s blue-chip index ended Wednesday 46 points lower, at 8,370, as the City of London awaited confirmation that Prime Minister Rishi Sunak is to call a summer general election.
By late afternoon, reports from outlets including the BBC gathered momentum that Sunak will be calling a General Election, likely on July 4, according to the BBC and other UK media outlets.
Sunak confirmed the reports with a press conference outside Number 10 Downing Street, in which he said “now is the moment for Britain to choose its future.”
An election on 4 July will mean that the British public will be summoned to the polls in the middle of England’s Euro 2024 campaign.
Sunak is expected to formally ask the King to dissolve parliament later on Wednesday, and, a parliamentary recess due next week is widely expected to be cancelled as ministers force through remaining legislation, before parliament is dissolved.
Economics will be central to both Conservative and Labour campaigning in the run-up to the election, amidst a backdrop of sluggish growth and uncertainty over interest rates, inflation and the cost of living.
British bookie BetVictor makes Labour’s Keir Starmer a 1/10 favourite to take power with a majority in the election, whilst it prices the Conservative party at 9/1.
Others, meanwhile, had more a detailed analytical response.
‘’Although some of the more severe headwinds have eased, the Conservatives will go into this election facing an electorate still struggling with the cost-of-living,” said Hargreaves Lansdown head of markets Susannah Streeter.
“Inflation has come down towards target, but it has disappointingly missed forecasts, which means prospects for an interest rate cut have been pushed further into the distance.
“House prices have started creeping up again, amid supply shortages in key parts of the country, which means that getting onto the ladder is still unaffordable for many young people.
“This is while others face the daunting prospect of remortgaging on much higher rates and tenants are watching rents climb at super painful rates.”
Streeter added: “The latest public sector borrowing snapshot arguably offers the government even less wiggle room to bestow treats on voters.
“Borrowing in April totalled £20.5 billion, above the forecast of the Office for Budget Responsibility and overall borrowing for the year was revised upwards.
“It seems further tax cuts would come at the expense of public services.”
Lululemon shook as product boss exits
Lululemon Athletica Inc (NASDAQ:LULU) stock dropped 6% on Wednesday in reaction to the news that its chief product officer Sun Choe is leaving the company and the yoga pants and apparel brand would be reshaping its management team.
The company told investors it doesn’t intend to rehire for the CPO role and instead Jonathan Cheung, Lululemon’s global creative director, would now be responsible for product development, design and innovation.
“I am confident in the strength of our design, merchandising, and brand teams, and excited by how the new structure will enable us to solve for the unmet needs of our guests in a more efficient, unique, and powerful way,” McDonald said in a statement.
In New York, Lululemon stock was down $20.04 or 6.2% changing hands at $302.95 per share.
Will Buzzfeed reboot as anti-woke? The answer may surprise you …
Buzzfeed Inc (NASDAQ:BZFD) shares soared over 45% in Wednesday’s dealing, trading as high as $4.56 at one point, as it emerged that ‘anti-woke’ crusader and Republican Vivek Ramaswamy had built a 7.7% stake in the business.
It comes as Buzzfeed finds itself in the doldrums with the media group now significantly smaller than it used to be following the closure of its news division last April.
Indeed, according to a stock market filing, Roivant founder Ramaswamy paid just $3.95 million for 2.72 million Buzzfeed shares to take his interest to 7.7%.
It is a far cry from the $400 million that Comcast (via NBC) invested in the business a decade ago, when it bought into a third-stake that valued the clickbait-pioneering online publisher at around $1.7 billion.
In New York, at around midday on Wednesday, Buzzfeed was up 29% changing hands at $3.23 per share.
Brits are desperately searching for Ozempic
Google searches for Ozempic are up a staggering 865% in recent days after latest research in Europe espoused a multitude of health benefits.
Research conducted by the European Congress of Obesity (ECO) last week, on 14 May, claimed that GLP-1 weight loss drugs such as Ozempic and Wegovy may reduce the risk of heart attack, stroke and death by cardiovascular disease by some 20%.
Since then, interest in the weight loss drugs has evidently spiked in the UK, with Google searches including queries over eligibility and the cost of the treatments.
The success of Ozempic and Wegovy has been the driving force behind Novo Nordisk (NYSE:NVO)’s soaring valuation. Novo Nordisk (NYSE:NVO) shares are up 400% in recent years, and it is now Europe’s most valuable company at around $450 billion.
Ethereum ETF gets greenlight in UK
Regulators have approved the creation of new ‘spot’ price cryptocurrency exchange-traded funds (ETFs), in the UK.
Packaged investments firm Wisdom Tree got the greenlight from the UK’s Financial Conduct Authority to launch two exchange-traded products on the London Stock Exchange – one for spot bitcoin and one for Ethereum. Wisdom Tree already offers the ETFs in Europe (in Germany, Switzerland, Paris and Amsterdam).
Alexis Marinof, Wisdom Tree head for Europe, described it as a significant step forward and said it is expected to remove barriers to entry for UK based institutions.
This UK approval comes as the crypto traders await a bigger decision day(s) as later this week the US Securities and Exchange Commission (SEC).
Its expected that the SEC will rule on spot Ethereum ETFs proposed by VanEck and Ark Invest, with its judgement due on Thursday and Friday respectively. If approved, like Bitcoin ETFs, the greenlight for ETH ETFs in the US could spur a significant increase in institutional demand for the world’s second-largest cryptocurrency.
Ethereum (or ETH) prices have climbed in recent days in anticipation of the SEC decisions, with the price up around 25% this week at $3,722 today.
Inter Milan taken over by American investor Oaktree Capital
Inter Milan has been acquired by American investment firm Oaktree Capital, effectively for €395 million, as the club’s former owner failed to repay a loan.
Despite the financial problems faced by its owners, Inter Milan won this year’s Seria A Scudetto and as champions of Italy the will take their place in next season’s Champions League.
Oaktree financed Chinese firm Suning as football reset following COVID, with the €395 million loan secured against the owner’s interest in the club.
In Italy, Oaktree said it intends to focus on “operational and financial stability”.
Meanwhile, the Nerazzurri (blue-and-black) club is expected to see a busy summer transfer window under the new owners.
The financial situation means there’s no transfer chest to lavish on big-money players, and the club is expected to sell-to-buy whilst also working to trim wages from the squad.
Press reports in recent days suggested that the sale of Denzel Dumfries and Marcus Thuram could be among the names most likely to bank significant funds. Meanwhile, the club is likely to listen to offers for a number of other players. In terms of incomings, the club has so far agreed two free signings with Piotr Zielinski and Mehdi Taremi set to join in the summer.