NVIDIA's financial report is about to come! Goldman Sachs: US stock investors are preparing for the return of volatility
Nvidia's financial report is about to be released, and Goldman Sachs strategists say market volatility may intensify. Investors are prepared for the return of volatility. Goldman's risk appetite indicator has reached its highest level since 2021, but the momentum has slowed. CBOE Volatility Index options data show an increase in demand for hedging against market declines. In addition, the release of Nvidia's financial report may also have an impact on the market
According to the Zhitong Finance and Economics APP, Goldman Sachs strategists stated that stock investors are preparing for the surge in market volatility, with upcoming events such as Nvidia (NVDA.US) earnings potentially exacerbating market fluctuations.
In a report on May 20th led by Andrea Ferrario, the Goldman Sachs strategist team wrote that driven by optimism about economic growth and monetary policy, the bank's risk appetite indicator reached its highest level since 2021 last week, but the momentum has slowed down.
The strategists pointed out that CBOE volatility index options data indicate an increase in demand for hedging against sudden market declines as the index hits historic lows.
"This indicates that the market is pricing in low risks of sustained declines but is concerned about temporary volatility spikes. In a highly concentrated market, special events can also have an impact," Ferrario said, citing the upcoming Nvidia earnings to be released on Wednesday Eastern Time.
Due to investors betting that economic data will allow the Fed to cut interest rates later this year, the US stock market hit new historical highs this month after a brief setback in April. With corporate earnings season better than expected, market participants note that the risks to the stock market rally are minimal.
Citigroup data shows that long positions in S&P 500 and Nasdaq 100 index futures contracts increased last week. Strategist Chris Montagu wrote in a report that the S&P 500 index is now "almost entirely in a one-way trend," but "profit levels are just beginning to form, limiting position risks."
Other Wall Street strategists are also becoming more optimistic, with well-known bear Michael Wilson of Morgan Stanley changing his bearish view on US stocks this Monday. Marko Kolanovic of JP Morgan is currently one of the few well-known figures bearish on US stocks