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What you need to know today
Nvidia's revenue tripled
Nvidia's fiscal third-quarter revenue grew 206% year on year to $18.12 billion, handily beating expectations, and net income rocketed from $680 million to $9.24 billion. Moreover, Nvidia expects revenue for the current quarter to increase to $20 billion, an implied 231% growth. But Nvidia finance chief Colette Kress warned exports restrictions will cause sales to China to "decline significantly."
No mention of cuts
Federal Reserve officials think monetary policy must "be kept sufficiently restrictive," and made no mention of rate cuts, according to minutes of the Fed meeting from Oct. 31 to Nov. 1. Fed officials also project economic growth in the fourth quarter to "slow markedly" from last quarter's 4.9% increase in gross domestic product.
Streak broken
U.S. stocks fell Tuesday, snapping major indexes' winning streaks, as investors digested the Fed minutes. Asia-Pacific markets traded mixed Wednesday. Japan's Nikkei 225 climbed 0.4%, while China's Shanghai Composite fell around 0.3%. Separately, analysts think the U.S. and China have stabilized their relationship and might even "recouple," which corporations hope will reduce uncertainty.
Binance's CZ pleads guilty
Binance CEO Changpeng Zhao will step down from his role and plead guilty to criminal charges as part of a $4.3 billion settlement with the U.S. Department of Justice, according to court documents. Richard Teng, the company's former global head of regional markets, will be Binance's new CEO, said Zhao in a post on X, formerly Twitter. "I can't see myself being a CEO driving a startup again," Zhao added.
Israel-Hamas hostage deal
Israel and Hamas have agreed to a cease-fire that will happen in the next 24 hours, and which will last for at least four days, according to the Qatari government. In addition, 50 civilian women and children hostages currently held in the Palestinian enclave will be released, in exchange for a number of Palestinian women and children detained in Israeli prisons, the announcement said.
[PRO] Temu's rise
Temu, the U.S. arm of Chinese e-commerce giant Pinduoduo, has grown explosively in the U.S. The company sells a wide range of merchandise at a price lower than most retailers, which could spell trouble for them, according to Bank of America. These big-name retailers — in the U.S. and Europe — are most vulnerable to Temu's rise.
The bottom line
Minutes of the Federal Reserve's meeting gave no indication of a rate cut, putting the brakes on stocks' November rally. And though Nvidia's third-quarter earnings astounded, it might not be enough to restart the momentum in markets.
On the surface, nothing about the Fed minutes surprised. The summary reiterated what Chair Jerome Powell has been so careful to emphasize: that "the stance of monetary policy be kept sufficiently restrictive to return inflation to the Committee's 2 percent objective over time."
Instead, investors were let down by what wasn't present. "The minutes gave no indication that members even discussed when they might start lowering rates," CNBC's Jeff Cox noted.
Markets, disappointed by the minutes, fell. The Dow Jones Industrial Average slipped 0.18%, the S&P 500 declined 0.2% and the Nasdaq Composite dropped 0.59%. Their losses yesterday meant the S&P and Nasdaq snapped their five-session winning streak.
"If nothing else, the Fed has regained the respect of markets, which it had lost in spectacular fashion by misreading inflation in 2021," said Jamie Cox, managing partner for Harris Financial Group.
"Forward guidance, Fed minutes, and all other forms of the Federal Reserve communication strategy now has the credibility to manage market expectations again." Jamie Cox added.
Even Nvidia's earnings, which came out after the bell, might not lift markets. Yes, the chipmaker's revenue increased an astounding 300% from a year earlier. But shares of Nvidia fell 1.74% in extended trading, suggesting investor expectations were so stratospheric that even such a figure fell flat. And recall how Nvidia shares were flat in August even after the chipmaker reported an incredible second-quarter earnings beat.
"It's a great quarter" for Nvidia, trader Guy Adami said Tuesday on CNBC's "Fast Money." "But at what point do you say to yourself, you know what, now the valuation is starting to get a little bit stretched."
It's a good thing, then, that the U.S. market has a holiday-shortened week, with markets closed Thursday — time for investors to pause and take stock of things.
