In This Article:
US stocks (^GSPC, ^IXIC, ^DJI) have rallied since April despite market uncertainty and looming tariffs, but some investors are starting to feel uneasy.
Barron's associate editor Al Root joins Market Domination to break down market nerves and why Nvidia (NVDA) earnings could be pivotal for the broader artificial intelligence (AI) trade.
To watch more expert insights and analysis on the latest market action, check out more Market Domination here.
Joining me here now for today's program is Baron's very own associate editor, that would be Al Root, who is here on set. Al, always good to see you, my friend.
Great to see you, Josh.
So, uh, let me get, as a long time watcher of the markets, a student of the markets out. Let me get your take on these markets. Are you impressed and surprised by how resilient they have been despite headlines, reports, Trump tariffs, trade, all the drama?
Yeah, I'm actually a little, uh, nervous, right? Um, we had, uh, a liberation day, uh, and then the market sold off. We're we're up basically 16, 15, 16% from the April lows. Um, we still have tariffs. We sort of have unbelievable uncertainty, right? That April consumer confidence report is like 86. Today was 98. So consumers are all over the place, policy is all over the place. Uh, we have deficits exploding potentially with tax bills. And and amidst all that, we have sort of like a FOMO rally. So I got to tell you, I'm a little nervous. Um, you know, stocks go up over the long run, you know, we all know that, but I I got to tell you, I am surprised with the strength of the rally.
By the resilience. Let me give you this. Tomorrow, of course, all eyes on deck. Maybe the most important data point of the week, Nvidia earnings. Your expectations or how important is that report, not just for Nvidia, which is a well-known, well-owned name, but for the broader market?
Yeah, you probably can't overstate, uh, the importance of Nvidia's earnings because the AI trade, uh, aside from policy and all the things we just talked about, you know, the AI trade is driving everything. Jensen drives that, Nvidia drives that. Um, you know, interestingly, the growth, you know, we expect 65% sales growth, but only 25% earnings growth, some of that Blackwell change over and supply constraints. So, you know, they're going to be trying to thread the needle, right? They're going to have to give good guidance. They're going to have to, you know, uh, paint a picture that, uh, demand is still growing as far as the eye can see. Um, you know, interestingly, over the last couple of prints, there have been, you know, consistent beats with good guides, but the stock has sold off a little bit. Um, we've sort of, you know, that, uh, that, uh, you know, just unbelievable growth AI is here story is sort of faded. So it's a little tougher, but, uh, it it's it's it's the event.