Nvidia (NVDA) is set to release its earnings report after the market close on Wednesday, with investors eagerly anticipating the potential impact on the broader markets. Will McGough, Director of Investments at Prime Capital Investment Advisors joins Market Domination to share his outlook on this highly anticipated event.

According to McGough, "all eyes are on Nvidia," and he believes the company's performance will drive market movements. One of the key aspects investors will be watching in the results is any indication of emerging competition, but McGough believes that the earnings will have a positive effect, as the company's AI play "has huge implications across multiple markets."

Shifting gears to the ongoing inflation concerns, McGough acknowledges that companies are creating initiatives to combat inflationary pressures on consumers, suggesting that markets "may be at peak inflation." McGough expects markets to "settle down over the summer" ahead of the anticipated volatility surrounding the upcoming election cycle.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Angel Smith

Video Transcript

Stocks near the lows of the day as investors wait for the results of Nvidia's first quarter earnings.

It's coming up after the bell.

Expectations we know are high for the tech giant and the stocks move this year accounts for a quarter of the S and P five hundred's gain according to Deutsche Bank.

Joining us now is Will mcgough Director of Investment at prime capital investment advisors.

Will thanks for having us.

So let's let's maybe start there.

Will NVIDIA after the bell today.

What are you expecting?

What does it mean for the market?

I just wanna know who's not talking about NVIDIA.

I've been in New York, New York for a couple of days and all of our meetings A I is the buzzword.

So it's uh all eyes are on NVIDIA today as you just showed, Josh, it's gonna drive the market with 5% weight in the S and P I don't specifically run our stock portfolios.

I'm a multi asset guy, but our P MS are looking at operating earnings.

They're trying to see if competition is gonna drip in a little bit, take away a little bit of market share.

And so that's what our guys are looking at.

Of course, we own NVIDIA, like everybody else and we'll be observing just like everybody else.

Well, and how are you thinking about it or are you thinking about it from a macro perspective?

Right.

Not just Invidia specifically, but the whole A I play, it's as, as you just mentioned with utilities, it's coming down utilities like a two or 3% waiting sector of the S and P. A lot of folks think it's old economy getting bid up with utilities, but it's really a tech driven uh buzz move here.

So I think it's uh got huge implications across the economy.

It's uh could command multiples higher.

Uh You know, for example, last year it was no earnings growth, it was all multiple expansion earnings seasons coming through this year with multiples saying about the same.

So could we enter a period where multiples could be rationally viewed higher when everybody else thinks they should come back towards average because of A I, I think that's something that investors need to think about.

Well, when you think about NVIDIA, do you think about it now?

And do your P MS think about it as kind of a gauge, a broader barometer rather than just, you know, does it say something more than just about NVIDIA itself at this point?

For sure, you have to think about trends and A I is a trend is driving speculation.

What could be market breath with small cap sos getting built up.

It could be A I with large cap growth max seven.

Uh the US economy of stock market is like a super tanker.

It takes a while for these trends to percolate.

They go on for a while and it takes a while for a new trend to develop.

So you have to be aware of these trends in the market to ultimately position your portfolios.

Speaking of trends, what is the inflation trend?

That is the other big question right now?

That's gotten overshadowed by NVIDIA.

We got a little bit of a hint of it in the Fed minutes where participants said, well, maybe we are gonna need to tighten more.

The market seems to be sort of shrugging that.

I mean, how did you read those comments?

They were a little dated.

I mean, I I casually checked in on it before I was coming here to prep and it was more hawkish than I expected as you would most investors in its markets down a little bit today because of it.

Uh the Fed likes to float speakers that have different theories out there to see how the market may react to cuts or no cuts.

And we're kind of in a camp where we may see the unexpected of a hike if this rate, you know, inflation.

Jay Powell told you, he, he basically took that off the table, we could see it.

I mean, that's what's gonna happen if inflation stick here and rates stay higher, which I think is a good thing.

Ultimately, if you have a higher rate environment, we haven't seen it and gosh knows how long.

Uh So we can kind of get back to the old regime from like the sixties and seventies where you've got competition for capital with debt investors and equity investors.

It is healthy.

We deal with a lot of retirement investors.

So having cash rates higher is a good thing.

Uh capital market assumptions increase higher when rates are when risk free is higher too.

So I think higher rates are good.

We're just uh conditioned to a bias of a low rate environment that's changing.

And a lot of folks have grown up in this industry with low rates and that's all they.

Yeah.

So we have to see how that's going to affect, you know, cyclical and secular trends going forward too.

But that said, I think, you know mcdonald's has come out with the value meal target's gonna reduce prices on 3000 items or something like that.

So we could be at peak inflation, uh peak rate move.

Um And we could just be talking about all this could just be a whole bunch of nothing.

You know, the old adage sell in May and go away.

I think it's a good strategy this year.

It's uh we got all this news baked in markets should just settle down over the summer enjoy your summer break because when we come back in the fall, we got an election.

So all that volatility I'm taking off for the summer.

Well, thank you.

Appreciate the, the green light on that.

Thanks so much for being here.

Appreciate it.