Feb 25 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole. Asian share markets are all in the green following on from the rebound in U.S. stocks, with investors
Morning Bid: Asia Tech Inflates Its AI Bubble as Nvidia Looms
Feb 25 (Reuters) - A look at the day ahead in European and global markets from Wayne Cole.
Asian Markets Rally on AI Hopes
Asian share markets are all in the green following on from the rebound in U.S. stocks, with investors accepting that Wall Street is schizophrenic on AI right now and wild mood swings are inevitable. The dollar is down modestly, Treasury yields a shade higher and oil up 0.6% or so.
KOSPI and Nikkei Hit Records
South Korea, Taiwan and Japan are just happy they make the equipment AI runs on, so sky-high capex is all earnings to them. The Kospi is already up almost 5% this week at a fresh record, bringing its gains for 2026 to 44%. Taiwan's gains are 5% and almost 22%, respectively. Eat your heart out, Nasdaq!
The Nikkei is up 15% on the year so far and getting a lot of good press from analysts calling for a re-rating of Japan Inc on better earnings and governance. Deutsche notes Japanese investors hold $2.25 trillion in foreign shares and even a modest shift to domestic stocks would be a potential bonanza for the Nikkei and the yen.
Nvidia Earnings in Focus
Much now depends on AI-diva Nvidia, which reports later today, and how far it can beat expectations. Going by LSEG data, forecasts are for profits to rise 62% in the quarter to end January, and revenue to jump 68%.
First-quarter revenue guidance is for a rise of about 64% to $72 billion. Nvidia has outpaced sales forecasts for 13 straight quarters, so it's the size of the beat that matters, with $2 billion on both Q4 and Q1 guidance being a bare minimum.
Options-Implied Move of 4.8%
Options imply a share move of +/-4.8% on the results, which would actually be tamer than in the recent past but then its market cap is so much larger. In this case, 4.8% equals $226 billion in value. Nvidia's total market cap of $4.7 trillion tops the annual GDP of Japan or India.
Key Data and Policymakers to Watch
AI was a fleeting topic in President Trump's lengthy State of the Union, as he announced a "rate-payer protection pledge". This, apparently, means major technology companies must build their own power plants for their data centres. How this would work, or be enforced, was not mentioned.
Oil Dips on Iran Diplomacy Talk
Oil prices seemed to dip slightly when Trump said his "preference" was to settle nuclear issues with Iran "diplomatically", though that is rather belied by the huge U.S. military build-up in the region. Otherwise, markets reacted little, as they usually do with SOTUs.
Key developments that could influence markets on Wednesday:
- Nvidia results
Euro Zone CPI and Confidence
- German, French consumer confidence, euro zone final CPI
Central Bank Speeches
- Appearances by Governor of Riksbank Erik Thedéen, Norway Central Bank Governor Ida Wolden, ECB Board Member Pedro Machado and Fed presidents Thomas Barkin, Jeffrey Schmid and Alberto Musalem
(Editing by Muralikumar Anantharaman)
