This company’s earnings report makes Wednesday the big day this week

A roundup of what The Globe and Mail’s market strategist Scott Barlow is reading today on the Web

National Bank economist Taylor Schleich believes options markets are overestimating the domestic economy,

“When it comes to GDP, expectations for both Canada and the U.S. have moderated with over half a percentage point shaved from full-year growth forecasts. The American outlook may have been downgraded by slightly more, but a stronger starting point still leaves the U.S. in relatively better shape … Despite Canada’s weaker growth outlook, poorer job market prospects and better-contained inflation, 2025 policy rate expectations have evolved similarly. As it stands, OIS markets are priced for 50 bps of Fed easing this year while just over one BoC cut is discounted. (Note: Consensus expects 50 bps from both). Relative to market pricing, we think risks are skewed in the opposite direction. To us, the BoC is likely to deliver more easing than is priced (and more than consensus). Fed pricing is closer to ‘fair value’ but listening to the FOMC, there’s a clearer path to one (or no) cuts versus more than two”

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Many global investors will be holding their breath ahead of Nvidia Corp’s earnings release on Wednesday.

BofA Securities provided a preview,

“We look for modest Q1 beat [on revenue] vs. the $43bn guide and cons $43.4bn. NVDA had guided GM [gross margin] at 71%, but the $5.5bn inventory write-off related to H20 ban [on sales to China] will likely pull GM down to ~58%, with headwind expected but not yet reflected in consensus. Pf [pro forma]-EPS closer to 74c versus 88c consensus. No China H20 impact expected in FQ1, with any pull-in helping headline beat but unlikely to help investor sentiment … FQ2 [revenue consensus] has come down from $48bn (pre H20 ban) to $46.4bn, with investor ests. lower at around $45-$46bn, in our view … NVDA could guide FQ2 to as low as $41bn, below recently lowered ~$46bn consensus. The $41bn sales guide would also imply pf-EPS closer to 85c, or 16% below new consensus”

A miss on gross margins or a significant cut in profit guidance would roil global markets.

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Goldman Sachs chief U.S. equity strategist David Kostin has been following hedge fund buys and sells,

“Short interest in the median S&P 500 stock equals 2.3% of float, which is the highest level since August 2019 … Mutual funds and hedge funds both rotated toward the Consumer Discretionary sector during 1Q. Mutual funds increased their exposure to the sector by 75 bp, the largest change of any sector. Hedge funds increased their net tilt to the sector relative to the Russell 3000 by 174 bp. Within Consumer Discretionary, LULU, VFC, and SGI ranked among popular mutual fund increases. HD, LAD, and MELI ranked among popular hedge fund increases. The Magnificent 7 excluding TSLA remained at the top of our list of Hedge Fund VIPs (GSTHHVIP) but in our list of Mutual Fund Underweights (GSTHMFUW). However, mutual funds and hedge funds both trimmed positions on net in AAPL, META, MSFT, and NVDA. n There are seven “shared favorites” this quarter: APP, BAC, CRH, MA, SCHW, SPOT, V. The two new additions this quarter were BAC and SCHW”

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Citi U.S. equity strategist Scott Chronert’s PULSE template gauges price, “unanticipated” (derivatives-based implied volatility), liquidity, sentiment and earnings. Currently, things are drifting into negative territory for investors,

“[Friday’s] market action does not approve of a threat directed at another corporate, and, more importantly, the idea of a 50% EU tariff rate by the oval office. This is sure giving us a feeling of déjå vu. Investors have had to quickly refocus and react to the narrative du jour throughout 2025. Pro-business optimism and euphoria kicked off the year. Then markets tripped into higher rate fears and DeepSeek’s challenge to US tech. A messy tariff rollout ensued. This week, rates came back into focus amidst budget discussions, just to be usurped by social media driven tariff headlines. Still, the S&P 500 is nearly flat year-to-date despite the circus of headline risks and market volatility. Still, some key things have changed. Our longer-term investor sentiment read is no longer euphoric. 2025 growth expectations have been cut and more may be on the come. However, valuation concerns are now back in focus, and the fundamental drivers of the S&P 500 look narrow again, with Growth the lone area of resiliency”.

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Bluesky post of the day:

Diversion: “Dementia Crisis: China Faces Explosive Rise in Alzheimer’s Disease” – SciTechDaily