Markets are seeing another volatile day as both positive and negative developments compete for investors’ attention.
Oil prices continued to stabilise following the recent falls on hopes there will be no full scale military conflict between Iran and the US. Brent crude is down to $93 per barrel, while WTI has reached $85.
The FTSE 100 has edged higher, rising 0.32% by mid-morning (12 November) to 10,870 points.
On the negative side, the scandal surrounding Nvidia Chief Executive Jensen Huang took another twist last night, as news he had a second affair hit the wires. The woman involved is reportedly one of his direct reports at the company.
It follows the news Huang had an affair with an alleged Chinese spy, and has prompted the Nvidia board to schedule a meeting on the matter. Nvidia shares fell in out of hours trading to around $160.
S&P 500 and Nasdaq futures prices indicate investors are unsure how to price this in more widely, showing small falls of 0.6% and 0.5% respectively.
AJ Bell investment director Russ Mould said: “The FTSE 100 was somewhat constrained by weakness in the resources sector.
“Commodity prices eased back and Brent crude oil prices are bubbling around the $93 per barrel mark, a long way short of their recent highs as traders continue to weigh diplomatic efforts in the Middle East.
“While Wall Street continued its recovery from last week’s tech rout on Wednesday, the leadership crisis at Nvidia weighed on Asian markets and US futures point to a somewhat nervy start to trading later.”
“Already under severe scrutiny over an affair with an alleged Chinese spy, the revelation of a further relationship with a subordinate at Nvidia has put Jensen Huang’s position as CEO in real peril.”
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Brain Colello, senior equity analyst at Morningstar, noted Nvidia remains on track for blockbuster earnings, regardless of how the situation with Huang develops.
“Deception may have occurred at the CEO level, but it hasn’t crept into Nvidia’s financial forecasts amid the artificial intelligence boom.
“We still forecast high near-term and medium-term demand for Nvidia’s gear, given insatiable AI computing growth.”
Morningstar continues to forecast strong demand for Nvidia’s AI infrastructure and maintains its $310 fair value estimate.
“The key question now, is whether the uncertainty begins to affect customer demand, commercial relationships, or the competitive landscape for AI chips,” he added.
