Nvidia board weighs Huang’s future

Tech leads the rally

We were green across the screen for major US equity benchmarks on Wednesday, with tech stocks leading the charge. The Nasdaq 100 ended up higher by 2.3% and all but recouped last week’s downside move. The S&P 500 gained 1.3%, helped by a 25% surge in CoreWeave on an upbeat outlook and reports that Anthropic’s IPO is multiple times oversubscribed.

Nvidia’s leadership crisis

Nvidia also found some ‘love’ yesterday, up 4.5% on the day, though the stock is still down around 27% from October peaks and could see further downside, given the latest news.

I am sure we have all heard by now about Nvidia’s CEO Jensen Huang admitting to having an affair with Alice Huang last Sunday – an alleged Chinese spy. This has naturally weighed on the company’s share price, prompted a Board investigation, a possible shareholder class action lawsuit, an FBI investigation, and has ultimately placed a bold question mark on its earnings next week.

However, after the close, WSJ reported that the board could oust Huang as soon as today, and the NY Times reported a second alleged relationship with a vice president who reported to him. Huang has not admitted to the second affair, but company directors are meeting remotely, and Nvidia is working with an outside firm to identify potential replacements. CFO Colette Kress is reportedly favoured as interim chief.

Overnight, Asia-Pac trading shows the MSCI Asia Pacific Index down as much as 0.8%, TAIEX down more than 2%, and the KOSPI turning from early gains to a 1.2% loss. Nasdaq 100 futures are also down about 1%, with S&P 500 futures off 0.4%.

UK GDP data ahead

UK September GDP numbers land at 7 am GMT today. As I mentioned in yesterday’s note, this print can provide a scalping opportunity. However, you generally have to be quick as it seldom produces moves beyond 0.20% on GBP/USD. So, as long as the initial reaction is under 0.10%, there is potentially some meat left on the bone, so to speak.

On whether I am looking for a beat or a miss, I lean toward the latter. OIS rate pricing implies around 18 bps of tightening for December’s BoE meeting, so any upside would be limited on a beat – although it backs Lombardelli’s ‘less slack’ comment. Consequently, if the MM print comes in at -0.3% or below (the market's minimum estimate), this would be the lowest since 2023 and likely be enough to trigger short-term downside in the GBP.

However, the caveat here is that we also have a string of additional GDP numbers released at the same time, including QQ and YY figures; ideally, I would also want to see these miss as well to add conviction.