Market snapshot: Nvidia results, FTSE100 reshuffle latest

Before, during and after the latest trading session on Wall Street, NVIDIA Corp (NASDAQ:NVDA) was the only game in town.

Leading into the group’s latest quarterly earnings report, with expectations elevated, markets edged higher with the benchmark S&P 500 closing at a new record high. And for most companies, a breath-taking 56% rise in overall revenues to over $46 billion (£34 billion) would have shot the lights out. However, the shares fell by 3% in extended trading, largely given that it declined to include any outlook guidance on revenues from China, despite the recent lifting of restrictions. 

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With Nvidia accounting for an estimated 8% of the entire S&P 500 by value, futures are currently drifting lower at this early stage ahead of the resumption of trading later. Even so, the resumption of sales to China could leave the share price akin to a coiled spring, even after a stellar run which has seen the price rise by 31% this year alone, and by 1,280% over the last five years.

In the meantime, the main indices continued their upward onslaught, with gains in the year to date of 7%, 10% and 12% for the Dow Jones, S&P 500 and Nasdaq respectively.

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The FTSE 100 brushed off the usual technical Thursday drag of stocks being marked down as a result of their trading without the latest dividend, which included the likes of Aviva (LSE:AV.), Glencore (LSE:GLEN) and Croda International (LSE:CRDA). Elsewhere, a weaker oil price provided some succour to the airlines, with International Consolidated Airlines Group SA (LSE:IAG) and easyJet (LSE:EZJ) rising steadily.

The marginal gains leave the FTSE 100 in good shape and still close to its recent record high, with the index having now risen by 13.3% so far this year, with the weight of foreign investor buying continuing to underpin its strong progress. 

FTSE 100 reshuffle

Somewhat under the radar of most investors, Metlen Energy & Metals (LSE:MTLN) switched its primary listing from Athens to London in early August and is now poised to join the FTSE 100 in the first available reshuffle.

The industrial company, which both produces electricity as well as mining aluminium and bauxite from its main mine in Greece, has seen its share price rise strongly over the last year, leading to a market cap of €6.75 billion (around £5.8 billion) and a share price of €53.70.

The share price denomination is significant; in an effort to increase the attractiveness of London listings amid a well reported exodus over recent times, the Stock Exchange has opened a new door and announced that “non-sterling denominated securities will be eligible for inclusion to the FTSE UK Index Series, from the September index review”.

As things stand currently, Metlen’s likely inclusion in the premier index would come at the expense of Taylor Wimpey (LSE:TW.), whose shares have declined by 38% over the last year amid a flurry of concerns which have blighted the sector.

For the most part and despite recent cuts, interest rates remain higher than expected, while lower consumer confidence and general cost of living pressures are all working against the industry. High build cost inflation, a lengthy and laborious planning permission process and pressure on operating margins given some fixed costs are also providing headwinds.

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Coming up strongly on the rails, although less likely for promotion barring a last-minute rally, is Burberry Group (LSE:BRBY). After a bruising recent past which resulted in the group’s demotion from the FTSE 100 last September, the shares have subsequently spiked by 92% over the last 12 months and by 33% this year alone. The “Burberry Forward” strategy which the group announced in November is clearly beginning to have a positive impact, but the transformation will take time to filter through. The Burberry brand is one which had moved away from its traditional British traits of heritage and innovation, which had such appeal to overseas buyers and particularly tourists with an aspirational and stylish look.

Any such changes will be taken from closing prices on Tuesday 2 September and announced after the end of play on Wednesday 3 September, then becoming effective on Monday 22 September.