Has Nvidia become the new Tesla for markets?

The market influence of chip manufacturer Nvidia (NVDA) has taken over the position previously held by electric vehicle manufacturer Tesla (TSLA), according to Jared Blikre, a reporter for Yahoo Finance Markets. Additionally, Blikre discusses the positive performance observed in the Chinese markets and the strengthening of the Chinese currency, yuan.

BRAD SMITH: Investors are eagerly anticipating Nvidia's earnings announcement tomorrow after the market closes. The company exceeded expectations in its previous report. It remains to be seen if they can replicate that success this time. The stock has seen an impressive increase of over 200% this year. However, the question remains: will there be further growth? Our correspondent, Jared Blikre from Yahoo Finance, is here with us live from the bustling New York Stock Exchange. Hello, Jared.

JARED BLIKRE: Hey, I'm loving the vibrant scene here. Let's discuss Nvidia, is it invading Tesla's territory as one of the leading stocks worldwide? One of the significant indicators of sentiment, Apple already falls within that category, and Nvidia is posing as a strong competitor against Tesla in terms of predictions and wagers. Moreover, we're examining the options market. Traders have already invested a staggering $100 billion in Nvidia, making it the second-most favored after Tesla in this year.

And after that, you examine the developments in both the options market and the primary market. In the latest earnings report, they saw a staggering increase of $184 billion within a single day. Additionally, I received a tweet from Jim Bianco highlighting the growing significance of Nvidia for the S&P 500.

According to what he mentioned earlier, the S&P 500 experienced a 0.7% increase yesterday. Out of this percentage, Nvidia contributed around 34%, equivalent to one third. Tesla, on the other hand, accounted for 19%, or approximately one fifth. The remaining 94% was attributed to the collective performance of the remarkable seven mega-cap companies. Interestingly, the remaining 6% was divided among the other 493 entities. This data strongly suggests that Nvidia outshone the rest, performing exceptionally well in comparison.

Let's take a quick look at the YFi Interactive and analyze the progress so far this year. In the past couple of trading sessions, we've steadily climbed back up to reach the previous peak levels of consolidation. If we receive an exceptionally positive report tomorrow, we can confidently expect to exceed those levels significantly. On the other hand, if the report isn't as impressive, it wouldn't be surprising to witness a retreat towards the 400 mark.

JULIE HYMAN: Well, that's quite fascinating. We are also closely monitoring the performance of Chinese stocks, which are experiencing a revival today. Can you provide us with some insights on this matter and comment on its level of importance?

JARED BLIKRE: To begin with, stocks are recovering slightly. If we navigate to the YFi Interactive, I can display the Hang Seng chart. Within the past week, specifically overnight, we can observe a substantial increase occurring right after the midday break when trading resumed. The cause behind this surge remains mostly unknown.

However, in the past week, there has been a decline of around 7% towards the lower end of the spectrum. I would label this as a rebound from an oversold position. I don't believe this holds much importance for individuals involved in stock trading. Nevertheless, there are several other developments occurring in relation to the Chinese economy. The monetary authorities are taking actions to encourage growth in the property markets and prevent what they perceive as a deflationary downturn.

If we take a look at the Chinese yuan's chart, we can observe a significant decrease in its value. This decline has occurred within the past three months. Presently, we have reached its previous high point. The government has recently established the rate at 7.2%, but it has quickly risen to 7.3%. This difference, as they attempt to strengthen it slightly, is the largest we have seen since Bloomberg began reporting this information in 2018.

The crux of the matter is that the government cannot allow the yuan to constantly decrease in value without any control as it encourages money to flow out of the country. They are unwilling to let go of all the dollars in their currency reserves. Therefore, they are adopting strategies to make it costlier to wager against the yuan, along with other actions. However, these solutions are only temporary and not comprehensive. Will they effectively address the issue? Only time will tell, my friends.

JULIE HYMAN: Absolutely, we definitely will. Many thanks, Jared.