This week's key agenda: NVIDIA earnings report, China's LPR, speeches by the central bank governors of Japan and Europe

From November 18 to November 24, a summary of major financial events, all in Beijing time:

This week’s focus: China’s November Loan Prime Rate (LPR) release; NVIDIA Q3 earnings report; speech by Bank of Japan Governor Kazuo Ueda; and Eurozone October CPI.

In addition, the U.S. will announce November PMI, European Central Bank President Christine Lagarde will give a speech, and S&P Global will release October PMI for France, Germany, and Europe.

China’s November LPR Release!

On the 20th (Wednesday), the People's Bank of China will announce the one-year and five-year Loan Prime Rates (LPR) for November.

On the 21st of last month, the People's Bank of China authorized the National Interbank Funding Center to announce that the one-year and five-year LPR rates were both lowered by 25 basis points, with the one-year LPR at 3.10% and the five-year LPR at 3.60%. This single decrease is the largest since the LPR reform in 2019 and exceeds market expectations, demonstrating the strength and determination of monetary policy to support the economy.

Zhou Maohua, a macro researcher at Everbright Bank's Financial Market Department, believes that given the current domestic price environment, there is still ample space for conventional policy tools. Considering the need to encourage financial institutions to increase support for the real economy, implement incremental fiscal policies, and account for seasonal disturbances before the end of the year, there may be some fluctuations in the funding environment. To facilitate cross-cycle adjustments, the central bank may not rule out another reduction in the reserve requirement ratio. Additionally, there is still room for interest rate tools, which need to be adjusted based on the recovery of the real economy and prices, while also balancing internal and external factors.

Countdown to Blackwell Shipment! NVIDIA to Release Q3 Earnings Report

NVIDIA, dubbed by Goldman Sachs as "the most important stock on Earth," will announce its Q3 earnings report for fiscal year 2025 after the market closes on November 20 (5:20 AM Beijing time on Thursday).

Market expectations for NVIDIA's Q3 are:

Revenue of $33.08 billion, a year-on-year increase of 83%

Adjusted net profit of $18.46 billion, a year-on-year increase of 84%

Earnings per share of $0.72, a year-on-year increase of 94%

Looking back at NVIDIA's performance over the past eight fiscal quarters, there have been seven instances where earnings per share exceeded market expectations, with an average stock price change of ±9.32% on earnings report days, a maximum increase of +24.4%, and a maximum decrease of -6.39%; the probability of stock price increase on earnings report days is 62.5%.

Since the announcement of the Q2 earnings report, NVIDIA's stock price has risen another 15%, reaching a new historical high, with a latest total market capitalization exceeding $3.66 trillion, surpassing Apple and Microsoft, becoming the first company in history with a market value exceeding $3.6 trillion.

In addition to the revenue and profit growth data that analysts are most concerned about, the market is also focused on two key pieces of information:

1. Blackwell shipments in Q4, and what is the sales guidance for 2025? As NVIDIA's new generation AI chip, Jensen Huang previously stated that shipments will begin in the fourth quarter. Wall Street analysts generally believe that the development of AI applications is still in the early stages, and the Blackwell cycle will continue to drive NVIDIA's performance upward. Morgan Stanley previously revealed that Blackwell's supply for the next year is sold out, and the new product line is expected to boost the company's revenue in January's quarter.

In addition, the capital expenditure plans of tech giants like Microsoft, Amazon, and Meta are "very robust." Melius predicts that these companies' data center capital expenditures will grow by 24% by 2025, reaching $282 billion, providing support for Blackwell sales.

2. How is the progress of the $50 billion new repurchase plan?

On the other hand, as the company's performance growth slows, the previously approved $50 billion repurchase plan in the second quarter is in focus. NVIDIA's current price-to-earnings (P/E) ratio and price-to-free cash flow (P/FCF) ratio are below the average levels of the past two years. If Blackwell can indeed drive the company's stock price to further explode, management should start expanding the stock repurchase scale in Q3.

In summary, if NVIDIA fails to significantly advance the company's new $50 billion repurchase plan, or if Blackwell's sales guidance falls short of expectations, this will be a negative signal.

Will the Bank of Japan Governor Signal a Rate Hike in December?

On Monday, the 18th, Bank of Japan Governor Kazuo Ueda will hold a press conference. The market is closely watching his remarks for clues about further rate hikes by the Bank of Japan.

This will be Ueda's first direct discussion of monetary policy since Trump won the U.S. presidential election.

Currently, there is still a divergence in the market regarding whether the Bank of Japan will raise rates next month or in January next year.

Some analysts believe that given the unexpected rate hike in July triggered a market shock in August, Ueda may adopt more cautious wording this time. If the Bank of Japan wants to lay the groundwork for the policy meeting on December 18-19, Ueda may release some hawkish signals.

According to a recent Reuters survey, most economists expect the Bank of Japan will not raise rates again this year, but nearly 90% of economists expect rates to rise by the end of March next year.

It is worth noting that the recent depreciation of the yen has further increased the pressure on the Bank of Japan to raise rates as soon as possible.

Major Events in the Eurozone! Is a Rate Cut in December Likely?

On the 19th at 18:00, the year-on-year core CPI for October in the EU and the year-on-year CPI for October in the Eurozone will be released;

Starting from 16:15 on the 22nd, S&P Global will release the November PMI for France, Germany, and the Eurozone;

European Central Bank President Christine Lagarde will speak on the 19th.

After the third rate cut of the year last month, European Central Bank officials have begun discussing a more accommodative policy outlook, with a 50 basis point aggressive rate cut being put on the table. Some senior officials of the European Central Bank have also changed their stance, stating that a 50 basis point rate cut in December cannot be ruled out. If inflation data supports it, they hope to see rates drop to neutral levels more quickly Currently, the market generally expects the European Central Bank to cut interest rates again in December.

Other Important Data, Meetings, and Events

The window for adjusting refined oil prices opens

On November 20th, the domestic refined oil price will enter a new round of adjustment window. So far in 2024, there have been 22 rounds of adjustments in domestic refined oil prices, showing a pattern of "nine increases, nine decreases, and four pauses," with gasoline and diesel down by a cumulative 130 yuan and 125 yuan per ton respectively compared to the end of last year. According to Longzhong Information, this week, the fluctuation of crude oil costs has significantly intensified, and the adjustment of domestic refined oil price limits has temporarily entered a pause range.

Multiple economies release important economic data

On November 20th, the month-on-month core CPI for the UK in October will be released; on November 22nd, the month-on-month CPI for Japan in October will be released, along with the final value of Germany's third-quarter GDP (not seasonally adjusted) and India's manufacturing PMI final value for November.

The G20 Summit will be held in Brazil

From November 18th to 19th, the 19th G20 Leaders' Summit will be held in Rio de Janeiro, Brazil, with the theme "Building a Fair World and a Sustainable Planet," discussing issues such as global inequality, sustainable development, and global governance reform.

New Share Opportunities

In the week (November 18th - 22nd), there are 3 new stocks available for subscription in the A-share market, and 1 new stock will be listed.

A total of 29 new funds (combined statistics for Class A and Class C) were issued during the week, including 8 bond funds, 10 mixed funds, 0 stock funds, 5 index funds, and 2 FOFs.

Appendix: See the operation video for the subscription function of Jiwenli