Nvidia Earnings, A Winter Warning, and China’s Government Hack 8/26/26

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You're listening to The Exchange.

**Aaron Levy** (0:46)
Here's today's show.

**Brian** (0:51)
Welcome to The Exchange, everybody. I'm Brian. And for Kelly Evans once again, thanks for joining us and happy Nvidia Earnings Day. Stocks holding steady right now as the world waits for those results in just over three hours. A 10-year bond yield hovering right around 4.65 percent. Oil briefly falling back below 80 bucks on real hopes for lasting peace. But yeah, we've been here before. So we'll ask Helima Croft where she thinks things are going. Oil popping back up a little bit right now. Inside of stocks, some big tech a little bit lower. Nvidia forementioned Nvidia, along with Intel, Broadcom and more, down about 1 percent. The market really getting primed and pumped for those numbers. But you also don't have to wait for the latest inflation read because that already came in, and it came in just a touch hotter than expected for July. But is that enough to change Kevin Warsh's calculus with his big Jackson Hole policy speech? Just about 48 hours away. There are a lot of questions to kick it off, and we've got a great guest for you at his venue, Krishna, he is head of US Equity Strategy and Global Equity Link Strategies at Barclays Venue. Great to have you on set. Thanks for joining us.

**Krishna Venu** (1:58)
Thank you.

**Brian** (1:59)
All right, we got rates, we got wars, but I got to start with Nvidia. The number's out tonight. I know you're not a single stock analyst, but how important are the numbers and the guidance for the macro market?

**Krishna Venu** (2:10)
Very important because the single biggest driver equity markets right now has been the AI narrative, and Nvidia is in the center of that, and if you look at, for example, the options market till last week, the market is actually giving more importance to Nvidia earnings than even Jackson Hall event.

**Brian** (2:31)
So fair to say then, I don't want to put words in your mouth, you can put the words in your own mouth, but Nvidia does have the ability to move this market either way.

**Krishna Venu** (2:39)
Absolutely. Absolutely.

**Brian** (2:41)
So if the numbers come in good, more importantly, if the guidance comes in good, the numbers are going to be the numbers, everyone expects them to be good, it's the guidance. Does that give the market another leg up? What would it take for the market to take a hit?

**Krishna Venu** (2:58)
The AI narrative shifting downwards, and there are a number of different reasons or catalysts it can take. For example, power has been a big constraint, anything negative on that.
What if models start plateauing, which hasn't happened yet. Funding now is a big issue because now we expect the hyperscalers to be spending more than 90% of their operating cash flows in CAPEX, which means they will need funding.
But so far it's not been an issue, but the credit markets are having some indigestion with the scale of issuance. And then of course, don't forget the regulatory and social pushback on data center growth, for example. So I think a lot of things can go wrong, but if you take a step back, I think what is important and the reason we continue to be bullish is that the company's spending are posting excellent earnings. And what we have seen for them is their returns have taken a bit of a breather compared to the last three years. Their earnings are well over 30 percent, but their multiples have come down three to four handles. And we love that combination because these companies have the capacity and the ability to spend. And when they spend trillions of dollars, those trillions are effective revenues for a host of other sectors.

**Brian** (4:08)
Fair enough, we have the head of the actual Central Bank, Kevin Warsh, Chairman of the Fed, speaking on Friday.
There was an article the other day that called Nvidia the central bank for AI, for technology. If you had to scale it, is one more important than the other, Nvidia or Kevin Warsh? Who you got?