On the Western Front... 

It’s going to be quiet today. The U.S. is off for another holiday. Not such a quiet week – Nvidia earnings, some PMI releases and FOMC meeting minutes are on tap to provide something of a steer for markets.  

The FTSE 100 was flat in early trading, whilst the CAC and DAX both fell a wee bit off their recent record highs. Defence will get a lot of coverage this week with Nato and Trump in the headlines. Investors are not really fretting over November yet. 

Nvidia Still a Buy? 

Here is Loop on Nvidia, which has initiated a ‘buy’ with a street-high $1,200 price target: 

 "Initiating Buy and $1200 PT (63% appreciation) as we believe not only is there material upside to Street estimates in CY2024/FY2025 & CY2025/FY2026 but that we are at the front end of a 3 - 5-year GPU compute & Gen AI foundational build across Hyperscale.  

While we acknowledge additional silicon providers (private as well as AMD & INTC) and Hyperscale specific internal silicon solutions will be coming online over the next few years, our work suggests NVDA's largest customers will be taking everything NVDA can give them in 2024 and 2025.  

Our $1200 PT is 30x our $40.00 CY2025 EPS, NVDA's median P/E."  

As the company is the poster child of the AI boom, the Nvidia earnings report will be closely watched on Wednesday.  

British Bank Earnings 

This side of the pond, it’s a busy week for bank earnings reports, looking at a bad (worse) version of a Craig David song. Barclays to kick things off on Tuesday, HSBC on Wednesday, Lloyds Bank earnings on Thursday, and Standard Chartered on Friday.  

NatWest offered promise – shares rallied 7% on Friday after it reported its best profit since 2007! Remember what happened next? All eyes are on Barclays CEO CS Venkatakrishnan and his strategy update – the first since 2016 and one that comes after a pretty torrid time for the shares.  

UK Banks Struggling 

There is a question about UK bank valuations generally, as expressed by Bank of England governor Andrew Bailey last week: “Why are the valuations of banks so much in the doldrums?”  

But Barclays trades at a particularly large discount to book value.  

Expect lots of cost-cutting, but it seems unlikely Venkat will retreat from the investment banking business per se.  Expect efforts to boost ROTE by slashing costs, culling certain unprofitable clients, boosting ‘wealth management’ and a clear outline on shareholder returns.  

Other Key Movements for the UK 

It’s easy to be down on the FTSE 100. But it’s having a better time of things, rallying 1.5% on Friday to end the week solidly. This morning, it’s facing a subdued start to trade, ticking down a touch but holding the 7,700 handles after rejecting the move under the 200-day SMA last week to deliver three white soldiers. 

 Sterling also bounced off its 200-day SMA, though remains vulnerable below the 21-day EMA. 

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