As we approach another action-packed week, traders are gearing up for significant economic data releases and earnings reports that could set the tone for the financial markets. Here’s what to watch out for in the coming days.
5 Key Takeaways
Inflation Insights: The April CPI report is crucial. A hotter-than-expected reading could eliminate hopes for rate cuts in 2024.
Earnings Impact: Strong earnings from tech giants have propelled the S&P 500, but weaker reports have seen significant market punishments.
NVIDIA Focus: NVIDIA’s upcoming earnings will be a major market mover, particularly for the tech sector.
Fed Watch: Comments from Fed officials will be critical in gauging the likelihood of future rate cuts.
Global Economic Data: Key data from China, Germany, the Eurozone, and the UK will provide a broader picture of the global economic health.
Packed Economic Calendar
The week will be filled with important economic indicators that could provide insights into the Federal Reserve's future actions regarding interest rate cuts. Key highlights include:
Monday: China's loan primaries and Germany’s Producer Price Index (PPI) data will kick off the week.
Tuesday: The Reserve Bank of Australia’s (RBA) minutes, Eurozone trade balance, Canada’s Consumer Price Index (CPI), and the American Petroleum Institute’s (API) crude oil inventories report.
Midweek: The focus will shift to New Zealand’s central bank interest rate decision, UK’s inflation figures (CPI, PPI, RPI), Japan’s trade balance, machinery orders, and US existing home sales along with EIA crude oil inventories.
Market Reactions to Earnings
The recent strong earnings season has bolstered US stocks, with the S&P 500 index up over 9% year-to-date. The earnings growth rate is expected to be around 7.8%, significantly higher than the April forecast of 5.1%. Notably, technology giants have led the charge with substantial gains, contributing to the overall market optimism.
However, the upcoming inflation report will be crucial. Economists predict a 0.4% increase in the April CPI. A higher-than-expected CPI could negate the possibility of rate cuts this year, impacting market sentiment.
NVIDIA and Retail Earnings
NVIDIA’s earnings report will be the focal point among US corporate earnings. Other notable reports include:
Target
Kingfisher
Marks & Spencer
These reports will provide further clues on the health of the retail sector and consumer spending trends.
Fed Speakers to Watch
Several Federal Reserve officials are scheduled to speak, including:
Minneapolis Fed President Neel Kashkari
Fed Governor Christopher Waller
San Francisco Fed President Mary Daly
Their comments will be closely analyzed for hints on the timing of potential rate cuts.
Conclusion
Investors are bracing for a week filled with critical economic data and Fed commentary that could influence market dynamics. With the Dow having briefly crossed the 40,000 mark, the focus now shifts to whether the upcoming data will support continued bullish momentum or trigger caution. NVIDIA's earnings, in particular, will be closely watched, along with inflation reports and housing data, as traders seek to navigate the market's next moves.
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