There was some wild volatility last week as PPI came in hotter than expected and CPI came in just under expectations on the monthly basis. This small decrease in the inflation rate was enough for Fed heads to start talking about rate cuts again the next day.
There are a few big-name earnings releases this week, but all eyes will more than likely be on Nvidia (NVDA), as AI technology seems to be the driving force behind the market lately.
On the news front, we have some FOMC data, a ton of Fed speakers, the G7 conference, and finally sentiment data.
Here are 5 things to watch this week in the Market.
Earnings
Earnings this week can be cut into two pretty distinct sectors, Tech and Consumer. On the consumer front, there are Lowe's (LOW) and Target (TGT) on Tuesday, Wednesday, and Thursday respectively. These are unlikely to cause any volatility in the overall market but could provide some key insights into consumer patterns and spending habits as the economy continues to appear to bifurcate between the market/government data and what consumers are actually reporting.
The other side of that line is Tech with names like Zoom (ZM), Palo Alto Networks (PANW), PDD Holdings Inc (PDD), and Nvidia (NVDA) out this week. Wednesday is the big day with Nvidia out and the last few reports have been great for both the stock and the overall market. The question is what does the market need to see this earnings report to keep the ride rolling, and can Nvidia produce it?
Fed Speakers
Littered throughout the week there are several Fed speakers (sometimes two or three per day). This has a lot of volatility potential as they will likely be talking about rate cuts and financial condition improvements after this last CPI report. This has the potential to be taken very positively by the markets and could send us higher on the speeches.
PMI’s
Both the Flash Services and Manufacturing PMI are out Thursday morning. Both of these have been lingering around the 50 level for the past several months showing no real signs of expansion or contraction in these sectors. If this releases at the status quo again and continues to show no real movement it's possible we see the market get bought up on more of the same. Any large deviations would cause some volatility on the assumption that any news could impact rates.
G7
The back portion of the week is the G7 conference where most of the developed nations' central bankers get together to talk policy. This is closed to the press, but there are often impromptu interviews between meetings. With sticky inflation, multiple conflicts around the globe, and several currencies on the move, the G7 policies this year could be a market mover.
FOMC meeting Minutes
Wednesday the FOMC meeting minutes are due out for the rate decision last week. These minutes often cause some volatility upon release as traders and computers attempt to figure out what the Fed is thinking and what direction they could be leaning for future meetings. Given that inflation looks to be slowing, its possible any indication of a rate cut is what is fixated on and we see a rally from the release.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
