Stock Market - The Week Ahead

Fed Minutes

The Fed is scheduled to release the minutes of its meeting on April 30-May 1 on Wednesday. During that meeting, Fed Chair Jerome Powell said that rates will probably stay higher for a longer period of time owing to persistent inflationary pressures.

Since then, data released this week revealed that U.S. consumer prices grew less than anticipated in April, pointing to the beginning of the second quarter as the point at which inflation started to decline again.

Reports on both new and existing house sales, orders for durable goods, and consumer sentiment also appear in the economic calendar.

Nvidia

The tone that Nvidia's quarterly earnings on Wednesday set for the American stock markets might have a ripple effect on businesses that are involved in the rapidly developing field of artificial intelligence.

For its fiscal first quarter, the firm at the core of the frenzy around AI's business potential is predicted to record a significant increase in revenue and earnings.

According to LSEG statistics published by Reuters, revenue is predicted to increase to $24.8 billion from $7.2 billion a year earlier, with earnings per share surging to $5.57 from $1.09.

Nvidia could have to exceed those high standards even more in order to maintain the upward trend in its stock price. After more than doubling in 2023, shares have surged over 90% this year, positioning the AI darling as the third-largest U.S. firm by market value.

UK CPI

Economists predict that the annual rate of inflation will have dropped significantly—by more than a percentage point—to be close to the 2% mark that the Bank of England has set for itself when the United Kingdom releases its April CPI statistics on Wednesday.

Prior to the next meeting of the Bank of England on June 20, there is one more inflation report that has to be released. If price pressures continue to drop, this might provide policymakers with all the justification they need to lower interest rates.

On Tuesday, BoE Governor Andrew Baily is scheduled to make a statement prior to the inflation figures.

Global PMIs

May PMI data from the US, China, the UK, and the eurozone should support a more optimistic picture for the world economy.

After six consecutive quarters of negative or sluggish GDP, a gradual recovery looks to be underway in the euro area. U.S. inflation has recently started to decline again, and China's first-quarter growth exceeded expectations.

Therefore, the worldwide PMIs ought to remain situated on the growth side of the contraction side of the equation.

However, sharp rises in U.S. tariffs on Chinese imports of everything from computer chips to batteries for electric vehicles signal a precarious future for international commerce and expansion. China has promised to pay back.

(Sources: investing.com, reuters.com)