Key week for markets: investors await results from Nvidia, words from the Fed and G7 conference

Last week was quite volatile: the Producer Price Index (PPI) was higher than expected and the United States Consumer Price Index (CPI) was slightly below monthly expectations. This small cut in the inflation rate was enough for some spokespersons of the Federal Reserve (Fed) will start talking about some rate cuts the next day.

Although there are some earnings reports of some of the most important companies on Wall Street This week, all eyes will probably be on Nvidiaas artificial intelligence technology seems to be the driving force in the market lately.

This week there is also data from the FOMC, expected speeches from several Fed speakers, the G7 conference and some other sentiment data.

This week the gains can be divided into two quite different sectors: Technology and Consumption. On the consumer front, we have Lowe’s (LOW) and Target (TGT) on Tuesday, Wednesday and Thursday, respectively. These are unlikely to generate much volatility in the overall market, but they could provide key insights into consumers’ spending patterns and habitsas the economy continues to show a discrepancy between market and US government data and what consumers actually report.

On the technology side, names like Zoom (ZM), Palo Alto Networks (PANW), PDD Holdings Inc (PDD) and Nvidia (NVDA) appear, presenting their results this week. Wednesday is the most important day with Nvidia, and the latest reports have been positive for both the stock and the market in general. The question is, what does the market need to see in this earnings report to keep the momentum going, and can Nvidia achieve it?

Words from the Fed

Throughout the week, there will be several Fed speakers (sometimes two or three per day). This has a lot of potential for volatility because they will probably talk about rate cuts and improvements in financial conditions after the last CPI report. This could be taken very positively by the markets and could push them up with the speeches or completely the opposite.

PMI

The US Purchasing Managers’ Index (PMI) will be released on Thursday morning. Both have been hovering around the 50 level for the past few months, showing signs of neither expansion nor contraction in these sectors. If these remain status quo and continue to show no real moves, the market may be buying into more of the same. Any significant deviation would cause some volatility under the assumption that any news could impact rates.

The PMI (Purchasing Managers’ Index) is an economic indicator that reflects the economic conditions of the manufacturing sector and the service sector in the United States. It is prepared by the Institute for Supply Management (ISM) and also by the financial analysis company IHS Markit (now part of S&P Global).

G7

The last part of the week is the G7 conference, where central bankers from most developed nations meet to talk economic policy. This is closed to the press, but there are often impromptu interviews between meetings. With persistent inflation, multiple conflicts around the world and several currencies on the move, the G7 policies this year could be a decisive factor in the market.

FOMC Meeting Minutes

Minutes from the FOMC meeting on last week’s rate decision are released on Wednesday. These minutes often cause some volatility upon release as traders and computers try to decipher what the Fed is thinking and which direction it might lean for future meetings. Given that inflation appears to be slowing, it is possible that any indication of a rate cut will be the focus and we will see a rebound upon release.