Nvidia (NVDA) came in with a beat again and the market rallied as a result only to start to liquidate the next day on more data. Add in FOMC meeting minutes and there was a lot of event risk in the back half of last week. Even with all of this movement though the SPY still managed to close barely green on the week.
Next week we have some additional earnings, a US bank holiday, consumer confidence, and inflation data.
Here are 5 things to watch this week in the Market.
Earnings
Earnings will continue to be a theme for the next few weeks, with the largest name to watch this week being Costco (COST). This is a great proxy for retail appetite as they are one of the largest retailers in the country. Outside of Costco, there is Salesforce (CRM) and they are a popular trading stock. In both cases, looking back at the numbers towards the guidance should give a better indication of moves the next day. A lot of names this cycle have been selling off on earnings beats because of poor guidance.
Bank Holiday
On Monday banks and most markets will be closed in observance of Memorial Day in the US. Futures will have a half-day. This could throw volumes off on Tuesday as banks and brokers need to adjust their books.
Consumer Confidence
Tuesday has Consumer Confidence at 10 am Eastern. With inflation back in the news cycle in a heavy manner, consumer data has had a lot of market-moving potential in the last several weeks. I would expect this to be no different. If consumer confidence comes in as expected or lower we could see the market rally on hopes that rate cuts will in fact be this year. If we come in higher than expected we could see a sell-off as the market realizes that a weak economy and higher inflation could force cuts to be postponed.
Pending Home Sales
Housing data really helped to move the market last week with a miss in new home sales, and its possible that the same thing will happen this week. Pending home sales are due out Thursday and a 0.6% contraction is expected. If we miss the expectation we could see some additional selling in a repeat of last week's action. If we come in higher than expected we could see the market rally on better-than-expected news.
Core PCE
Finally, on Friday, the Fed’s official measurement tool for inflation is due out, core PCE. Given all of the news surrounding inflation lately, this has the potential to move the market and set the tone for the day and potentially the next few weeks until the next FOMC meeting. If PCE comes in hotter than expected we could be in for a wild ride proving inflation is not yet tamed. If we come it at expectation or cooler then we could see the market really rally potentially into next week on potential for positive rate news.
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.