Since the bull market begun, and even in the bear market, crypto and TradFi markets have become correlated. This week Nvidia Earnings, UK inflation and retail sales figures, economic indicators from Japan (BOJ) US Services PMIs, the FOMC Meeting Minutes, and Fed commentary will set the tone for trade.
As markets saw signs that inflation was going down, they became more positive about the possibility of interest rate cuts from the Federal Reserve. As a result, stocks went up, and on Wednesday, all three major averages hit new highs.
Crypto and conventional markets are on high alert this coming week for loss and big changes. The US Services PMIs, the FOMC Meeting Minutes, and Fed remarks will also affect investors’ bets on a September Fed rate cut.
The Crypto Market Defining Factors the Third Week of May
US economy data will affect all global markets. On Wednesday, May 22, the US housing sector data will be released, undoubtedly capturing the attention of investors as they analyze the state of the US economy.
With the housing sector showing signs of improvement, there is potential for a positive impact on consumer confidence and a subsequent increase in spending.
Investors will want to pay close attention to the US jobless claims and preliminary private sector PMI numbers on Thursday, May 23. The Services PMI could potentially have a greater impact on the US dollar.
The release of German producer price numbers for April on Monday, May 20, will influence buyer demand for the EUR/USD currency pair. Indications of declining producer prices may suggest a more subdued demand climate, potentially bolstering the case for an interest rate reduction by the ECB in June.
The release of the trade data on Tuesday, May 21, is critical for the Eurozone markets. Experts anticipate a positive trajectory for the Eurozone economy in the second half of 2024, and positive trade data may contribute to a more positive outlook.
Also Read: Nvidia’s Stock Nears Record High as Earnings Approach
What You Need to Know Ahead of Nvidia’s Earnings Report
The Nasdaq Composite (IXIC) increased by over 2% on a weekly basis, whereas the S&P 500 (GSPC) surged by over 1.5%. On Friday, the Dow Jones Industrial Average (DJI) surpassed 40,000 for the first time ever, an increase of over 1%.
Nvidia’s (NVDA) eagerly awaited earnings results are anticipated to be the primary catalyst for markets in the coming week. Investors shall also attentively monitor the performance of Lowe’s (LOW), Palo Alto Networks (PANW), and Target (TGT).
With the final reading of consumer sentiment for May and updates on activity in the manufacturing and services sectors, the economic outlook for the week is anticipated to be more subdued.
After the closing bell on Wednesday, Nvidia is scheduled to report its earnings, completing the American tech titan’s reports. Once more, expectations are extremely high for the semiconductor manufacturer.
According to Bloomberg consensus data, analysts anticipate Nvidia’s prior-quarter earnings to have increased by over 400%, while revenue will have surged 242%.
For the second quarter, analysts anticipate revenue growth of approximately 100% and earnings expansion of over 120%.
Markets and Their Expected Influence
Crypto and TradFi investors will want to pay attention to the preliminary private sector PMI numbers for May, which will be released on Thursday, May 23. Investors should carefully analyze the various sub-components, such as prices, new orders, and employment, to make informed decisions this week.
With the recent decline in input prices and a slower service sector activity, investors may consider the possibility of post-June rate cuts by the ECB.
Nvidia’s readings are set to affect AI tokens. AI tokens are cryptocurrencies that support AI-based projects, applications, and services. These include decentralized AI marketplaces, AI-powered trading algorithms, and AI-driven decentralized autonomous organizations.
Also Read: AI Has a Higher Energy Appetite, and This Demands New Sustainability Solutions
These tokens can be used for transactions on the AI platform or to grant governance rights to holders. AI tokens have entered the green trading zone, as seen below.
Cryptopolitan Reporting By Florence Muchai
