Summary
- The market is focused on Nvidia’s earnings report and its two-month share-price surge, which pushed its market capitalization back above $5 trillion.
- Investor interest is rising in Target’s and Walmart’s earnings reports as a gauge of the US K-shaped economy and broader economic conditions.
- The Shanghai Composite is in a consolidation phase as profit-taking follows its recent surge, but the market’s downside remains firm amid upgraded earnings growth forecasts for Chinese companies and a recovery in the real economy.
Forecast Trend Report by Period
Walmart, Target earnings due this week
Results may shed light on America’s K-shaped economy
Shanghai stocks may take cues from US-Iran ceasefire talks
Investors in New York will focus on earnings from Nvidia and major US retailers, as well as developments in US-Iran ceasefire talks, during the week of May 18-22.
Nvidia shares have surged for two straight months, lifting the company’s market value back above $5 trillion. Based on the record high reached last week, its market capitalization was nearing $5.7 trillion. Nvidia is scheduled to report earnings on May 20.
Investors will also watch results from Target on May 20 and Walmart on May 21 for clues on the real economy. The reports could offer a snapshot of economic conditions as the divide between higher- and lower-income households in the US makes the country’s K-shaped economy a more prominent social issue.
With Kevin Warsh’s nomination as the new Federal Reserve chair approved by the US Senate, several Fed officials are also due to speak. Fed Governor Christopher Waller is scheduled to speak on May 19, followed by Philadelphia Fed President Anna Paulson and Fed Governor Michael Barr on May 20. Oil prices have surged, adding to upside inflation pressure. Their comments on inflation may provide clues to the next Federal Open Market Committee decision.
The Shanghai Composite Index, which had been rallying recently, has entered a consolidation phase as investors take profits after the sharp run-up. Still, global investment banks including UBS have raised their forecasts for Chinese corporate earnings growth this year, and the recovery in the real economy has helped underpin the market.
Investors are also watching whether key data due on May 18, including the home price index, industrial production and retail sales, will further lift sentiment toward China. Progress in Middle East ceasefire talks under mediation by the two countries could ease the risk of a closure of the Strait of Hormuz. That would reduce cost pressures for manufacturers and energy companies and could help drive a medium- to long-term rally in the stock market.
Park Shin-young, New York correspondent, Hankyung.com, nyusos@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
