Next week to watch (20-24.05.2024)

17.05.2024 13:52|Analyst Team, Conotoxia Ltd.

Keith Gill, known as 'Roaring Kitty', has returned to social media after almost three years, causing GameStop shares to surge. The company's shares rose 119% on Monday and ended the day up 74%, with other meme stocks such as AMC and BlackBerry rising similarly. Gill's return triggered memories of 2021, when retail investors under his influence boosted GameStop's share price by 2,400%. A key event in the markets over the coming week will be the financial results of Nvidia, which so far remains the biggest beneficiary of the artificial intelligence boom. On Wednesday we will see the CPI inflation reading from the UK and in the evening the contents of the FOMC meeting minutes, the so-called minutes, which will give us a better picture of the future of Fed policy.

Table of contents:

  1. UK consumer price index (CPI) annualised (April)
  2. FOMC meeting minutes
  3. Germany's gross domestic product (GDP) by quarter (Q2)
  4. Stocks to watch

Wednesday, 22.05, 8:00 CET, UK consumer price index (CPI) annualised (April)

UK inflation eased to 3.2% year-on-year in March 2024, reaching its lowest level since September 2021. The main factor was a fall in the rate of food price inflation. Prices in restaurants, hotels, leisure and culture also grew at a slower rate, while housing costs continued their decline.

The current analysts' forecast is for another decline in CPI inflation to 2.7%.

UK inflation graph

Source: Tradingeconomics.com

A higher-than-expected reading could have a bullish impact on the GBP, while a lower-than-expected reading could be bearish for the GBP.

Impact: GBP/USD, EUR/GBP

Wednesday, 22.05, 20:00 CET, FOMC meeting minutes

From the last FOMC meeting, we learned that US financial conditions had softened somewhat despite the rise in government bond yields. Expectations of rate cuts towards the end of the year have diminished. Participants at the meeting agreed that a slowdown in the pace of balance sheet reduction should occur soon to ensure a smooth transition to a level of reserves deemed sufficient. The labour market remains strong, inflation is gradually declining but is still above the 2% target, and all participants agreed that interest rates will remain at 5.25-5.5% until inflation is confidently heading towards 2%.

chart of the Fed balance sheet

Source: Tradingeconomics.com

More hawkish signals from the FOMC meeting minutes could have a bullish impact on the USD, while more dovish signals could be bearish for the USD.

Impact: EUR/USD

Friday, 24.05, 8:00 a.m. CET, Germany's gross domestic product (GDP) by quarter (Q2)

The German economy grew by 0.2% in the first quarter of 2024, preliminary estimates showed. The slight growth was due to an increase in construction investment and exports. On the other hand, private consumer spending fell. Year-on-year, the economy contracted by 0.2%, entering a technical recession for the first time since 2020.

The current analyst forecast is for GDP growth to remain at 0.2%.

GDP graph

Source: Tradingeconomics.com

A higher-than-expected reading could have a bullish impact on the EUR, while a lower-than-expected reading could be bearish for the EUR.

Impact: EUR/USD, DE40

Stocks to watch

  • NVIDIA (NVDA)

Nvidia will announce next quarter's financial results after the market closes on Wednesday. Analysts are predicting a significant increase in revenue and net profit for the AI industry frontrunner compared to a year ago, driven by demand for artificial intelligence. Revenue is expected to reach $24.65 billion and net profit $12.87 billion. Revenue from the data centre segment, a key business area for AI solutions, could reach a new record of $21.17 billion. Nvidia may also provide updates on the new Blackwell platform unveiled in March. 

Nvidia shares have risen more than 90% since the start of the year. The average price forecast by analysts is US$1027, 8.8% above current levels.

 

Grzegorz Dróżdż, CAI MPW, Market Analyst of Conotoxia Ltd. (Conotoxia investment service)

The above trade publication does not constitute an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No. 596/2014 of April 16, 2014. It has been prepared for informational purposes and should not form the basis for investment decisions. Neither the author of the publication nor Conotoxia Ltd. shall be liable for investment decisions made on the basis of the information contained herein. Copying or reproducing this publication without written permission from Conotoxia Ltd. is prohibited. Past performance is not a reliable indicator of future results.

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71.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.48% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.