Morning Brew May 22 2024

Good morning,

Nvidia earnings and the Fed Minutes will be the focus of attention, that means we have the potential for a nervous day.

The Nvidia earnings after the bell today are key, option traders price in a swing of almost 9% or the equivalent of USD 200 billion of market capitalization. The stock now has a weighting of over 5% in the S&P 500, 6.5% of the Nasdaq 100 and 20% of the VanEck Semiconductor ETF. The release is the focus of our market podcast HERE. Besides the earnings, a hint of a stock split will also be watched for.

Yesterday was a fairly quiet day already with Indexes moving higher by a small margin, The US 30 keeps the 40k in sight at 39875, the US500 5322, and GER40 and the US tech 100 NAS are both at 18730. Biggest major outliers yesterday were Tesla up 6.6% and Macy`s up 5.1%

Yields are little changed at 4.42 for the 10-year and the USD Index 104.65. EURUSD is 1.0853, GBPUSD 1.2708 and USDJPY 156.36. Gold and Silver are taking a break at 2413 and 31.70. Silver needs to break the 32.50 for more upside potential according to Ole Hansen. Bitcoin recedes below the 70k but Ethereum is up 27% on the week at 3755.

Today I expect a bit of choppy trading, as the  elephant in the room is clearly Nvidia, the Fed Minutes will only have a meaningful impact, if there is a major surprise, which is doubtful. The large issue is that inflation remains too high for the Fed to lower rates with a good conscience. We need either lower inflation or stress in the labor market, that will not show until earliest next week when the PCE is released, or the Nonfarm Payroll early June.

Trade safely.

Wednesday
- Data Japan Trade Data, UK CPI, Fed Minutes,  Bostic & Golsbee speak
- Earnings: NVIDIA, Snowflake, Target Corp,

Thursday
- Data International PMI, Turkey Rate Decision US Initial Jobless Claims, EU Consumer
- Earnings: Meituan, Xiaomi Workday
Friday
- Data Japan CPI, DE GDP, UK Retail Sales, US Durable Goods & Michigan Sentiment, Canada Retail Sales
- Earnings: Dollar Tree Inc