As the bull market continues and the bear market shows some correlation, both the crypto and traditional financial (TradFi) markets are closely intertwined. This week, several key events and data releases will set the tone for trading, including Nvidia’s earnings, UK inflation and retail sales figures, economic indicators from Japan’s BOJ, US Services PMIs, the FOMC Meeting Minutes, and Federal Reserve commentary.
The recent signs of decreasing inflation have made investors more optimistic about the possibility of interest rate cuts from the Federal Reserve. This led to a rise in stock prices, and on Wednesday, all three major stock indices reached new highs.
In the upcoming week, both the crypto and traditional markets are on high alert for potential losses and significant changes. The US Services PMIs, FOMC Meeting Minutes, and Fed remarks will also impact investors’ bets on a potential Fed rate cut in September.
The third week of May will be defined by several factors in the crypto market. Data on the US housing sector will be released on May 22, capturing the attention of investors as they assess the state of the US economy. Positive indicators in the housing sector could boost consumer confidence and lead to increased spending.
Investors should also closely monitor US jobless claims and preliminary private sector PMI numbers on May 23. The Services PMI could have a significant impact on the value of the US dollar.
The release of German producer price numbers for April on May 20 will influence buyer demand for the EUR/USD currency pair. A decline in producer prices may indicate weaker demand and potentially support the case for an interest rate reduction by the European Central Bank (ECB) in June.
Trade data released on May 21 will be crucial for Eurozone markets. Experts predict a positive outlook for the Eurozone economy in the second half of 2024, and positive trade data could contribute to this optimistic view.
In terms of stock market performance, the Nasdaq Composite increased by over 2% on a weekly basis, while the S&P 500 surged by over 1.5%. On Friday, the Dow Jones Industrial Average surpassed 40,000 for the first time, marking an increase of over 1%.
Nvidia’s eagerly awaited earnings results will be the primary catalyst for the markets in the coming week. Investors will also closely monitor the performance of Lowe’s, Palo Alto Networks, and Target.
The economic outlook for the week is expected to be more subdued, with the final reading of consumer sentiment for May and updates on manufacturing and services sectors. After the closing bell on Wednesday, Nvidia is scheduled to report its earnings, and high expectations surround the semiconductor manufacturer. Analysts anticipate significant growth in earnings and revenue for Nvidia.
Crypto and TradFi investors should pay attention to the preliminary private sector PMI numbers for May, which will be released on May 23. Analyzing sub-components such as prices, new orders, and employment will be crucial for making informed decisions.
The recent decline in input prices and slower service sector activity may lead investors to consider the possibility of rate cuts by the ECB after June.
Nvidia’s readings will also impact AI tokens, which are cryptocurrencies that support AI-based projects, applications, and services. These tokens have entered the green trading zone, indicating positive momentum.
Overall, this week will be marked by significant events and data releases that will shape the direction of both the crypto and traditional financial markets. Investors should closely monitor these developments to make informed decisions.
