Weekly Macro Matters
Macro Matters – Weekly review, w/c May 27
Global and US stock averages hit record highs, driven by tech gains and strong market breadth. Nvidia’s remarkable earnings bolstered investor confidence, while Fed Minutes signaled a hawkish bias. Key inflation data from the eurozone and the US will dominate market focus as May concludes.
Macroeconomic/Geopolitical Developments
Record highs for US and global stock averages
Nvidia’s surge following earnings report
Fed Minutes reveal hawkish bias; bond yields climb
US Memorial Day and UK holiday on May 27, markets closed
EU CPI and US PCE are key focal points as May ends
Global and US stock averages reached new records, buoyed by technology stocks and improving market breadth. The S&P 500 technology index led gains, with Nvidia climbing 2.49%. The MSCI All-Country World Index also hit record highs, reflecting strong global market participation. Sectors globally have performed robustly, with most at or near record highs.
Nvidia’s stock skyrocketed after reporting exceptional revenue and earnings growth, driven by demand for AI chips. Its market cap surged by $338 billion in a week, bolstered by strong investor confidence in AI-related growth. With a dominant position in AI chips and significant innovations like Blackwell AI chips, Nvidia continues to outperform.
The May FOMC meeting minutes highlighted a hawkish Fed stance, indicating potential for more rate hikes if inflation persists. This led to higher bond yields, reflecting concerns about prolonged high rates. Analysts flagged three key takeaways: doubts about policy restrictiveness, inflation persistence, and readiness for further tightening.
Markets will be closed in observance of US Memorial Day and the UK Bank Holiday. US futures markets will operate partially; full details can be found here.
Critical inflation data from the eurozone and the US will be released on May 31. US PCE is expected to rise, potentially complicating the Fed’s plans to cut rates. Eurozone CPI could influence the ECB’s upcoming decisions, impacting markets and the euro’s value.
What’s Ahead
Central Bank Watch: Limited activity; focus on Fed speakers ahead of the communication blackout period starting June 1.
Macro Data Watch: Key releases include German CPI on Wednesday, followed by EU CPI and US PCE on Friday.
Major Macro Data Schedule:
• May 27, 2024: US Memorial Day holiday, UK Spring Bank Holiday; German IFO report
• May 28, 2024: US Consumer Confidence report
• May 29, 2024: Australian CPI; German CPI
• May 30, 2024: EU Consumer Confidence and Unemployment Rate; US GDP, Core Personal Consumption Expenditures (PCE) (QoQ)
• May 31, 2024: Chinese Manufacturing and Non-Manufacturing PMI; German Retail Sales; EU CPI; Canadian GDP; US PCE (MoM, YoY)
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