The Week That Was, The Week Ahead: Macro & Markets, February 25, 2023
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The Week That Was, The Week Ahead: Macro & Markets, February 25, 2023

Story Highlights

Stock markets surged last week, with three out of four main benchmarks reaching all-time highs. The rally was propelled by Nvidia’s blockbuster earnings report and rosy outlook, jolting up the broad markets. This week, market participants will be focusing on economic reports, and specifically Core PCE, the Fed’s preferred inflation indicator. 

Everything to Know about Macro and Markets

Last week was one for the history books, as stock indexes scored records all around, propelled by Nvidia’s (NVDA) monster rally on Thursday. The Artificial Intelligence leader published its Q4 earnings report after-hours Wednesday, easily surpassing even the highest expectations and providing a powerful outlook for the ongoing quarter.

Furthermore, NVDA’s CEO, Jensen Huang, stated that AI has reached a “tipping point,” with demand surging worldwide “across companies, industries, and nations.” According to Huang, the groundbreaking technology has started a new investment cycle, offering enormous opportunities. As an undisputed leader in AI chip design, Nvidia serves as a bellwether for AI-related firms, the semiconductor industry, and the broader tech-led stock market.

The main indexes jumped up the charts on Thursday, thanks to Nvidia’s “halo effect,” registering their best day since November. The rally ran out of steam on Friday due to profit-taking, but the S&P 500 (SPX), the Nasdaq-100 (NDX), and the Dow Jones Industrial Average (DJIA) still surged to record closes, while the Nasdaq Composite (NDAQ) ended the week within 0.5% from its previous record set in November 2021.

Nvidia’s String of Records

Nvidia set another set of records. On Thursday, the AI company replaced Meta Platforms (META) in the top spot for the largest one-day surge in history, adding $247 billion to its market cap (Meta scored $197 billion on February 2). Although the stock’s rally softened considerably on Friday, it still inched within striking distance of a $2 trillion valuation. That set another record: it has taken NVDA only eight months to double in value from $1 to $2 trillion, less than half the time it took the previous record holder, Apple (AAPL), to reach that mark.

What About the Fed Rate Cut?

The NVDA-led market frenzy eclipsed other important news, particularly Federal Reserve members’ speeches. Several policymakers have opined on the subject of the economy and interest rates in the last few days, voicing their concerns about sticky inflation and the hotter-than-anticipated job market. They have all underlined that while the central bank’s next move will be a cut, the timetable for that first cut is far from certain, with visible differences in opinion between the rate committee members.

Looking ahead, a second reading on GDP, coupled with consumer confidence, manufacturing PMI, and other reports, will guide the Fed’s decision-making. Importantly, this week the Fed will receive the January report for its preferred inflation gauge, the Core PCE, which has a crucial effect on the central bank’s rate decisions.      

Upcoming Earnings and Dividend Announcements

The Q4 2023 earnings season is drawing to a close, but several important earnings releases are scheduled for this week.

This week’s most significant event will be the release of earnings reports of Salesforce (CRM), Zoom Video Communications (ZM), and Berkshire Hathaway (BRK.B).

Other notable earnings reports will be published by Domino’s Pizza (DPZ), Agilent (A), eBay (EBAY), Splunk (SPLK), Monster Beverage (MNST), Okta (OKTA), Snowflake (SNOW), Autodesk (ADSK), Hewlett Packard Enterprise (HPE), NetApp (NTAP), and Lowe’s (LOW).

Ex-Dividend dates are coming this week for NextEra Energy (NEE), Sun Life Financial (SLF), Qualcomm (QCOM), Goldman Sachs Group (GS), Dow Inc (DOW), Bank of America (BAC), PepsiCo (PEP), McDonald’s (MCD), Lockheed Martin (LMT), Realty Income (O), LyondellBasell (LYB), and other dividend-paying firms.

For more exclusive market insights and content from TipRanks Macro & Markets research analyst Yulia Vaiman, click here.


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