1. Nvidia, Walmart headline weekly earnings calendar
Quarterly earnings season marches on this week, highlighted in particular by aritificial intelligence darling Nvidia and low-cost store chain Walmart.
Nvidia has seen its value soar over much of the last year thanks to surging enthusasism over AI. The California-based group, which is widely viewed as one of the most important makers of the high-end graphics processors that power the nascent technology, recently overtook Google-parent Alphabet (NASDAQ:GOOGL) as the U.S. stock market’s third-most valuable company.
Along with its fourth-quarter results following the closing bell on Wednesday, investors will likely be keen to parse through any commentary from Nvidia about the path ahead for AI demand this year.
Elsewhere, Walmart will step into the spotlight on Tuesday. The big-box giant could provide a glimpse into the spending habits of American consumers who have been carefully watching their wallets during a time of elevated interest rates and high inflation. What Walmart has to say about these trends will subsequently be in sharp focus.
2. Fed minutes highlight upcoming economic releases
It should be a slower week on the U.S. economic calendar after a spate of blockbuster data releases that have altered some expectations for potential Federal Reserve interest rate cuts.
Highlighting the agenda will be minutes from the U.S. central bank’s January policy meeting on Wednesday, which could provide a fresh peek into how policymakers view the evolution of borrowing costs this year.
Last month, the Fed left rates unchanged at a more than two-decade high, while Chair Jerome Powell stressed that officials wanted to see more evidence that inflation was sustainably cooling back down to their 2% target before starting to contemplate reductions. A March cut, Powell noted at the time, was not his “base case.”
Powell has since moved to reiterate this message, and that push-back may be re-enforced in the minutes. Meanwhile, data has shown that price gains have remained sticky in the world’s largest economy and the labor market has stayed resilient, possibly bolstering the Fed’s case for delaying possible rate cuts this year.
3. Chinese markets reopen higher after Lunar New Year holiday
China’s domestic stock markets rose on Monday as trade resumed after the Lunar New Year holiday, amid signals that consumer spending had picked up and in some cases surpassed pre-COVID levels during the week-long break.
The blue-chip Shanghai Shenzhen CSI 300 index closed higher by 1.1%, while the Shanghai Composite index climbed 1.6%.
Sentiment was aided chiefly by official data over the weekend showing that Chinese consumers spent more on travel, shopping and eating out during the holiday than they had a year ago. The readings boosted hopes that Chinese consumer spending — which is a key driver of economic growth — was now recovering after a three-year slump.
4. EU set to fine Apple for 500 million euros – FT
The European Union is poised to hit Apple (NASDAQ:AAPL) with a fine of around 500 million euros for breaching the bloc’s laws surrounding music streaming, according to a report in the Financial Times.
Citing five sources with knowledge of the matter, the paper said the penalty, which stems from an EU antitrust investigation into whether the tech giant purposefully used its platform to favor its own services over its competitors, is due to be announced next month. The fine would be the first levied by the EU on Apple.
In particular, the probe was looking into whether Apple prevented apps from offering iPhone users cheaper music subscription alternatives outside of the company’s App Store, the FT reported. Brussels will deem Apple’s actions illegal and against its single-market competition protection rules, the FT added.
Apple and the EU Commission both declined to comment on the upcoming ruling to the FT.
5. Oil slips amid demand worries
Oil prices fell in early European trade on Monday, weighed down by concerns over a potential demand slowdown.
Brent oil futures expiring in April fell 1.0% to $82.62 a barrel, while West Texas Intermediate crude futures dropped 1.0% to $77.68 a barrel by 04:08 ET (09:08 GMT). The closure of U.S. markets on Monday is expected to keep price movements relatively subdued.
Both benchmarks ended the prior week higher, although gains were held back by worries over sluggish demand in the face of higher-for-longer U.S. interest rates and stubborn inflationary pressures. Higher rates may dent U.S. economic activity in the world’s largest oil consumer.
The International Energy Agency also warned last week of a demand slowdown in 2024, with the warning coming just as data showed the U.K. and Japan entering a recession.
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