Week ahead: Markets hinge on Nvidia earnings

Five out of the last 6 quarters, California-based chipmaker Nvidia has gained 10% or thereabouts in the day after reporting earnings. Options markets indicate a similar kind of move this time. We could be in for a major market-moving event when it releases its FY 25 Q2 results on Wednesday. Meanwhile, we are looking ahead to key US inflation numbers that are expected to show the Federal Reserve can cut rates in September, whilst the ECB will pay close attention to Eurozone inflation data which is also out on Friday.

Here are the week’s key events:

Monday, Aug 26th: US Durable Goods Orders, Germany ifo Survey

The week starts with London markets closed for the summer bank holiday. German ifo business climate survey details will be eyed by traders in Europe for the DAX and EUR crosses. Last week’s manufacturing PMI suggests the mood is darkening, with the index slipping to 42.1 from 43.2, deep in contraction. In the US the focus is on the latest durable goods orders, with market participants watchful for signs of cretracks in the economy following the recession scare of early August that sparked a sharp selloff in equity markets.

Tuesday, Aug 27th: Japan Inflation Report

Inflation and a weak yen forced the Bank of Japan to raise rates recently. So JPY crosses should be in sharp focus early in the Asian session as the latest BOJ core CPI inflation report is released. This number has been fairly steady around the 2% level lately, but might offer some clues as to what the BOJ and Japanese yen might do next. Final GDP data for German and UK shop price figures are the dim highlights from the European session. In the US, look to the S&P/CS 20-year HPI, the Richmond manufacturing index and the latest Conference Board consumer confidence report.

Wednesday, Aug 28th: Nvidia Earnings Report, Australia Inflation Data

The Nvidia earnings report is out today. The market has been all about Nvidia this year, even if the equal weight S&P 500 has been doing better lately. Another beat and raise? We don’t know – a lot of attention is on potential delays in the release of the next-generation Blackwell (BW) chip, and ability to meet soaring demand. Analysts will assess whether management’s belief in the last earnings release that they expect "significant" Blackwell revenue this year is realistic.

“We are not expecting any meaningful change in tone or messaging relative to what NVDA has focused on since the company reported its F1Q results, i.e. the company’s longer-term road map and continued investment in organic and collaborative software offerings,” Stifel analysts said in a note. Meanwhile, UBS expects strong demand for Nvidia’s Hopper and H200 units to guide toward $31-32 billion, with an implied data centre revenue close to $28 billion.

Elsewhere, look to Australian CPI inflation numbers. Last time these came back down to 3.8%, having jumped from 3.6% to 4.0%.

Earnings: Nvidia (NVDA), HP (HPQ), CrowdStrike Holdings (CRWD), Salesforce (CRM)

Thursday, Aug 29th: German CPI Data, US Q2 GDP Estimate

Germany’s preliminary CPI inflation figures will be the main focus at the start of the European session. Provisional figures last month were confirmed at 0.3% month-on-month and 2.3% yoy. This marked an acceleration as services inflation strengthened. Whilst the eco data remains lacklustre, the ECB would be worried about another rise in German inflation should it spread to the rest of the bloc. Then it’s over to the US second quarter GDP estimate, provisionally called at +2.8%. Unemployment claims data could be more important, though.

Earnings: Lululemon (LULU)

Friday, Aug 30th: Tokyo Core CPI, Eurozone Flash CPI

The week ends with a bit of a data deluge. Tokyo core CPI, which has firmed up to 2.2% in July from a low of 1.6% in April, will be the main focus for the Asian session. A clutch of retail sales reports from Australia, Japan, France and Germany may be of minor interest. The main event is the flash CPI inflation data covering the whole Eurozone. Core inflation has ticked up to 2.9% and held steady at this level the last three months. Last week’s negotiated wage data could suggest the ECB will be mindful of this moving up further.

For the US session, core PCE inflation is the big-ticket item, though the Fed is probably more focused on the September 6th jobs report. Recent reports back the case for cuts with inflation in 12 months through June at 2.5%, the smallest year-on-year gain in four months. Core inflation increased at a 2.3% annualized rate in the three months through June, a sharp decline from the 2.7% recorded in May.

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