Weekly Market Outlook: NVIDIA, Walmart Earnings; Key Signals from ECB’s Lagarde

Insights – This week, Bank of Japan Governor Kazuo Ueda mentioned Japan’s moderate economic recovery and hinted at further rate hikes if trends align with expectations. Meanwhile, all eyes are on ECB President Christine Lagarde's speech on Tuesday, with investors eager for clues on future monetary policy. Major economies, including the U.S., will release PMI data, which could provide insights into the effectiveness of ongoing rate cuts. Furthermore, AI leader NVIDIA is set to release Q3 earnings on Wednesday, with expectations of outperforming forecasts for the eighth consecutive quarter. Retail giants Walmart and Target will also report earnings.

Last week, U.S. October CPI rose 2.6% year-over-year, meeting expectations and marking a three-month high. Retail sales grew by 0.4%, slowing from September but still strong. Fed Chair Jerome Powell noted no urgent need for rapid rate cuts, as the labor market has cooled. Walt Disney reported better-than-expected Q4 earnings with revenue up 6% year-over-year.

NVIDIA Q3 Earnings

NVIDIA is expected to beat earnings forecasts once again, marking its eighth consecutive quarter of outperformance. Revenue is projected to rise by 83% year-over-year, with net income up 84% and EPS up 94%. However, supply constraints on its new Blackwell chips may impact forward guidance.

Morgan Stanley analyst Joseph Moore expects NVIDIA’s Q3 performance to remain strong but cautions that the company’s new product lineup, especially the Blackwell architecture, is entirely constrained by supply, which could impact its Q3 performance and forward-looking guidance.

Lagarde’s Speech

ECB President Christine Lagarde will speak on Tuesday. ECB President Christine Lagarde will speak on Tuesday, with officials now considering further easing, including a potential 50-basis-point rate cut following the ECB’s third cut last month.Lagarde recently stated that inflation is moving towards the ECB’s 2% target but warned the battle isn’t over yet.

On October 31, Lagarde noted that eurozone inflation is nearing the ECB’s 2% target but cautioned the fight isn’t over, warning of upcoming inflation increases due to base effects.

Global PMI Data

Several major economies, including the U.S., will release their latest PMI data this week. As the rate-cutting cycle continues in the U.S. and Europe, these data points are crucial for assessing whether monetary policy is supporting economic recovery.

During his campaign, the newly elected U.S. president Trump pledged to impose a 10% tariff on all foreign goods imported into the U.S. and a 60% tariff on imports from China. If Trump follows through on these promises, U.S. exports could suffer a 3% to 4% hit as the rest of the world retaliates with its own tariffs. In an escalating trade war, U.S. manufacturing would be impacted.

Key Economic Data

Tuesday: Eurozone October CPI YoY Final

Thursday: U.S. October Conference Board Leading Index MoM

Friday: U.S. November S&P Global Manufacturing PMI Preliminary, U.S. November University of Michigan Consumer Sentiment Final

Key Earnings

Monday: Niu Technologies, Trip.com

Tuesday: Walmart, Futu Holdings, Weibo

Wednesday: NVIDIA, Snowflake