Weekly Market Report (29 May 23)

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News Last Week

Nvidia's Q1 fiscal 2023 earnings exceeded market expectations, causing a 26% increase in their share prices. This strong performance was mainly due to the company's leading position in the AI chips production and an increased demand for its data center products.
The NASDAQ rallied due to strong performance in the tech sector, particularly semiconductors. The energy sector and consumer staples have been outperforming in earnings, while financials, utilities, and real estate have been underperforming.
Wall Street began preparing for a potential U.S. default in debt obligations, creating contingency plans to maintain financial market operations.
Treasury yields and mortgage rates hit new multi-year highs, indicating the bond market's expectation for more rate hikes.
The increase in the six-month yield suggests that traders are anticipating another rate hike soon, a shift from the previous cycle in 2018-2019, which was aimed at normalizing monetary policy amidst lower inflation. This time, the rate hikes respond to higher inflation rates, indicating a change in the market's view of the Federal Reserve's policy direction.

The upcoming week is a holiday-shortened trading week due to the Memorial Day holiday on Monday in the U.S.
Investors should pay attention to various currency movements, specifically the strong rebound of USD, the continuous weakness of the Aussie and New Zealand dollars, and the strength of the pound.
The U.S. debt ceiling resolution could have significant market implications. If the issue is not resolved, it could lead to substantial market movements.
Key economic indicators to watch include the Case-Shiller National Home Price Index, FHFA House Price Index, JOLTS report, and the Labor Department’s nonfarm payrolls report, providing insight into the state of the housing and labor markets in the U.S.
Updates on inflation and unemployment rates in the eurozone will offer valuable insights into the region's economic health.
Earnings reports from Salesforce, HP, Broadcom, Dollar General, Lululemon Athletica, Macy’s, and Dell Technologies are due next week, providing a perspective on their performance and the sectors they operate in.