Key Events This Week: Nvidia Earnings And FOMC Minutes

It’s a quiet start to the week thanks to the President’s Day holiday in the US, and it’s also a relatively quiet week on the data front, however as DB’s Jim Reid writes in his weekly preview, “it‘s a reflection of the world we live in that the most important event of the week may be Nvidia’s earnings on Wednesday.”

Indeed, NVDA is now the 4th largest company in the world and the best performer in the S&P 500 so far this year (+46.6% YTD), so this will be very important for sentiment. China’s return from holidays will also add some interest after its recent equity market volatility and weak growth/inflation numbers (as noted earlier, it was the unexpected arrival of the plunge protection team that helped send Chinese stocks to session highs at the close). Here are the rest of the week’s earnings:

Needless to say, all of the focus will be on NVDA earnings – Wednesday 2/21 (numbers hit at 420pm, conf call at 5pm). 

While we will do a more detailed preview shortly, here are the highlights: according to Goldman, options are pricing in a ~11% move on earnings next week – notable given the last two quarters, NVDA hasn’t budged T+1 (‘consolidation’ events), despite beating EPS by 20-30% on both prints, with Goldman top TMT trader Peter Callahan writing that there is “plenty of tactical debate whether this print will be a local top or a ‘break-out’ moment for the stock and for the A.I. trade (.. from my seat, feels like consensus is learning more towards the former..).”

NVDA is now up more than 50% since last quarter’s earnings, surpassing both GOOGL & AMZN in market cap in the interim. Investors are looking for Nvidia to once again deliver a clear beat-and-raise print — for context, Nvidia has beat revenue by ~$2bn the last couple of quarters (vs cons modeling ~$20bn in Jan qtr revenues), which will likely serve as a measuring stick alongside commentary on the April quarter (recall, Nvidia had guided Jan qtr +10% q/q) and the 2025+ roadmap (both visibility + product cadence). Next catalyst = NVIDIA GTC 2024 | March 18–21.

Elsewhere, we have the FOMC January minutes on Wednesday but a lot of data has flowed under the bridge since then and market pricing has moved closer to the Fed’s dots and tone since then so its hard to see how much we’ll learn from their thoughts three weeks earlier. The account of the January ECB meeting on Thursday will also be of note.

In terms of data, the global flash PMIs come out on Thursday and in the US this week’s claims on the same day correspond to survey week for payrolls. Winter storms may make data challenging to interpret in the next few weeks though. Tomorrow’s leading indicators and Thursday’s existing home sales are the other US highlights.

Over in China, after leaving the 1-yr MLF rate unchanged yesterday (as expected), tomorrow sees them decide on the 1-yr and 5-yr loan prime rates. The market is expecting the latter to be cut 10bps to 4.1%.

The full list of events in the week ahead, including earnings and central bank speakers, is below. Thursday is a big day for Fed speak including Vice Chair Jefferson who we haven’t heard from since the FOMC, so his views at the center of the committee will hold some weight.

Courtesy of DB, here is a day-by-day calendar of events

Monday February 19

• Data: Canada January raw materials and industrial product price

Tuesday February 20

• Data: US January leading index, February Philadelphia Fed non-manufacturing activity, China 1-yr and 5-yr loan prime rates, Japan January trade balance, Italy December current account balance, EU 27 January new car registrations, ECB December current account, Eurozone December construction output, Canada January CPI
• Earnings: Walmart, Home Depot, BHP, Palo Alto Networks, Medtronic, Air Liquide, Carrefour

Wednesday February 21

• Data: UK January public finances, France January retail sales, Eurozone February consumer confidence
• Central banks: Fed’s January FOMC minutes, Bostic speaks, BoE’s Dhingra speaks
• Earnings: Nvidia, Rio Tinto, Analog Devices, Synopsys, Glencore, BAE, Vertiv, Rivian, Etsy
• Auctions: US 2-yr FRNs (reopening $28bn), 20-yr Bonds ($16bn)

Thursday February 22

• Data: US, UK, Japan, Germany, France and the Eurozone February PMIs, US January existing home sales, Chicago Fed national activity index, initial jobless claims, France February manufacturing confidence, Canada December retail sales
• Central banks: Fed’s Jefferson, Bowman, Harker, Cook and Kashkari speak, ECB’s account of the January meeting, BoE’s Greene speaks
• Earnings: Vale, Nestle, Intuit, Booking, Mercedes-Benz, Iberdrola, AXA, Block, Newmont, Engie, Cheniere, Moderna, Rolls-Royce, Anglo American, Carvana
• Auctions: US 30-yr TIPS ($9bn)

Friday February 23

• Data: China January new home prices, UK February GfK consumer confidence, Germany Q4 private consumption, government spending and capital investment, February ifo survey
• Central banks: Fed’s Waller speaks, ECB’s CES, Schnabel speaks, BoE’s Greene speaks
• Earnings: Deutsche Telekom, Allianz, BASF, Warner Bros Discovery

Turning to just the US, Goldman notes that the key economic data releases this week are the jobless claims report on Thursday and the existing home sales report on Friday, while the minutes from the January FOMC meeting will be released on Wednesday. There are several speaking engagements by Fed officials this week, including Fed Vice Chair Jefferson, Fed Governors Bowman, Cook and Waller, and Presidents Bostic, Harker, and Kashkari.

Monday, February 19

• No major data releases scheduled.

Tuesday, February 20

• No major data releases scheduled.

Wednesday, February 21

• 08:00 AM Atlanta Fed Bostic (FOMC voter) speaks: Atlanta Fed president Raphael Bostic will give welcoming remarks at the Airports Council International CFO Summit in Atlanta. On January 18, Bostic said “Premature rate cuts could unleash a surge in demand that could initiate upward pressure on prices… [but] if we continue to see a further accumulation of downside surprises in the data, it’s possible for me to get comfortable enough to advocate for normalization sooner than the third quarter.”
• 02:00 PM FOMC meeting minutes, January 30-31 meeting: The FOMC kept the target range for the federal funds rate unchanged at its January meeting. During the press conference, Fed Chair Powell noted that the committee “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent” and gave a strong signal that a March funds rate cut “is probably not the most likely case.”

Thursday, February 22

• 08:30 AM Initial jobless claims, week ended February 17 (GS 210k, consensus 218k, last 212k);  Continuing jobless claims, week ended February 10 (GS 1,895k, consensus 1,880k, last 1,895k)
• 10:00 AM Fed Vice Chair Jefferson (FOMC voter) speaks: Federal Reserve Vice Chair Philip Jefferson will give remarks at the International Economics event held by Peterson Institute. The event will be livestreamed, and a moderated Q&A is expected.
• 01:00 PM Fed Governor Bowman (FOMC voter) speaks: Fed Governor Michelle Bowman will speak at the Exchequer Club luncheon in Washington DC. A moderated Q&A is expected. On January 8, Bowman said “While the current stance of monetary policy appears to be sufficiently restrictive to bring inflation down to 2 percent over time, I remain willing to raise the fed funds rate further at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”
• 02:00 PM Philadelphia Fed President Harker (FOMC non-voter) speaks: Philadelphia Fed President Patrick Harker will give a speech on the economic outlook in Newark, Delaware. The event will be livestreamed. Speech text and moderated Q&A are expected.
• 05:00 PM Fed Governor Cook (FOMC voter) speaks: Federal Reserve Governor Lisa Cook will deliver a keynote address at a conference hosted by Princeton University on “Macrofinance in the Long Run: New Insights on the Global Economy.”
• 05:00 PM Minneapolis Fed President Kashkari (FOMC non-voter) speaks: Minneapolis Fed President Neel Kashkari will participate in a panel discussion focused on economic trends and the outlook for 2024 and the growth of Minnesota’s economy. A Q&A with audience is expected. The event will be livestreamed.
• 07:35 PM Fed Governor Waller (FOMC voter) speaks: Fed Governor Christopher Waller will speak on the economic outlook at the University of St. Thomas Minneapolis campus. Speech text and moderated Q&A are expected. The event will be livestreamed. On January 16, Waller said “As long as inflation doesn’t rebound and stay elevated, I believe the FOMC will be able to lower the target range for the fed funds rate this year.”

Friday, February 23

• 09:45 AM S&P Global US manufacturing PMI, February preliminary (consensus 50.5, last 50.7): S&P Global US services PMI, February preliminary (consensus 52.1, last 52.5)
• 10:00 AM Existing home sales, January (GS +7.0%, consensus +5.0%, last -1.0%)

Source: DB, Goldman, BofA