A few key points this week are: Continued tensions in middle-east, inflation data, banks earning calls.
When it comes to the perspective of Israel-Iran conflict, we expect continued uncertainties this week to continue to drag the market down. Oil/energy stocks will continue to rally this week, while Macron's arms embargo view might see some minor pullback for defense sector. But we don't think an actual arms embargo will happen between US-Israel right now.
With the strong job report last week, we anticipate wall-street to focus now on inflation fear again. Especially with rising oil prices, the big rate cut and strong growth, the focus will be on this week's inflation report. However, we don't think inflation will be back so fast.
We do anticipate semiconductor to perform well this week due to renewed confidence in Nvidia's Blackwell demand and AMD upcoming conference. And the slightly bearish uncertainties in the US markets will continue to see rallies in Chinese stocks as investors look elsewhere to put their bets. However, this shift will be temporary and will see an abrupt drop when US market sees more optimism.
We anticipate US banks to see a drop this quarter due to borrowers waiting for the interest rate cut before lending money. This brief transition might potentially see a bloodshed in banking sector as anticipated by Buffett.
Overall, we anticipate some drop caused by war uncertainties, inflation fears, bank earrings balanced by semiconductor rallies. We anticipate a midweek small rise while ending the week with a possible drop or stagnancy due to bank earnings. We anticipate strong resistance in the market and a mild Upward movement week ahead.
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