U.S. equity markets are expected to remain volatile over the coming week as investors focus on cryptocurrencies which have become one of the key indicators for gauging the market’s appetite for risk.
The lost around 30% of its value at some point last week after China announced new regulations that soured the mood for risky assets. The Chinese State Council on Friday reiterated its call to restrict bitcoin mining and trading. The cryptocurrency market was already shaken earlier this week by forced sales and possible US tax consequences.
It is still unclear how the larger market will react if losses in the crypto market continue, but some analysts warn investors need to be cautious in these uncertain times. According to BCA Research strategist Anastasios Avgeriou:
“Some of these apparent liquidation pressures have spilled over into the and, given the recent strong positive correlation between bitcoin and SPX, warn that some caution is still warranted in the equities space, at least in the near term. . “
Aside from cryptocurrency risks, investors will also be watching earnings releases from some of the top US companies which are among the last to release in the current cycle. Here are three of those actions we are tracking:
1. NVIDIA Corporation
Semiconductor giant NVIDIA Corporation (NASDAQ :) is due to release its first quarter results on Wednesday, May 26 after the market closes. Analysts expect the chipmaker to produce EPS of $ 3.28 on revenue of $ 5.39 billion.
NVIDIA shares have lost momentum over the past three months as the chip industry struggles to overcome supply shortages amid high demand. The stock closed at $ 599.67 on Friday, after jumping 88% in the past year.
The Santa Clara, California-based chipmaker is the largest manufacturer of graphics chips used in personal computer games. Over the past few years, NVDA has successfully adapted its technology to the artificial intelligence market, creating a new multi-billion dollar line of business.
In this earnings report, however, investors will be keen to know how the company is ramping up production to counter the industry-wide chip shortage. Many chip customers are struggling to keep up with exploding demand for everything including laptops, game consoles, and other gadgets that use chips.
Salesforce.com Inc (NYSE :), which sells enterprise software and cloud-based customer relationship management services to corporate clients, will release its quarterly results on Thursday, May 27, after the market closes. software is expected to report revenue of $ 5.89 billion and earnings per share of $ 0.88.
The San Francisco-based company disappointed investors in February when it missed analysts’ sales forecasts. This time, however, she gave an optimistic forecast for the first quarter, suggesting that customers had started spending more on her software after the pandemic-fueled downturns.
Salesforce is set to acquire Slack Technologies Inc (NYSE :), in a $ 27.7 billion transaction announced last year, with the aim of fueling its growth through acquisitions. In the last quarter, Salesforce stock fell about 9%, underperforming the general market. It closed Friday at $ 222.58.
3. Best Buy
Best Buy Co Inc (NYSE :), the big-box electronics and tech store chain with stores across the United States and Canada, will also release first quarter results on Thursday, before the market opens. . The retailer is expected to report earnings of $ 1.36 per share and revenue of $ 10.32 billion, according to analyst consensus.
Stocks are up about 15% this year, outperforming the benchmark S&P 500, with Best Buy continuing to benefit Americans who splurge to improve their home electronics in today’s environment of working from home. The stock closed at $ 114.93 on Friday.
In order to maintain this momentum, Best Buy must show that it can maintain the level of growth seen during the pandemic, as the U.S. economy prepares to fully reopen this summer and COVID infections continue to decline.
Although demand for its products remains above normal levels, “there is a high level of uncertainty related to the impacts of the COVID-19 pandemic which makes it difficult to predict how sustainable these trends will be,” the director said. financier Matt Bilunas to investors in February.