DAX Rises on €500B Stimulus; Fed & Nvidia in Focus for this week

Global Markets Mixed as Geopolitical & Economic Uncertainty Grows

• US stock futures slip, with recession fears weighing on sentiment despite a rebound on Friday.
• Oil prices hit a two-week high, driven by US airstrikes on Yemen's Houthis, raising supply concerns.
• Asian markets rally, supported by China’s new stimulus measures, though economic data remains mixed.
• European markets remain resilient, with Germany’s proposed €500 billion fiscal package boosting sentiment.
• Federal Reserve expected to hold rates at 4.5% this week, while Trump-Putin peace talks remain in focus.
• US dollar near five-month lows, while gold hovers near record highs as investors seek safe-haven assets.

Germany: Fiscal Package Moves Forward

• Green Party agrees to CDU/CSU-SPD fiscal reset plan, clearing the way for a constitutional amendment vote.
• Bundesverfassungsgericht (Germany’s Constitutional Court) rejects AfD and Left Party’s legal challenges, allowing the Bundestag to proceed.
• Bundesrat approval still required, but market sentiment remains optimistic.
• DAX & MDAX posted strong gains on Friday, with MDAX expected to outperform due to greater domestic exposure.
• Bundesanleihen (German bond yields) climbed as investors bet on higher government spending.

US Consumer Confidence Hits New Lows

• University of Michigan Consumer Sentiment Index (May):
• Fell from 64.7 (Feb) to 57.9, lowest since July 2022.
• Expectations Index plunged from 64.0 to 54.2, indicating broad pessimism.
• Confidence fell across all demographics, regardless of age, income, or political affiliation.
• Inflation Expectations Soar:
• 12-month expectations: Jumped from 4.3% to 4.9%, highest since November 2022.
• 5-year expectations: Surged from 3.5% to 3.9%, largest jump since 1993.
• Fed Impact:
• Market impact was limited, as other consumer confidence indices had already shown weakness.
• US import tariffs & economic uncertainty continue to rattle consumers.

The Week Ahead – Key Events & Earnings

Monday (Today)

• High volatility expected in Tesla & D-Wave Quantum, based on options trading.
• Earnings Reports: Getty Images, Niu, Fibrogen (double-digit price swings expected for the latter two).
• Piper Energy Conference (May 17-18):
• Companies presenting: Phillips 66, Oceaneering International, Helix Energy.
• Oppenheimer 35th Annual Healthcare MedTech & Services Conference (May 17-21)
• Notable participants: RadNet, AngioDynamics, Butterfly Networks.
• Retail Sales Report (February) – Expected Flat
• Excluding gas & auto categories, sales growth expected to be minimal.

Tuesday (May 18)

• Earnings: Xpeng, Tencent Music, ZTO Express.
• Chevron CFO Eimear Bonner presents at Piper Sandler Energy Conference.
• Nvidia CEO Jensen Huang delivers keynote at GTC Event.
• Expected Announcements:
• Robotics
• Sovereign AI & AI agents
• Automotive AI tech
• Impacted Stocks: Broadcom, Marvell, Qualcomm.

Wednesday (May 19)

• Earnings: General Mills, Signet Jewelers, Five Below.
• US Crude Oil Inventories Report (13:30 GMT).
• Federal Reserve Interest Rate Decision (Expected to remain at 4.5%).
• Jerome Powell Speech Post-Fed Decision.

Thursday (May 20)

• Earnings: FactSet, FedEx, Nike, Micron, Lennar.
• Nvidia’s Quantum Day Event – Major Quantum Computing Developments Expected.
• WTI Crude April Futures Expiration – Could Drive Volatility in Energy Markets.
• Nike’s Earnings Call (5 PM ET):
• China trends update critical for:
• Starbucks
• Estee Lauder
• Skechers

Friday (May 21)

• Earnings: NIO, Carnival Cruises.

Market Outlook

• Geopolitical risks growing: US strikes in Yemen and Trump-Putin talks could drive volatility.
• Recession fears rising amid weak consumer sentiment & falling Treasury yields.
• Germany’s fiscal package could boost European stocks, especially the MDAX.
• Nvidia’s GTC announcements could shake up AI & semiconductor markets.
• Gold & oil remain supported amid uncertainty, while Bitcoin remains under pressure.
• Volatility expected across energy, tech, and healthcare stocks throughout the week.