Markets on edge as earnings and inflation take centre stage
- NexxtGen Markets
- 2 days ago
- 3 min read
Good morning, here's the latest Global Financial Markets news from Steve Halls at NexxtGen Markets here in the City of London...
📉 Market snapshot: S&P slips amid rising risks
The S&P 500 paused its rally, slipping after a six-day winning streak. Investors are growing cautious ahead of key earnings reports from Target, Lowe's, and Snowflake. Meanwhile, geopolitical tensions in the Middle East have pushed oil prices higher, while safe-haven currencies like the yen and Swiss franc gained strength. Interestingly, Bitcoin surged past $107,000, indicating increased risk appetite in certain corners of the market.
💹 Bitcoin breaks $107K: Eyeing the next milestone
Bitcoin has crossed the $107,000 mark, approaching its January all-time high of $109,241.11. This surge is being fuelled by institutional inflows into spot ETFs and mounting concerns around sovereign debt and fiat debasement. While some speculative options traders have placed bets on Bitcoin reaching $300,000 by late June, most analysts view this as overly optimistic. A more realistic target in the near term would be a push toward the psychologically significant $110,000 level, assuming macro conditions remain favourable.
🇬🇧 UK inflation surges to 3.5%
UK inflation unexpectedly rose to 3.5% in April, up from 2.6% in March. The increase was driven by higher energy, water, and transport costs. Core inflation also rose to 3.8%, challenging the Bank of England’s ability to deliver interest rate cuts in the near term. The data complicates the central bank’s forward guidance and may prompt a delay in policy easing that many had priced in for Q3.
🛒 Retail earnings in focus: Target and Lowe’s
Target is due to report Q1 earnings, with analysts expecting a 16% year-over-year decline in EPS to $1.70 and flat revenue at $24.4 billion. The retailer continues to face headwinds from renewed tariffs on Chinese imports, which could weigh on margins, as well as a cautious US consumer.
Lowe’s, meanwhile, is projected to post a 6% year-over-year drop in earnings to $2.89 per share and a 2% decline in sales to $21.03 billion. Investors will be focused on inventory management, same-store sales performance, and commentary around potential pricing pressures from new trade policy measures.
☁️ Tech spotlight: Snowflake's earnings preview
Snowflake is set to announce Q1 earnings, with expectations for a 33% year-over-year revenue increase to $828.7 million. The cloud data platform continues to expand aggressively in the enterprise AI and analytics space. However, margins and forward guidance will be key metrics as investors assess whether Snowflake can convert strong top-line growth into sustainable profitability.
📈 Movers & shakers
D-Wave Quantum Inc. jumped 26% to $16.56 as quantum computing stocks gained traction.
Oil rose 1% to $62.64 per barrel amid geopolitical tensions.
Adriatic Metals rallied 20% to £213 on strong silver and zinc prospects.
Indus Gas Ltd fell 7% to £5.11, giving back recent gains.
📅 Economic calendar
08:00 GMT – German IFO Index (May): Business climate expected at 86.4
08:30 GMT – UK Flash PMIs (May): Manufacturing expected at 46.0, Services at 49.3
12:30 GMT – US Initial Jobless Claims & Chicago Fed Activity Index (April): Claims at 231K, Index at -0.2
13:45 GMT – US Flash PMIs (May): Manufacturing expected at 50.3, Services at 50.6
🔍 What to watch
The US housing market is showing early signs of a slowdown. In April, single-family housing starts and building permits both declined. New tariffs on Canadian lumber are expected to add between $7,500 and $10,000 to the cost of a newly constructed home, further straining affordability and potentially delaying new projects. This development could have knock-on effects for homebuilder stocks and the broader construction sector.
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