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This week’s attention turns to the annual meeting of the Federal Reserve and other major central banks in Jackson Hole, Wyoming. Investors will scrutinize Fed Chair Jerome Powell’s speech on the 25th for clues about the rate outlook.

And although the second quarter earnings season is virtually over, we anticipate Nvidia’s quarterly earnings announcement on the 23rd. Investors’ focus will be on countermeasures against the real estate industry crisis and local government debt, as revealed by the debt problem of China’s Hengda Group (Evergrande), as well as the world’s second-largest economy’s downturn.

Key issues in the market to watch out for this week include:

The key variable that will influence the market trend this week is the Fed’s Summer Recreation Conference from the 24th to 26th. In particular, on the 25th, Chairman Powell’s speech is scheduled at 10:05 am Eastern Time.

Considering that the two main drivers of this year’s rise in the New York stock market were the AI ​​boom and expectations for the end of the Fed’s interest rate hike, what Powell says in his speech on the 25th regarding additional interest rate hikes could determine the future market trend.

Minutes from the Federal Open Market Committee (FOMC) meeting for July released on the 16th of last week indicate that most policymakers are still concerned about the risk of rising inflation, indicating that further rate hikes cannot be ruled out.

Investors will focus on whether the Fed believes more policy tightening is needed to keep inflation down or whether enough progress has been made to keep interest rates in check. And it will also look for clues as to whether the Fed is weighing the possibility of cutting rates in 2024.

Investors in contracts tied to the Fed’s benchmark rate have added to their bets that they won’t raise it any further, and 99 of 110 economists polled by Reuters last week see the risk of a US recession diminishing.

Everyone is paying attention to the quarterly results of Nvidia (NASDAQ:NVDA), which will be released after the New York market closes on the 23rd. The announcement of the first quarter results in May was a huge boon that caused a sensation in the market.

Although sales in the first quarter fell 13% to $7.19 billion from a year ago, net profit soared 26% over the same period to $2 billion, or $1.09 per share. It far exceeded market expectations for earnings of $0.92 per share on sales of $6.52 billion.

Thanks to the prospect that performance will soar with AI wings, Nvidia broke through a market cap of $1 trillion for the first time as a semiconductor company on May 31, a week later.

Nvidia predicted that sales in the second quarter would reach $11 billion, and that there could be an error of around 2%. That beats analysts’ expectations of $7.15 billion.

In addition, results are expected from Australian mining companies BHP Billiton and Zoom Video (NASDAQ:ZM) on the 21st , Lowe’s (NYSE:LOW) on the 22nd , Snowflake (NYSE:SNOW) on the 23rd, and INTUIT (NASDAQ:INTU) on the 24th.

China cut its one-year benchmark lending rate on Monday as authorities seek to ramp up efforts to stimulate credit demand, but surprised markets by keeping the five-year rate unchanged amid broader concerns about a rapidly weakening currency.

The recovery in the world’s second-largest economy has lost steam due to a worsening property slump, weak consumer spending and tumbling credit growth, adding to the case for authorities to release more policy stimulus.

However, downward pressure on the yuan means Beijing has limited room for deeper monetary easing, analysts say, as a further widening of China’s yield differentials with other major economies could trigger yuan selloffs and capital flight.

The one-year loan prime rate (LPR) was lowered by 10 basis points to 3.45% from 3.55% previously, while the five-year LPR was left at 4.20%.

In a Reuters poll of 35 market watchers, all participants predicted cuts to both rates. The 10 bp cut in the one-year rate was smaller than the 15 bp cut expected by most poll respondents.

China cut several key and unexpected interest rates last week, but analysts say the move so far has been too little, too late, and much stronger action is needed to stem the economic downturn.

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