Graphic: Take Five: Crypto bulls and euro bears

BTCS

15/11/2024 08:52

Nov 15 (Reuters) - Chip behemoth Nvidia is reporting
quarterly results and global PMI data is rolling in as markets
continue to digest the fallout from Donald Trump's U.S.
presidential election win, with bitcoin and the euro taking
centre-stage. 
    Here's a look at the week ahead for markets from Rae Wee in
Singapore, Ira Iosebashvili in New York, Sam Indyk, Naomi
Rovnick and Amanda Cooper in London.
        
    1/CHIP, CHIP, HURRAY 
    The U.S. earnings season is coming to a close with third
quarter results from chipmaker Nvidia  NVDA.O , a bellwether for
the artificial intelligence craze that has boosted stocks this
year.
    Nvidia's chips are seen as the gold standard in the AI-space
and its shares are up nearly 200% this year, a gain that saw it
dethrone Apple as the world's most valuable company in October.
The chipmaker's hefty weighting in the S&P 500 has helped drive
the index to record highs in 2024.
    But Nvidia's blistering multi-year run has also raised the
bar for earnings outperformance - a slip-up could fuel worries
that the market's AI hopes have outstripped reality.
    Analysts see Nvidia increasing third-quarter revenue by over
80% to $32.9 billion when it reports its results on Nov. 20,
LSEG data showed earlier this month.
    
    2/ A $100,000 QUESTION
    Trump's win has unleashed a stampede of crypto bulls intent
on driving bitcoin to the moon. The price has risen 30% since
the Nov. 5 election day and, having topped $90,000 for the first
time on record  BTC= , is showing no signs of stopping.    
    The entire crypto market has surpassed $3 trillion for the
first time on record. Bitcoin and co are worth about as much as
Elon Musk's Tesla  TSLA.O , Facebook parent Meta  META.O  and
Warren Buffett's Berkshire Hathaway  BRKb.N  put together.
    The promise of light-touch U.S. regulation means investors
can't get enough of bitcoin right now. Flows into
exchange-traded funds have rocketed in recent days. LSEG data
shows the largest ETFs tracked by Reuters took in a net $3.5
billion in the week to Nov. 14, the most since March 15. There
seems to be little standing in the way a six-figure bitcoin
price tag.
    
    3/A QUESTION OF PARITY 
    Threats of Trump tariffs are heightening fears about the
weak euro area economy and the common currency has been
flailing. But how low could it go?  
    At around $1.054  EUR=EBS , the euro has slumped about 5%
from more than one-year highs in September. Some analysts now
expect it to fall to parity with the dollar. 
    The last ZEW Institute survey showed German investor
confidence is gloomy while traders see a one in five chance the
European Central Bank will cut rates by 50 basis points next
month. Breakdown German GDP data due out on Nov 22 might give
more hints. 
    Look out for silver linings, though. A weaker euro boosts
exporters and faster rate cuts could juice up bank lending and
business activity. 
    
    4/ AT YOUR SERVICE 
    Friday's preliminary survey data on business activity will
sketch a picture of the global economy before Trump returns to
the White House in January. 
    PMIs from Europe and the U.S. will likely confirm that
global manufacturing activity remains stuck in a downturn, while
the services sector soldiers ahead. 
    Each country is facing its own unique uncertainties.    
Germany's flagging economy is on the cusp of new elections,
Britain's employers are bracing for a rise in social security
contributions expected to hit hiring and costs. But it's Trump's
re-election that is dominating the outlook.
    The survey could give early indications on how U.S.
companies are responding to the threat of Trump's proposed
import tariffs - possibly boosting inventories before tariffs
kick in - a data point that will be closely watched by markets
going forward.    

    5/ THE RUPIAH CONUNDRUM    
    Indonesia's central bank will decide on interest rates on
Wednesday and it is a toss up whether the policy makers will 
ease rates or stand pat.
    Slowing inflation, disappointing growth and the Fed's recent
rate cut cement the case for further easing. But the weakening
rupiah  IDR= , currently languishing near three-month lows and
down more than 4% from this year's peak, is putting a spanner in
the works for a central bank whose main mandate is to maintain
currency stability, even though much of that might be driven by
the strong dollar. 
    Elsewhere in emerging markets, rate decisions in Turkey and
South Africa are due on Thursday. South African policymakers are
expected to deliver a 25 basis point cut at their final meeting
of the year. Upward revisions to inflation forecasts in Turkey
make chances of any near-term easing unlikely.
   

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Nvidia revenues projected to peak anew    https://reut.rs/4fIKpiD
Bitcoin makes new highs after Trump’s victory    https://reut.rs/4hPQCLk
Euro at a year's low    https://reut.rs/3Z702L6
Eurozone business activity picked up slightly in October    https://reut.rs/48Mkgxb
Bank Indonesia sets rates    https://reut.rs/3O9j51q
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Graphics by Pasit Kongkunakornkul, Vineet Sachdev, Kripa
Jayaram, Sumanta Sen and Prinz Magtulis; compiled by Karin
Strohecker; editing by Philippa Fletcher)