What to Expect in the Week Ahead (NVDA, PANW, and TGT Earnings; Home Sales Data and Fed's Minutes)

For fiscal 3Q, it has guided total billings in the range of $2.3 billion to $2.35 billion, representing year-over-year growth of 2% to 4%.Revenue is expected to grow 13% to 15% year-over-year to between $1.95 billion to $1.98 billion and adjusted earnings per share (EPS) is forecast to be in the range of $1.24 to $1.26.

The Bank of America analysts see Palo Alto Networks reporting solid overall results for the quarter on the back of reduced expectations and growth in Next Generation Security (NGS), likely offset by weak firewall trends.
“We divide up our expectations into three parts: we expect firewalls to be weak yet believe Street expectations are low,” they wrote in a note to clients.

Deutsche Bank analysts have pointed out that the after-hours update will coincide with the one-year anniversary of NVIDIA's groundbreaking report from May 2023, which marked a significant shift in the market.“We expect the company to continue its trend of delivering healthy multi-billion dollar beats [and] raises on still healthy demand for AI compute,” analysts said in a note.

The bank acknowledged some may be putting off orders before the release of NVIDIA's latest Blackwell graphics processing unit, expected this year.

However, “we still expect aggregate demand trends to remain healthy,” Deutsche added, likely meaning NVIDIA's near-term guidance will be unaffected.

NVIDIA had guided in February for revenue to come in around US$24 billion this year, alongside gross margins of roughly 76.3%.

It is highly probable that the minutes from the FOMC won't offer much fresh insight into the Federal Reserve's forthcoming decisions. Nevertheless, it remains an event of significance that demands attention. Their last minute reminded us that “members” wanted greater confidence that “inflation is moving sustainably towards 2%”. We know that inflation came in slightly softer and in line with market expectations, but it hasn't come down quickly enough to provide the confidence for the Fed it seeks to signal a cut, as much as traders want them to.

We also have plenty of Fed speakers, but looking through many of the titles suggests they might not be the biggest drivers for market volatility. But like the minutes, traders need to have these on their radar. Just in case.

Inflation and employment reports tend to be the main focus for traders when trying to decipher central bank policies (in that order). Yet flash PMIs are a great complement, as the surveys provide a forward look at growth expectations, inflationary pressures and employment trends. And with traders obsessed with if, when and when cuts could arrive, they’ll likely want to short any currency that shows weaker growth potential, employment and lower inflationary pressures present within the flash PMI report. Thursday is a big day for PMI surveys as we'll see reports for the UK, Europe and of course the US.