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Day Ahead: Top 3 Things to Watch

Published 11/13/2019, 03:44 PM
Updated 11/13/2019, 05:16 PM
© Reuters.

Investing.com -- Here's a preview of the three things that could rock markets tomorrow.

1. Wholesale Inflation; Powell Returns

A day after data showed the pace of consumer prices accelerated last month, the Labor Department will issue the producer price index (PPI) report at 8:30 AM ET (12:30 GMT).

On average, economists expect the PPI rose 0.3% in October, compared with a 0.3% decline in the prior month.

The core PPI, which excludes volatile food and energy prices, is forecast to have risen to 0.2%, from a 0.3% decline a month earlier, according to forecasts compiled by Investing.com.

That would bring year-over-year PPI growth to 0.9%, down from 1.4%, and core PPI growth up 1.5%, down from 2%.

The PPI is considered a leading indicator, measuring the input prices for goods sold at a retail level.

U.S. Federal Reserve Chairman Jerome Powell, meanwhile, will testify on the economy before the House Committee on the Budget at 10:00 AM ET (15:00 GMT). But the Fed chief's appearance is not expected to stray too much away from his comments on Wednesday when he reiterated that the U.S. central bank's current stance on monetary policy was appropriate as the U.S. economy remains in good shape.

2. U.S. Crude Oil Inventories Set for Another Build

The Energy Information Administration (EIA) petroleum report is due Thursday, with analysts keen to see whether domestic crude stockpiles will stage another build for the third-straight week.

The EIA is expected to report a build in stockpiles of 1.65 million barrels for the week ended Nov. 8.

Crude oil futures rose 0.6% to settle at $57.17 a barrel, though some weakness was seen in late in the session on reports that U.S.-China trade talks had hit a snag.

Ahead of the EIA report, the American Petroleum Institute released data, which, while not perfectly correlated with the EIA's report, showed weekly crude stockpiles fell by 0.5 million barrels last week.

3. Nvidia, Walmart Earnings in Focus

Walmart (NYSE:WMT) reports fiscal third-quarter earnings Thursday before the opening bell, with many optimistic that the low-cost chain's efforts to improve its digital offerings will bolster growth.

Walmart management guided U.S. same-store sales growth toward the upper end of 2.5% to 3% range and forecast U.S. e-commerce sales to expand about 35%

The retailer is expected to report earnings of $1.09 per share on revenue of $128.57 billion. A year ago, Walmart (NYSE:WMT) said it earned $1.08 a share on revenue of $125.42 billion. Shares are up 29.9% this year after falling 5.67% in 2018.

Nvidia (NASDAQ:NVDA), meanwhile, will report earnings after the market closes.

Sentiment on the graphics chipmaker has turned more positive recently on signs spending on data center, a segment making up more than a quarter of total revenue, has returned.

Intel (NASDAQ:INTC) reported in late October that data center came back much more strongly than anticipated.

Nvidia's gaming sector will likely get a boost from strong sales for the Nintendo videogame console, which includes Nvidia-made GPU chips. Nintendo's Switch has been the top-selling video game console in U.S. for 10 months now, according to the NPD Group, a market research company.

With most of the "goodness" already baked into shares of Nvidia, the potential for a significant run higher on the back of solid quarterly results is limited, according to Deutsche analyst Ross Seymore.

As well as earnings, guidance will also be closely watched as many are optimistic that the launch of new products next year will drive growth.

Nvidia is expected to report earnings of $1.58 a share on revenue of $2.92 billion. A year ago, the company earned $1.97 on $3.18 billion in sales. Shares are up 56% this year after falling 30.85% in 2018.

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