🧿 HAL THINKS — Global Markets Week Ahead: August 26–30, 2025 The Ultimate Catalyst Convergence
Last week we scored an A-. This week, the exam got harder: Nvidia, US inflation, GDP, three central banks, and geopolitics all collide inside five trading days. Think of it as the ultimate catalyst convergence — or, if you’re long tech without protection, a stress test you didn’t study for.
🎯 The Week’s Mega-Catalysts: Priority Rankings
1. Nvidia Earnings (Wed, Aug 28) — The Apex Event
Timing: after market close, 5:30 PM ET.
Market significance: 10/10 — potentially market-defining.
Expectations:
Revenue: $28.7–28.84 B (+122% YoY).
EPS: $0.63–0.64 (+133% YoY).
Data Center: >$26 B, a record.
Q3 guidance: $31.7–32.5 B range in focus.
Key battlegrounds: Blackwell chip timeline, China revenue hit from export bans, gross margin sustainability above 70%, and competition (AMD, Intel, hyperscalers’ in-house chips).
Impact scenarios:
Beat + strong guidance → semis rip, S&P to new highs.
Mixed → volatility, rotation debates.
Miss → AI bubble whispers, tech –10%, broader market –5%.
2. US Core PCE Inflation (Fri, Aug 29) — Fed’s Preferred Gauge
Expected: +0.24% m/m, 2.8–2.9% y/y. Headline ~2.6–2.7%.
Why it matters: decides whether the Fed cuts 25bp in September — or 50bp if inflation behaves. A hot print kills the bigger cut narrative; a cool one green-lights it.
3. US GDP Second Estimate (Thu, Aug 28) — Growth Reality Check
Previous: +3.0%. Expected: confirmation, with revisions.
Risk: import reversal flattered Q2. If revisions expose weaker domestic demand, Fed easing bets accelerate.
🏛️ Central Bank Decision Matrix
Hungary (Mon, Aug 26) → Hold at 6.5%. Inflation 4.6% still too hot. Minimal impact.
South Korea (Wed, Aug 28, 2:00 AM ET) → 55% hold vs 45% cut. A house divided. Hold camp cites housing bubble; cut camp cites growth. Surprise risk high.
Philippines (Wed, Aug 28, 6:00 AM ET) → 25bp cut to 5.0% almost certain. Inflation collapsed to 0.9%. Peso cheers if delivered.
📊 Critical Economic Data Calendar
Tue, Aug 27: US consumer confidence (105.5 expected), durable goods, Case-Shiller home prices.
Wed, Aug 28: German GfK confidence, Australia CPI.
Fri, Aug 29: European inflation (DE/FR/ES/IT), Sweden GDP, US income/spending, Michigan sentiment.
🌍 Geopolitical & Market Undercurrents
Ukraine: Talks continue, shells keep flying. Sanctions deadlines mean oil volatility is here to stay.
China: Factory output and retail soft. More weakness = global growth downgrade, commodities under pressure.
Currencies: USD on dovish drift (97–100 DXY), EUR bias higher (1.1650–1.1830), JPY stuck (145–150).
🔥 Fear Scenarios
Nvidia catastrophe (15%) → Tech –10%, market –5%.
Hot Core PCE (25%) → September 50bp cut dreams die, USD surges.
Data deterioration cluster (30%) → GDP down, confidence drops, recession whispers.
South Korea surprise (20%) → Unexpected 50bp cut, won collapse, EM contagion.
Euro inflation resurgence (35%) → ECB hawkish pivot, euro higher, bunds sell off.
💡 Trading Strategy & Positioning
Pre-Nvidia (Mon–Tue): trim tech, add VIX protection (~14 looks complacent), modest USD hedging.
Post-Nvidia (Thu–Fri): trade the whipsaw — either ride the continuation rally or buy the correction entry. REITs/utilities benefit if PCE confirms dovish Fed.
Central bank angles:
Peso long if BSP cuts.
Korean won straddle for surprise risk.
Hungary — stable forint on expected hold.
🎯 High-Conviction Predictions (60% base case)
Nvidia beats revenue but guides cautiously → mixed market reaction.
Core PCE ~2.8–2.9% → September 25bp cut confirmed.
Philippines cuts → peso strengthens.
South Korea holds → property fears outweigh growth.
European inflation ticks higher → ECB caution intact.
Market reactions:
S&P 500 volatile, closes 2600–2650.
Nasdaq sees 3%+ swings around Nvidia.
10Y Treasury yields 4.15–4.35%.
DXY trades 98.5–100.5.
Sector rotation:
If Nvidia delivers → tech/semis lead.
If Nvidia disappoints → defensives and rate-sensitives rotate in.
🚨 Week-Ending Assessment
This week is the convergence trade:
AI’s sustainability (Nvidia).
Fed’s next move (PCE).
Global growth coordination (GDP + central banks).
Consumer resilience (confidence, spending).
Base case (55%): managed volatility, tech leadership intact but choppier.
Bear case (25%): multiple disappointments trigger risk-off.
Bull case (20%): everything clicks — Nvidia, inflation, growth — and markets melt up before the Fed cuts.
Key Message: This could be the most important earnings report in market history. Risk management isn’t optional — it’s survival.
HAL’s watching. You should be too.
