Bloomberg Daybreak Weekend: US Economic Data, Nvidia Earnings, Poland Election, South Korea's BOK

US Economic Outlook

• 📉 The second read on Q1 US GDP is expected to show a modest upward revision, potentially to around 0%, but still indicating soft growth.
• ⚠️ While trade deficits may have been offset by domestic components, the underlying demand for foreign goods was higher than domestic production.
• 📈 April's Personal Consumption Expenditures (PCE) price index is anticipated to show a 0.1% rise in core PCE, but underlying details suggest rising goods prices and falling services prices (excluding housing) due to stock market retreats.
• 💡 The recent rebound in markets will likely cause services prices to increase in the coming months, potentially foreshadowing higher inflation.

Nvidia Earnings Preview

• 🚀 Despite significant headwinds like export restrictions to China and a stock price decline, Nvidia is expected to deliver strong earnings and guidance.
• 💰 A one-time charge of up to $5.5 billion due to export restrictions is factored in, but non-GAAP numbers are expected to remain robust.
• 🇨🇳 Nvidia is developing a new China-compliant chip variant, aiming to recover lost revenue in the second half of the year.
• 🔗 The company is opening its NVLink connectivity system to the broader semiconductor industry, reducing concerns about proprietary systems and vendor lock-in.

Poland's Presidential Election

• 🗳️ Poland is heading for a presidential runoff election on June 1st, a critical moment for its political stability and relationship with the EU.
• 🇪🇺 Prime Minister Donald Tusk's pro-EU coalition is vying for influence, with his candidate, Warsaw Mayor Rafael Chazovski, facing off against conservative rival Karol Navroski.
• ⚖️ The election outcome will impact Poland's domestic legislation, its role in European security, and its ability to align with EU decisions.
• 🤝 The election is seen as a test for liberal Europe, with stakes including increased EU cooperation on defense versus a halt to further integration.

South Korea's Economic Challenges and BOK Decision

• 📉 South Korea's economy is under strain due to political instability, US tariffs, and slowing growth momentum, impacting exports, particularly vehicles.
• 📈 While semiconductor sales saw a jump, the overall export outlook remains shaky, with potential tariffs on semiconductors posing a future risk.
• 🏦 The Korean Won has faced depreciation pressure but is showing slight gains, while inflation has remained relatively stable due to weak domestic demand.
• 💰 The Bank of Korea is expected to cut interest rates by 25 basis points to boost the economy, balancing inflation concerns with the need for growth support.

Global Investment Strategy

• 🌍 Investors are navigating high policy uncertainty and market volatility, with a focus on scenarios beyond US exceptionalism.
• 💡 Opportunities are emerging in India's fixed income and China's stock markets, as global investors look beyond dominant US market narratives.
• ⏳ A longer-term investment horizon, focusing on themes in Europe and Asia, is advised over short-term market fluctuations.