Global Highlights for This Week : April CPI to Set Tone for Fed’s "Warsh Era"; AI Chip Star Prepares for Debut
In the week just passed, global capital markets remained largely unfazed despite the continued blockage of the Strait of Hormuz and the volatile news cycle—oscillating between skirmishes and rumors of a "near-deal on a ceasefire memorandum."
Several major global benchmarks continued to notch fresh record highs.
This week is expected to follow a similar pattern: markets will remain on high alert for unpredictable geopolitical shifts while bracing for a resonance between macro data and the "AI trade."
On the macro front, the core focus of the week is U.S. inflation data. Investors are closely monitoring how the energy price surge triggered by the Iran conflict is impacting consumer prices and retail sales.
Economists currently anticipate the April CPI will rise a further 0.6%, following a staggering 0.9% month-on-month jump in March.
Since the outbreak of hostilities involving the U.S. and Israel against Iran in late February, U.S. gasoline prices have surged 50%, breaking the $4.50 per gallon mark last week.
A key observation point for the inflation data will be whether this rapid rise in fuel costs is being passed on by corporations through higher prices for goods and services.
As inflation trends upward, the Federal Reserve also faces a landmark leadership transition this week.
The U.S. Senate is scheduled to vote this Monday (May 11) on a "cloture" motion to end debate on the nomination of Kevin Warsh as the 17th Chair of the Federal Reserve.
Following this step, the Senate will set a date for the final confirmation vote. For context, Jerome Powell’s term is set to expire on May 15.
However, due to ongoing criminal investigations at the White House, Powell will remain on the Board of Governors, where he could theoretically stay until early 2028.
Given the upcoming April CPI print, the broader inflation outlook, and the status of the Strait of Hormuz, expectations for a Fed rate cut this year are becoming increasingly remote.
Goldman Sachs economists, in a report dated May 8, pushed back their expectations for the next two rate cuts by one quarter each—to December 2026 and March 2027, respectively—citing stickier inflation.
They also project that core PCE inflation will finish the year closer to 3%, well above the Fed's 2% target.
Meanwhile, following heavy losses for the UK Labour Party in weekend local elections, the British pound and gilts may see volatility as news filters out of 10 Downing Street this Monday.
On the corporate front, the spotlight shifts to Asian tech giants, with Tencent, Alibaba, JD.com, SoftBank, and the high-flying memory stock Kioxia all set to release earnings.
The U.S. market will also host the year's largest IPO (ahead of the anticipated SpaceX listing). According to market sources, Cerebras Systems, renowned for its wafer-scale AI chips, is slated to debut this Thursday.
The company’s WSE-3 chip is a behemoth, featuring a surface area of 46,225 $mm^2$ (56 times that of Nvidia’s B200), with on-chip SRAM 250 times larger and memory bandwidth 2,625 times higher than the B200.
Due to explosive demand, the latest reports suggest the company may raise its price range from $115–$125 to $125–$135 per share. Based on a 28-million-share offering, the capital raise could reach $3.78 billion.
This Friday also marks the deadline for institutional investors to disclose their U.S. holdings for the quarter ending March 31 (13F filings). Investors will be closely watching the filings from high-profile figures such as Duan Yongping and Li Lu, as well as the newly led Berkshire Hathaway.
Rumors have circulated that under new CEO Greg Abel, Berkshire may have liquidated the approximately $15 billion portfolio previously managed by investment manager Todd Combs.
During the Buffett era, Combs and Ted Weschler jointly managed about 10% of Berkshire’s equity holdings, with Buffett overseeing the remaining 90%.
Key Economic Events This Week
Monday (May 11): China April CPI; U.S. April Existing Home Sales; U.S. Treasury Secretary Bessent visits Japan.
Tuesday (May 12): Eurozone May ZEW Economic Sentiment; U.S. April CPI; BoJ summary of opinions from the April policy meeting.
Wednesday (May 13): Eurozone Q1 GDP (Revised); U.S. April PPI.
Thursday (May 14): U.S. April Retail Sales.
Friday (May 15): U.S. May NY Fed Empire State Manufacturing Index.