5 Things You Need to Know to Start Your Day: Americas

Good morning. The world waits for Nvidia earnings, traders get another nasty inflation shock and there’s trouble for car makers in Europe. H [View in browser]( [Bloomberg]( Good morning. The world waits for Nvidia earnings, traders get another nasty inflation shock and there’s trouble for car makers in Europe. Here’s what’s moving markets.. — [David Goodman]( Want to receive this newsletter in Spanish? [Sign up to get the Five Things: Spanish Edition newsletter](. Nvidia earnings Nvidia, [memorably dubbed the world’s most important stock]( during the last earnings season, is due to report its latest results after market close. It’s projected to report a 243% gain in revenue, according to Wall Street estimates, but a 90% year-to-date share rally means it could struggle to match sky-high expectations. Ahead of the results, which Bloomberg’s John Authers says have an [unhealthy hold](over the market, [US equity futures](bbg://screens/%7BNSN%20SDVLGEDWX2PS%20%3CGO%3E%7D)were little changed after the S&P 500 hit yet another record high Tuesday. Sticky inflation Global investors got another reminder of the perils of betting on a rapid decline in inflation on Wednesday, as the UK’s[ slowdown in price gains]( wasn’t quite as fast as economists predicted. The small headline miss — a drop to 2.3% rather than the predicted 2.1% — plus a stubbornly high services reading, sparked a pretty large market reaction. That was felt most keenly in the UK, where investors have all but abandoned hopes of a June rate cut from the BOE, but [spilled over into moves lower](in US Treasuries and German bunds, as well as European stocks, China warning Equities in Europe were also hurt by China’s signal that [it’s ready to unleash tariffs as high as 25%](on imported cars with large engines. The China Chamber of Commerce to the EU said it was informed about the potential move by “insiders,” and the levies would affect European and US carmakers and have a “significant” impact on relations with the EU. Shares of European carmakers that stand to be most affected by a potential tariff include Mercedes-Benz and BMW; they fell more than 2% in early trading. Tesla troubles Meanwhile, Tesla got a [sluggish start](to the second quarter in Europe, thwarting Chief Executive Officer Elon Musk’s hopes for a much better showing than the first few months of the year. The carmaker registered just 13,951 vehicles in April, the European Automobile Manufacturers’ Association said Wednesday, down 2.3% from a year ago and its worst tally since January 2023. Coming up Before the Nvidia results, the trading day in the US might be dominated by the Federal Reserve. Two officials -- including Susan Collins and Loretta Mester — last night [reinforced a higher-for-longer message]( on interest rates. Austan Goolsbee is due to make appearances later. Then the central bank will release minutes of its May decision at 2 p.m. New York time. What we’ve been reading This is what’s caught our eye over the past 24 hours. - [Morgan Stanley was ‘angry’](as Archegos fell, witness says. - New Zealand now sees cash rate cuts [starting later next year.]( - Citi fined £62 million [after fat-finger trade]( caused flash crash. - Barclays weighing[five days in office]( for more US staff - [End of China’s golden age]( risks political peril for Xi. And finally, here's what Joe’s interested in this morning Despite the election in less than six months, there's not actually a ton of evidence that the market cares very much. Actually there's not much evidence that the general public cares very much, but that's a different question. You might think Trump's promise of more tariffs or the politicization of EVs would show up in some obvious concrete way. But for the most part... there's not that much. That being said, it's possible that crypto is emerging as a dial, so to speak, on the election. Trump has been doing a ton of crypto talk lately. A [POLITICO article]( from earlier this month talks about Trump's appeal to crypto voters, as one of his tactics against Biden. Trump says he'll [accept donations]( in Bitcoin, Ethereum, and Doge. Anyway, amidst all this, crypto prices are surging again, with Bitcoin back above $70,000 at the time I'm typing this. Now, maybe there's a Trump effect. But this is confounded by the fact that optimism over a spot Ethereum ETF [is on the rise right now](. Also risk assets have been on a tear. That chart of Bitcoin looks a lot like the QQQ ETF. Still, I think it's something to watch. Trump is talking crypto and crypto people (at least some) seem to like Trump. It's not implausible that people might bet that the coins would do better under a Trump administration. All that being said, again, there's really no evidence right now that this is a Trump thing. The rally in stocks is probably the story. Also betting on election trades is just a dicey thing. Remember at this time in 2016, we were talking about how the way to trade Trump was to short the Mexican peso, and well, the Mexican peso has done great since 2016. Or like, most people probably wouldn't have said that oil company stocks would be big winners since Biden was elected. The XLE ETF is up over 200% since November 2020. Maybe the test will be if/when there's some divergence. Like if at some point over the summer, stocks swoon but coins are up, that might be a tell. It's just one scenario to watch, but maybe a scenario worth keeping on the radar. Joe Weisenthal is the co-host of Bloomberg’s Odd Lots podcast. Follow him on X [@TheStalwart]( Like Bloomberg's Five Things? [Subscribe for unlimited access]( to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. [Bloomberg Markets Wrap: The latest on what's moving global markets. Tap to read.]( Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Five Things to Start Your Day: Americas Edition newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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