The Week Ahead: US inflation, Walmart earnings, UK growth

With the May central bank rate decisions and peak earnings season now behind us, traders’ attention turns to economic data in the week ahead. Key releases in the US include April inflation data in the form of the consumer price index (CPI) on Tuesday and the producer price index (PPI) on Thursday. In the UK, the spotlight will shine on the Labour government’s economic growth agenda with the release of first-quarter gross domestic product (GDP) figures on Thursday. On the corporate front, a few notable earnings reports are still to be published, with Walmart due to announce its Q1 results on Thursday. 

US April CPI

Tuesday 13 May 
Analysts estimate that consumer prices increased 0.3% month-on-month in April, up from a decrease of 0.1% in March. The annual rate of inflation is expected to have risen to 2.6%, up from 2.4% in March. Meanwhile, core CPI – which strips out volatile food and energy prices – is forecast to come in at 0.3% on a monthly basis, up from 0.1% in March. Lower-than-expected inflation might ease market concerns over the US economy, while higher-than-expected readings could add to fears of ‘stagflation’ – a period of stagnant growth and rising inflation. 

This inflation report is likely to be analysed for clues about the potential impact of Donald Trump’s tariffs, though the knock-on effects of higher import costs may take more time to kick in. The inflationary impact of the levies could start to show up in the May CPI data, or perhaps in the April import and export price index readings due out on Friday 16 May. 

The April CPI data could affect the US dollar, which has weakened against other major currencies since Trump’s tariff announcement on 2 April but has shown signs of life in recent days. The euro-dollar pair, trading at around $1.1250 on 9 May, is one to watch. The line in the sand for EUR/USD is $1.12. If that support level breaks on lower-than-expected US CPI data, the pair could sink back to $1.09. However, higher-than-expected CPI figures could weaken the dollar, potentially sending EUR/USD towards $1.13 and signalling US stagflation. Resistance is at $1.1480.

Walmart Q1 earnings

Thursday 15 May
Walmart, the world’s largest retailer by revenue, is expected to report first-quarter earnings of $0.58 a share, a decline of 4% versus the year-ago period, while revenue is projected to rise by 2.7% year-on-year to $165.8bn, according to consensus estimates. Looking ahead, analysts see revenue growing 3.5% to $175.1bn in Q2, with earnings increasing 5% to $0.70 a share. The options market suggests that shares of Walmart – up 9.7% since 1 April at $97.43, as of Thursday’s close – could move about 4.5% higher or lower after the Q1 results.

Options positioning on Walmart is bullish, with a significant amount of positive delta. That said, there is a large concentration of gamma around $100, suggesting that if the stock fails to breach $100 post-earnings, it may turn lower. Shares of the Dow Jones-listed company have retraced 78.6% of their decline from the February highs, stalling at resistance near current levels, and have broken an uptrend. If the stock falls below support around $95, it could plunge to the next support zone at $90.50 soon after. However, if the shares clear $100 in the near term, there is a gap to be filled near $104.50. 

UK Q1 GDP

Thursday 15 May 
UK economic growth slowed to 0.9% year-on-year in the first three months of 2025, down from 1.5% in the final quarter of 2024, based on analysts’ estimates. The UK’s sluggish growth and the soaring interest rate on 30-year gilts – which translates to rising long-term government borrowing costs – paint a picture of stagflation for the British economy. 

Still, the FTSE 100 does not appear to have been adversely affected. Instead, the UK’s leading share index has powered higher though its progress has recently stalled at the resistance level of 8,640. This is why the upcoming GDP report could be significant – a reading at or below expectations could trigger a slowdown or reversal for the FTSE 100.

The FTSE 100 has bounced back from its recent dip, retracing 78.6% of its decline from the March high. However, the footsie has also broken below an uptrend (the red diagonal, below), suggesting that the index may be about to give back some of its recent gains. That could see the index slip back towards support near 8,400.

Economic and company events calendar

Major upcoming economic announcements and scheduled US and UK company reports include:

Monday 12 May

• UK: April British Retail Consortium like-for-like retail sales
• US: April monthly budget statement
• Results: Fox Corp. (Q3)

Tuesday 13 May

• Australia: May Westpac consumer confidence survey 
• UK: March unemployment rate and employment change, April claimant count change
• US: April CPI
• Results: JD.com (Q1), Nu Holdings (Q1), On Holding (Q1), Sea Limited (Q1), Tencent Music Entertainment (Q1)

Wednesday 14 May

• Australia: Q1 wage price index
• Germany: April harmonised CPI
• Results: Burberry (FY), Cisco Systems (Q3), Dynatrace (Q4)

Thursday 15 May

• Australia: April unemployment rate and employment change, May consumer inflation expectations
• Eurozone: Q1 gross domestic product (GDP)
• France: April CPI
• Japan: Q1 GDP
• UK: Q1 GDP
• US: April producer price index (PPI), April retail sales, weekly initial jobless claims 
• Results: 3i Group (FY), Alibaba (FY), Applied Materials (Q2), Birkenstock (Q2), Deere & Co. (Q2), National Grid (FY), NetEase (Q1), Premier Foods (FY), United Utilities (FY), Walmart (Q1)

Friday 16 May

• New Zealand: Q2 Reserve Bank of New Zealand inflation expectations
• US: April import and export price indices, May Michigan consumer sentiment index
• Results: Land Securities (FY), RBC Bearings (Q4)

Note: While we check all dates carefully to ensure that they are correct at the time of writing, the above announcements are subject to change.

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