August 12th Market Overview

August 12th Market Overview (no fluff)

Author

J.L. Bernstein
August 12, 2024

In partnership with

Happy Monday everyone, keeping it simple today.

Lets dig in…

Executive Summary

  1. Market volatility persists, with stocks seesawing but maintaining momentum from last week.

  2. The market awaits crucial inflation data, particularly Wednesday’s CPI report.

  3. Nvidia leads tech sector gains, rising 4% and bolstering the Nasdaq Composite.

Market Overview

Today’s trading session saw fluctuations between going red and green. The S&P 500 closed down 0.1%, while the Nasdaq pushed up 0.06%, driven by Nvidia’s performance. The Dow declined by 211 points or 0.5%.

Key Market Drivers

  1. Anticipation of July’s CPI and PPI reports, critical for assessing economic health.

  2. Geopolitical tensions in the Middle East, pushing U.S. crude oil futures up nearly 3%.

  3. Continued influence of mega-cap technology stocks on broader market movements.

Stock Spotlight

  1. Nvidia (NVDA): Gained 4%, with analysts projecting a potential rise to $120 in the near term.

  2. KeyCorp (KEY): Rose 13% following Bank of Nova Scotia’s minority stake acquisition.

  3. JetBlue Airways (JBLU): Declined 13% after announcing a $400 million convertible senior notes offering.

  4. Marathon Digital Holdings (MARA): Fell 8% on news of a $250 million convertible senior notes proposal.

  5. Hawaiian Electric Industries (HE): Dropped 16% after reporting a significant Q2 loss.

Other Magnificent 7 Updates

Nvidia (NVDA): Continues to outperform, focusing investor attention on its upcoming Q2 earnings report on August 28.

Other Notable Company News

  1. Starbucks (SBUX): Shares increased 2.6% premarket following Starboard Value’s stake acquisition.

  2. Communication Services Sector: Wells Fargo’s Chris Harvey highlights strong opportunities, citing favorable valuations and outlook.

  3. Utilities Sector: Morgan Stanley’s Aaron Dunn anticipates increased demand, driven by rising electricity consumption.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

-0.36%

Consumer Staples

XLP

-0.50%

Energy

XLE

+0.49%

Financials

XLF

-0.49%

Health Care

XLV

-0.39%

Industrials

XLI

-0.50%

Materials

XLB

-0.43%

Real Estate

XLRE

-0.64%

Technology

XLK

+0.92%

Communication Services

XLC

-0.62%

Utilities

XLU

+0.16%

Bond Market

Yields remain a focus ahead of key inflation data, potentially influencing Federal Reserve policies. More on bond market later this week.

Policy Watch

  • Federal Reserve Outlook: UBS projects a potential 100 basis points rate cut by year-end, influenced by cooling inflation expectations.

  • Budget Deficit: The federal deficit has exceeded $1.5 trillion for the year, exacerbated by rising Medicare expenses and high interest rates.

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- JB

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Note: This newsletter is intended for informational purposes only.