August 15th Market Overview

August 15th Market Overview (no fluff)

Author

J.L. Bernstein
August 15, 2024

Happy Thursday everyone.

Another beautiful green day…my Paypal and recent DIS entries are looking pretty.

In partnership with no one today again…
Feel free to check out my book on swing trading :-)

Lets dig in…

Executive Summary

  • Market Surge: The Dow pushed over 500 points, and the Nasdaq climbed 2.34% on strong retail sales and jobless claims data.

  • Retail Sales: Retail sales jumped 1% in July, smashing expectations and bolstering the soft landing narrative.

  • Walmart: Walmart stock popped over 7% after beating earnings and hiking full-year guidance, showing consumers are still spending despite headwinds.

  • Broader Market: We’re seeing money flow into a broader range of stocks, hinting at the potential for more upside ahead.

Market Overview

Today’s session saw green across the board. The Dow Jones Industrial Average closed up 509 points (1.28%), while the S&P 500 gained 1.58%, notching its sixth straight win. The Nasdaq Composite led the charge, jumping 2.34%. Investors are buying into a more optimistic economic outlook, shaking off recent recession fears.

Key Market Drivers

  • Jobless Claims & Retail Sales: Jobless claims fell, and retail sales exceeded expectations, giving the soft landing scenario more credence. July’s retail numbers showed a solid 1% uptick, blowing past the 0.3% forecast. This data is forcing a rethink of the economic picture, suggesting more resilience than many had given credit for.

  • Inflation Reports: Earlier this week’s tamer inflation reports are also fueling the rally, with some traders now betting the Fed might ease off the brake pedal sooner than expected.

Stock Spotlight

  • Walmart (WMT): Shares rocketed 7%+ after crushing earnings estimates. The retail giant hiked its full-year guidance, though it’s keeping a wary eye on the back half of the year.

  • Cisco Systems (CSCO): Stock popped more than 8% on strong fiscal Q4 numbers and plans to trim its workforce for better efficiency.

  • Ulta Beauty (ULTA): Jumped about 11% as news broke of a fresh Berkshire Hathaway stake, underscoring the company’s solid market position.

  • Nike (NKE): Climbed roughly 4% after Bill Ackman’s Pershing Square Capital Management revealed a new position, highlighting the brand’s staying power.

  • Small-Caps: Outpaced the big boys today, with the Russell 2000 up nearly 2.8% by mid-session, signaling investors’ growing risk appetite.

Other Magnificent 7 Updates

Health Care stocks hit fresh all-time highs, though biotech continues to lag the broader sector.

Other Notable Company News

  • Trian Fund Management: Scooped up an $80 million stake in U-Haul Holding, sending shares up over 2%. Activist investors seem to be back on the prowl.

  • Morgan Stanley on Boeing: Playing it cool on Boeing, sticking with an equal-weight rating but eyeing a potential bullish setup next quarter amid choppy trading.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

+3.37%

Consumer Staples

XLP

+1.08%

Energy

XLE

+0.86%

Financials

XLF

+1.71%

Health

XLV

+0.47%

Industrials

XLI

+1.39%

Materials

XLB

+1.65%

Real Estate

XLR

-0.06%

Technology

XLK

+2.42%

Communication Services

XLC

+0.92%

Utilities

XLU

+0.12%

Bond Market

Bonds are reacting to the upbeat economic data, with yields holding relatively steady. Traders are re-calibrating their Fed rate cut expectations, with current bets leaning towards a modest 25-basis point cut as the economy showcases its resilience.

Policy Watch

With retail sales coming in hot, all eyes are on the Fed’s September meeting. Current sentiment is leaning towards a modest 25-basis point cut rather than anything more aggressive, as policymakers likely prefer a measured approach given the economy’s apparent strength.

No sponsors today but feel free to check out my book on swing trading :-)

- JB

Note: This newsletter is intended for informational purposes only.