August 19th Market Overview

August 19th Market Overview (no fluff)

Author

J.L. Bernstein
August 19, 2024

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Happy Monday everyone, how long is this green streak going to last?

I’d imagine a decent red day coming up tomorrow or Wednesday but looks like a full V bottom recover is happening before our eyes. I expect more volatility as U.S. election dates approach.

Lets dig in…

Executive Summary

  • S&P 500 and Nasdaq on track for eighth straight winning day

  • Stocks build on recent rally ahead of Fed symposium

  • AMD announces $4.9 billion acquisition of ZT Systems

Market Overview

We’re seeing continued momentum in the market today. The Dow is up 0.4%, while the S&P 500 and Nasdaq have risen 0.6% and 0.9% respectively. This marks an extension of last week’s rally, which was the best for the S&P 500 this year with a gain of nearly 4%.

Key Market Drivers

  1. Federal Reserve Symposium: Investors are eagerly awaiting insights from Fed Chair Jerome Powell’s speech at Jackson Hole on Friday.

  2. Economic Data: Recent positive data on retail sales, jobless claims, and inflation have boosted hopes for a soft landing scenario.

  3. Corporate Earnings: Strong earnings reports, particularly from retailers like Walmart, have supported market sentiment.

Stock Spotlight

  1. Advanced Micro Devices (AMD): Shares up 2% on news of $4.9 billion acquisition of server builder ZT Systems.

  2. Berkshire Hathaway (BRK.B): Class B shares hit an all-time high, reflecting strong financial performance and strategic asset management.

  3. Zim Integrated (ZIM): Stock soared nearly 24% after raising full-year guidance and reporting strong Q2 revenue.

  4. Estée Lauder (EL): Shares down 4% following a disappointing Q1 earnings and full-year outlook.

Other Magnificent 7 Updates

  • Nvidia (NVDA): Robust performance with shares up 27% over the last eight sessions, demonstrating strong market momentum.

  • Apple (AAPL): Berkshire Hathaway reduced its stake in the tech giant during Q2.

Other Notable Company News

  • HP (HPQ): Shares slid over 3% after Morgan Stanley downgraded the stock to equal weight from overweight.

  • Dutch Bros (BROS): Stock down nearly 4% following a downgrade to neutral by Piper Sandler.

  • Sweetgreen (SG): Shares dropped 6% after Piper Sandler downgraded the stock to neutral from overweight.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

+0.93%

Consumer Staples

XLP

+0.31%

Energy

XLE

+0.42%

Financials

XLF

+0.48%

Healthcare

XLV

+0.49%

Industrials

XLI

+0.44%

Materials

XLB

+0.38%

Real Estate

XLRE

+0.44%

Technology

XLK

+0.91%

Communication Services

XLC

+0.99%

Utilities

XLU

+0.46%

Bond Market

Bond market is anticipated to see rising yields ahead of the Fed’s September policy meeting. Analysts expect two rate cuts this year, with the first likely in September.

Policy Watch

Goldman Sachs has lowered its U.S. recession probability forecast to 20% from 25%, reflecting improved economic optimism and recent positive data trends (an massive gains last week).

P.S. Any “clicks” to our sponsor allows me to drink good coffee in the morning.
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- JB

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Note: This newsletter is intended for informational purposes only.