August 21st Market Overview

August 21st Market Overview: Fed Minutes, Target's Surge, and a revision of payroll growth reports

Author

J.L. Bernstein
August 21, 2024

In partnership with

Happy Wednesday everyone. I love this healthy consolidation after recent momentum. To me this signals a healthy bullish market environment.

Lets dig in…

Executive Summary

  • S&P 500 rises 0.3% after Fed minutes signal likely September rate cut

  • Target shares surge 13% on strong Q2 earnings beat

  • Labor Department revises down nonfarm payroll growth by 818,000 jobs

Market Overview

We’re seeing positive momentum today, with the S&P 500 and Nasdaq up 0.3% and 0.4% respectively. The Dow has added 32 points, or 0.1%. This uptick follows the Feds meeting minutes release, reinforcing expectations for lower rates soon.

Key Market Drivers

  1. Fed minutes indicating a likely September rate cut

  2. Significant downward revision of nonfarm payroll growth

  3. Strong earnings reports from major retailers

Stock Spotlight

  1. Target (TGT): Up 13% after Q2 earnings of $2.57 per share beat $2.18 estimate

  2. TJX Companies (TJX): Hit all-time high, up 6% on strong earnings

  3. Keysight Technologies (KEYS): Surged 11%, best day since March 2020

  4. Macy’s (M): Down 12% despite earnings beat, cut full-year outlook

Other Magnificent 7 Updates

Amazon (AMZN): NYU’s Damodaran suggests it’s a “better buy” than Nvidia based on earnings and cash flows.

Other Notable Company News

  • Ford (F): Up 1% premarket on EV strategy shift

  • JD.com (JD): Down 5% as Walmart sells stake

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

+0.98%

Consumer Staples

XLP

+0.47%

Energy

XLE

+0.12%

Financials

XLF

-0.36%

Healthcare

XLV

+0.10%

Industrials

XLI

+0.48%

Materials

XLB

+1.01%

Real Estate

XLRE

+0.22%

Technology

XLK

+0.03%

Communication Services

XLC

-0.16%

Utilities

XLU

+0.63%

Bond Market

Bond yields may be influenced by the Fed’s signals of a potential rate cut in September.

Policy Watch

Fed officials are moving closer to a rate cut, likely in September. The majority view a 25 basis point reduction as appropriate if data aligns with expectations. Markets are pricing in a 100% chance of a cut, per CME Group’s FedWatch tool.

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.