August 22nd Market Overview

August 22nd Market Overview (No Fluff)

Author

J.L. Bernstein
August 22, 2024

Happy Thursday everyone. Sorry about the late letter, I got caught up with other stuff but on the positive note I had more info to work with while drafting this after market close!

Lets dig in…

Executive Summary

  • U.S. stocks retreat as Treasury yields climb ahead of Powell’s Jackson Hole speech

  • Tech sector leads market losses, with Nasdaq sliding 1.67%

  • Peloton surges 33% on first sales increase in nine quarters, while Snowflake tumbles 14.7% despite beating expectations

Market Overview

We’re seeing a pullback in stocks today as investors brace for the Feds Jerome Powell’s upcoming speech at Jackson Hole. The S&P 500 slipped 0.89% to 5,570.64, while the Dow fell 0.43% to 40,712.78. The Nasdaq was the brunt of the decline, down 1.67% to close at 17,619.35. Despite today’s losses, the Dow and S&P 500 are still managing small gains for the week.

Key Market Drivers

  1. Rising bond yields: The 10-year U.S. Treasury yield climbed nearly 9 basis points to 3.863%, putting pressure on stocks and raising concerns about future corporate profits.

  2. Tech sector weakness: Information technology led the S&P 500 lower with a slide of more than 2%, as high-profile names like Intel and Snowflake faced significant declines.

  3. Anticipation of Powell’s speech: Traders are looking for insights into future rate policy at the Jackson Hole Economic Symposium, with expectations leaning towards a potential rate cut next month.

Stock Spotlight

  1. Peloton (PTON): Shares skyrocketed 33%, heading for its best day on record after reporting its first sales increase in nine quarters.

  2. Snowflake (SNOW): Shares tumbled 14.7% despite beating quarterly expectations, as rising costs impacted operating margins.

  3. Urban Outfitters (URBN): The stock sank 9.6% following disappointing second-quarter same-store sales figures, which declined 9.3%.

  4. Zoom Video (ZM): The stock advanced 13% after reporting strong second-quarter results, though the company also announced its CFO’s departure.

  5. Intel (INTC): Shares dropped 4.8%, contributing significantly to the tech sector’s decline.

Other Magnificent 7 Updates

  • Tesla (TSLA): Shares dropped 4.5%, contributing to the consumer discretionary sector’s decline.

  • Nvidia (NVDA): Decreased over 1%, alongside other semiconductor stocks, adding to the tech sector’s woes.

Other Notable Company News

  • Advance Auto Parts (AAP): Shares plummeted over 11% after a significant earnings miss and guidance cut.

  • Deutsche Bank (DB): Gained more than 2% following the announcement of a legal settlement.

Sector Watch

Sector

Symbol

% Change

Consumer Discretionary

XLY

-1.87%

Consumer Staples

XLP

-0.11%

Energy

XLE

+0.32%

Financials

XLF

+0.48%

Healthcare

XLV

-0.02%

Industrials

XLI

-0.18%

Materials

XLB

-0.24%

Real Estate

XLRE

+0.56%

Technology

XLK

-2.13%

Communication Services

XLC

-0.93%

Utilities

XLU

-0.17%

Bond Market

Significant movement in the bond market today, with the 10-year U.S. Treasury yield rising nearly 9 basis points to 3.863%. This push in yields is contributing to the downward pressure on stocks, particularly in the tech sector.

Policy Watch

All eyes are on Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium on Friday. Traders are unanimous in expecting a decrease in borrowing costs next month, but are divided over whether the reduction will be a quarter or half a percentage point. Current forecasts suggest a potential cut of 25 basis points, though this remains contingent on forthcoming economic data.

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

Please consider clicking through and checking out sponsors even if you don’t think you want to buy or subscribe from them :-)

- JB

Today’s Sponsor - click that puppy and take the quiz for a remote advisor!

Invest Confidently With A Trusted Advisor

Feeling uncertain about the stock market in 2024? Take our online quiz to find a trusted fiduciary financial advisor who can ease your nerves and guide you through market fluctuations. We compare 2024's Top Financial Advisors & CFPs based on rigorous criteria: credentials, client reviews, and experience. Whether you're new to investing or a seasoned investor, expert advice can make all the difference. Don't navigate market uncertainty alone. Start your journey to financial confidence today!

Note: This newsletter is intended for informational purposes only.