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- August 28th Market Overview
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Happy Wednesday everyone.
I think we all anticipated a real red day was coming it was just hard to gauge when.
I think part of this red day is de-leveraging risk before NVDA earnings honestly.
Interesting to see how NVDA ER makes the market react in after hours. I think the way the market reacts to NVDA ER will setup tomorrows sentiment. It maybe volatile at first but even price action few hours after report is important imo.
Lets dig in…
Executive Summary
Stocks pulled back as investors braced for Nvidia’s earnings report
Tech sector led the decline, with Nvidia falling nearly 2%
Market volume has remained light ahead of Labor Day weekend
Traders expect a significant move in Nvidia stock post-earnings
Market Overview
We’re seeing a cautious mood in the market today. The Nasdaq fell 1%, while the S&P 500 slipped 0.5%. The Dow lost 180 points, or 0.4%. Trading volume remains light as we approach the Labor Day weekend, setting the stage for potential volatility around key earnings reports.
Key Market Drivers
Nvidia Earnings Anticipation: Closely watching Nvidia’s earnings report, due after market close. The chipmaker’s performance is seen as a gauge for the broader tech and AI trade sustainability.
Economic Uncertainty: Abercrombie & Fitch’s CEO warned of an “increasingly uncertain environment,” suggesting potential challenges in the second half of 2024.
Fed Rate Cut Expectations: Despite short-term market movements, some strategists believe the Federal Reserve will cut rates in September, potentially influencing market sentiment.
Stock Spotlight
Nvidia (NVDA): Shares fell nearly 2% ahead of its crucial earnings report. Options markets imply a potential 10% move post-earnings.
Super Micro Computer (SMCI): The stock plummeted over 25% after delaying its annual 10-K filing, putting it on track for its worst day since 2018.
Li Auto (LI): The Chinese EV maker tumbled around 16% after reporting a significant drop in net income, heading for its worst day since October 2022.
Abercrombie & Fitch (ANF): Despite beating earnings expectations, shares fell 17% due to warnings about an uncertain environment.
Foot Locker (FL): The retailer’s stock dropped over 5% in premarket trading following lackluster Q2 results, despite posting same-store sales growth for the first time in six quarters.
Other Magnificent 7 Updates
Other tech giants also faced pressure today. Amazon, Google, and Microsoft all traded lower, contributing to the overall market decline.
Other Notable Company News
Bank of America (BAC): Warren Buffett’s Berkshire Hathaway continued selling shares, reducing its stake to 11.6%.
Walgreens Boots Alliance (WBA): The only S&P 500 stock to hit a new 52-week low during today’s session.
J.M. Smucker (SJM): Shares slipped about 4% after lowering full-year guidance, despite beating earnings expectations.
Sector Watch
Sector | Symbol | % Change |
|---|---|---|
Consumer Discretionary | XLY | -1.24% |
Consumer Staples | XLP | -0.58% |
Energy | XLE | -0.83% |
Financials | XLF | +0.06% |
Healthcare | XLV | -0.07% |
Industrials | XLI | -0.15% |
Materials | XLB | -0.46% |
Real Estate | XLRE | -0.54% |
Technology | XLK | -1.21% |
Communication Services | XLC | -0.84% |
Utilities | XLU | +0.08% |
Bond Market
No significant bond market updates today.
Policy Watch
The market is anticipating potential Federal Reserve rate cuts in September. Not much new news here…
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- JB
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