August 29th Market Overview

Happy Thursday everyone.

NVDA had “good” earnings but the market did not react well. This is a great example of how earnings reports are risky and extremely hard to manage a trade through. Even if good or bad earnings happen it doesn’t matter - what matters is how the market reacts to those earnings.

When working at a Wall Street trade desk as a licensed trader… we were NEVER allowed to hold through an ER, we were only allowed to react to it. The firm was focused on HFT strategies and not really long term trades, however.

Anyways enough of my earnings rant.

Lets dig in…

Executive Summary

• Dow Jones reaches record high, up 346 points or 0.8%

• Nvidia falls 6% despite strong earnings, highlighting shifting market expectations

• Economic data shows 3% GDP growth in Q2, surpassing expectations and easing recession fears

• Dollar General plummets nearly 30% on lowered guidance, reflecting challenges for low-income consumers

Market Overview

We’re seeing a mixed but generally positive performance in the markets today. The Dow is leading the charge, rising 0.8% to a record high. The S&P 500 is up 0.3%, while the Nasdaq has inched 0.1% higher. This comes despite a significant drop in Nvidia’s stock price, demonstrating market resilience imo.

Key Market Drivers

• Strong economic data: Q2 GDP growth revised up to 3% from 2.8%

• Weekly jobless claims fell, further easing recession concerns

• Mixed earnings reports, with some beats not guaranteeing stock rallies

• Sector strength in industrials, communications, and consumer discretionary

Stock Spotlight

1. Nvidia (NVDA): Down 6% despite beating earnings expectations. Revenue grew 122%, but the size of the beat was smaller than previous quarters.

2. Dollar General (DG): Plummeted nearly 30%, heading for its worst day ever after cutting full-year guidance and missing Q2 estimates.

3. Affirm (AFRM): Surged 34% on stronger-than-expected revenue outlook for Q1 fiscal year.

4. Best Buy (BBY): Jumped 15% after raising its earnings outlook for the fiscal year.

5. Berkshire Hathaway (BRK.A): Trading above $700,000, celebrating further growth during Warren Buffett’s 94th birthday week.

Other Magnificent 7 Updates

• Apple (AAPL): Up 2.6%, contributing to the Dow’s record high

• Microsoft (MSFT): Gained 2.3%, also boosting the Dow

• Amazon (AMZN): Trading positively as investors eye long-term growth potential

Other Notable Company News

• Abercrombie & Fitch (ANF): Added to JPMorgan’s ‘Analyst Focus List’, with potential for 40% jump by December 2025

• Birkenstock (BIRK): Down over 16% after missing earnings expectations

• CrowdStrike (CRWD): Fell 2% after cutting annual guidance

Sector Watch

Bond Market

Yields are likely to stay low as economic recovery sustains.

Policy Watch

With expectations building for a potential rate cut in September, all eyes are on how the market will react to forthcoming Federal Reserve decisions. The latest GDP figures and jobless claims could influence future monetary policy shifts, potentially impacting equity performance.

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 - I don’t know anything about them other then they wanted to sponsor the newsletter :-)…check em out and let me know what you think of them.

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Note: This newsletter is intended for informational purposes only.