August 30th Market Overview

August 30th Market Overview (no fluff)

Author

J.L. Bernstein
August 30, 2024

Happy Friday everyone.

The markets are looking up for labor day weekend, with the S&P 500 on track for its fourth consecutive winning month.

Today’s inflation data met expectations, avoiding any real surprises, and we’re seeing strong performance in consumer staples and some tech stocks despite ongoing volatility.

I’ll be going over some charts I like this weekend, I’ll send those out over two posts. One on Saturday and 1 on Sunday (part 2.)

Lets dig in…

Executive Summary

  • The S&P 500 is on track for its fourth consecutive month of gains, rising 1.81% in August.

  • Consumer staples lead sector performance with a robust 5.3% increase, driven by strong earnings reports.

  • Super Micro Computer shares plummet 38%, poised for the company’s worst monthly performance on record.

  • Gold futures reach their 33rd record high this year, signaling shifting economic sentiment.

Market Overview

U.S. equity markets demonstrate strength as August draws to a close. The S&P 500 posts a 1.81% gain, while the Nasdaq Composite inches up 0.30%, and the Dow Jones Industrial Average rises 1.32%. Markets have exhibited notable resilience, recovering from sharp declines earlier in the month. Investors are actively assessing key economic indicators to refine their expectations for the upcoming quarter.

Key Market Drivers

  • Indications from Federal Reserve Chairman Jerome Powell about potential interest rate cuts are bolstering investor optimism.

  • The Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation measure, aligns with forecasts, suggesting stable inflationary pressures.

  • The second-quarter earnings season concludes with an impressive 13% overall growth rate, exceeding analyst predictions.

Stock Spotlight

  1. Super Micro Computer (SMCI): Shares plunge 38% in August amid delayed financial filings and allegations of accounting irregularities.

  2. Intel Corporation (INTC): Stock climbs 8.5% on reports of the company exploring strategic options to address core business challenges.

  3. MongoDB, Inc. (MDB): Shares jump 16% after the company surpasses earnings expectations and raises its forward guidance.

  4. Dollar General Corporation (DG): Stock recovers modestly, gaining 3%, following a sharp decline after the company cut its sales and earnings outlook.

  5. Dollar Tree, Inc. (DLTR): Shares hit a 52-week low as the company navigates ongoing challenges in the evolving retail landscape.

Other Magnificent 7 Updates

  • Berkshire Hathaway Inc. (BRK.A) achieves a $1 trillion market capitalization milestone, showcasing its resilience amid market volatility.

  • Alibaba Group Holding Limited (BABA) shares advance 4% after the company receives clearance from Chinese regulators, concluding a three-year rectification process.

Other Notable Company News

  • Ulta Beauty, Inc. (ULTA) shares decline over 8% after the company misses second-quarter earnings expectations and revises its annual guidance downward.

  • CrowdStrike Holdings, Inc. (CRWD) gains 2% following an upgrade to a “buy” rating based on improvements in the company’s operational stability.

Sector Performance

Sector

Symbol

% Change

Consumer Discretionary

XLY

+1.43%

Consumer Staples

XLP

+5.32%

Energy

XLE

-0.34%

Financials

XLF

+0.51%

Health Care

XLV

+0.38%

Industrials

XLI

+0.59%

Materials

XLB

+0.62%

Real Estate

XLRE

+0.62%

Technology

XLK

+0.54%

Communication Services

XLC

+0.39%

Utilities

XLU

+0.47%

Bond Market Outlook

The bond market is poised for potential shifts as the Federal Reserve signals the possibility of interest rate cuts. This evolving landscape of lower borrowing costs may present fresh opportunities for yield-seeking investors.

Policy Watch

Market participants are eagerly awaiting the upcoming Federal Reserve meeting scheduled for September 17-18. Incoming economic data will be closely monitored for its potential influence on policy adjustments. The Fed’s recent indications about rate cuts are shaping expectations and market sentiment as we move forward.

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

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