Weekend Updates - 8/18/24

The stock Market continued to recover from last week's sharp pullback, with the S&P 500 up over 6.5% from the August 5 lows, and the Nasdaq up over 8%. Two factors seemed to have driven the positive sentiment over the past several days, because inflation data continues to moderate, with both consumer price index (CPI) and producer price index (PPI) inflation coming in softer than expected for the month of July. Secondly, the retail sales and jobless claims coming in better than forecast. 

On Thursday, 8/15, the stock market had a big rally after a strong July Retail Sales report and encouraging quarterly numbers from Walmart which reinforced the idea that the U.S. economy is not inching towards recession rather braced for a soft landing. We got great CPI numbers yesterday, inflation falling to 2.9%. Also, good PPI numbers on Wednesday. However, the main catalyst today was July retail sales which was up 1%, much better than expected 0.3%. More over the weekend, if possible..Have a good evening!

Tue, 8/13/24: PPI inflation was softer in July rising 0.1% month-over-month, less than the 0.2% rise expected by economists. Core PPI was flat, much less than the 0.2% rise expected by economists. On a year-over-year basis, PPI dropped from 2.6% to 2.2%.

Wed, 8/14: CPI inflation returns to long-term “normal” levels. Both headline and core CPI rose 0.2% month-over-month in July, in-line with estimates. Year-over-year, CPI dropped from 3% to 2.9%. Core CPI dropped from 3.3% to 3.2%. Both are now at cycle lows.

Consumer spending jumped in July as retail sales were up 1%, much better than expected 0.3%. June retail sales were revised to 0.2% vs. Flat.

Initial jobless claims for the week ended Aug. 10 fell to 227,000 from the prior week's 234,000 and forecasts for 234,000. 

Federal Reserve Jackson Hole meeting kicks off this week from 8/22 - 8/24. As usual, it has always been an extremely important meeting. however this year it has special significance considering Fed rate cuts are approaching. So, this meeting should provide some insights about Fed perspective about its future policy. This in turn should have major market implications. So, we will see how it goes..

On earnings front, I will be watching Palo Alto Network (PANW) which reports after the close of market tomorrow. Also, Target and Macy's are expected to report earnings this week.

Stocks to watch: NVDA, SMCI, PANW, TSLA, DELL

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