Shesa's Weekend Stock Market Updates - 8|9|26

Welcome to my weekend updates

Good afternoon. First of all, my August blog is delayed. Possibly, I may publish the blog for August and Sept in next week/two. 

Last week U.S. stocks delivered one of its best performance since April, with major indexes posting solid gains and the S&P 500 closing at all-time record high. Some tech stocks bounced but please note that more than 60% of the tech stocks are still down around 20% or more. Let's take a look how the stock indices performance last week:

•  S&P 500: Up +3.6% (closed at 7,757.62 record high)

•  DOW: Up +3.0% (closed at 54,036.93)

•  Nasdaq Composite: Up +5.2% (closed at 26,690.62)

•  Russell 2000 (small caps): Up 3.5% (closed at 3,034.50) 

Te main reason for the positive market was momentum after strong corporate earnings (especially AI-related strength from companies like Microsoft and Amazon. Furthermore, the SpaceX (SPCX) stock rebounded 23% after the earnings and expiration period of post-IPO which was an important contributor for Nasdaq's good performance. In addition, optimism around potential geopolitical easing that helped pressure energy prices lower, and Friday’s weaker-than-expected July jobs report reduced concern about interest rate hike.

Economic Report Last Week

Nonfarm payrolls fell by -23,000 vs. 83,000 expected. This was a HUGE drop in the payroll giving investors some relaxation about rate-hike concerns, lowered Treasury yields, and reduced odds of a September Federal Reserve hike. 

ADP Report: The private-sector added 44,000 jobs in July vs. 95,000 expected. This was the lowest job increase in 6 months.

Economic Report this week

WED, 8/12: July CPI/Inflation data. This is the biggest potential market mover

THU, 8/13: Producer Price Index (PPI).

FRI, 8/14: U.S Retails Sales for July

Thoughts: Soft readings would further ease rate fears hikes and support equities; hotter numbers could reverse some of last week’s rate-cut optimism.

Earnings Last Week

SpaceX (SPCX)

• Revenue: Up 92% YoY
• Starlink subscribers doubled
• Connectivity: revenue +64%, operating income +79%
• $6 billion+ in Starshield contracts (military-grade satellite network )

My view: Undoubtedly, SPCX is an expensive stock. But SPCX and TSLA stocks should be hold for next several years by slowly accumulating it in small quantities. 

Advanced Micro Device (AMD) 

• Revenue: $11.54B vs. $11.3B expected, +50% YoY
• EPS: $1.66 vs. $1.61 expected
• Data Center: $6.7B, +107% YoY
• Q3 Revenue guidance: $13B vs. $12.5B expected.

My view: AMD had a good quarter beating top and bottom line, also guidance was reasonable. However, I was not impressed with the margin of beating expectations. Hold. 

Earnings this week to keep an eye

• Cisco (CSCO)
• Applied Materials (AMAT
• Nabius (NBIS) on Wed, 8/12
• Super Micro Computer (SMCI) 
• CoreWeave (CRWV)

Stocks to watch

SPCX, NVDA, TSLA, MU, NBIS, AMAT, SOXL, DELL, RDW, MSFT, GOOG, AMZN, AAPL

Going Forward - what can we expect

Last week was a good week for the stock market and it was nice to see some good bounce. There are more earnings to come but most of the tech giants have released their earning except Nvidia (NVDA) which reports on 8/26. This week's earnings can further set the tone for AI related stocks. We will have very important economic report CPI (Inflation) and PPI data this week. That may change the market sentiment either way. Mr. market may continue the positive momentum depending on inflation data. However we must remember that September is just about 3 weeks away. And this is the mid-term election year. So, we can expect a lots of volatility in the foreseeable future. So, it's better to keep that in mind from now. Have a good rest of the weekend!