The Fuse
Stock futures are clinging to a modest rally that was spurred on overnight strength in Europe, where bonds also rallied. Stocks in the US are trying to battle back and return to an up session before the big Powell appearance in Jackson Hole.
Interest Rates are dropping as bonds are rallying smartly with stocks. There was strength in fixed income overseas that is helping shore up the equity markets after a weak showing Tuesday.
All eyes/ears tonight will be on the Republican debate in Milwaukee, the first of a series between candidates.
Several big earnings tonight but everyone will be watching NVIDIA after they blew out their quarter in May. Several AI companies will be watched carefully as well. We will also hear from Splunk, Snowflake, Autodesk and NetApp after the close.
Jackson Hole Conference later this week where we’ll hear from Major Bank leaders, topping it off is Chair Powell, who decidedly spooked the markets in 2022 with a very hawkish speech.
Another session of poor breadth, so far 15 of 16 days in August have seen this occur. We have noticed the oscillator has been oversold for a few days now, when will it turn? In all likelihood before anyone believes, but certainly there is a chance of a big reversal following news releases later in the week.
Volume was lower yesterday but the indices look rather weak. What might turn things around? A big selloff where market players are giving up hope for a rally and just throw in the towel. At that moment we might see more ‘permanent’ buyers stepping in.
For the SPX 500, resistance from the downward moving 20 day moving average is going to start coming into play. Currently at 4481, this MA is coming down fast to join the party, with the SPX well under 4,400 that is going to be heavy resistance in days. Next up is the fight at 4,330 and if that doesn’t hold far more levels below towards 4,200.
The Internals
What’s it mean?
Seeing continued selling and consolidation of the recent uptrend. VOLD was down and finished at its worst levels of the day, so did ADD and look at the ticks, extremely bearish. The TRIN hit a high level and backed off a bit, we may see more internal ‘combustion’ later this week. Today is the big earnings release for NVDA, buckle up!
The Dynamite
Economic Data:
- Wednesday: S&P Global PMI Flash, New Home sales data
- Thursday: Jobless claims, Durable Goods, KC Fed manufacturing index
- Friday: Jackson Hole conference (Powell speaks), Univ of Michigan confidence
Earnings this week:
- Wednesday: AAP, ADI, FL, KSS, DY, PTON, WSM, ADSK, GES NTAP, NVDA, SNOW SPLK
- Thursday: BBW, BURL, DLTR, AFRM, GPS, INTU, JWN, MRVL, ULTA, WDAY
- Friday: n/a
Fed Watch:
It’s the big Jackson Hole Conference later this week, and if you recall Chair Powell’s last appearance there (2022) he brought down the house – so to speak. Stocks were punished and led a path towards the October lows as the Chairman reiterated a hawkish view on interest rates. A year later much has changed and we don’t anticipate the same rhetoric, but it could be market-moving.
Stocks to Watch
NVIDIA – Earnings are out midweek from the big chip maker and many are wondering if NVIDIA can once again pull off a big quarterly report.
Interest Rates – Once again, rates rose up this week and tagged levels not seen in about 15 years. There was a pullback of sorts on rates Friday but plenty of selling in the bond market all week long.
Volume – As we pass a big expiration day on Friday we may see volume levels start to quiet down, approaching the Labor Day holiday. That makes for some erratic movements. We’ll also be watching crude oil as it climbed once again this past week.
