Wall Street heads into a giant week with two consecutive weekly gains and an overbought market, with Nvidia earnings and the newest reading on the Federal Reserve’s hottest inflation gauge taking center stage. Fed Chair Jerome Powell delivered the speech from Jackson Hole that investors wanted to listen to on Friday. The S&P 500 and Nasdaq rebounded from Thursday’s losses to finish the week up nearly 1.5% each. Powell hinted that rate cuts are imminent, saying it’s “time for a policy adjustment.” The market now expects rate cuts of 100 basis points, or 1 percentage point, by yr’s end. According to the CME FedWatch tool, the present odds are a 25 basis point cut in September, a possible 50 basis point cut in November and a 25 basis point cut in December. TJX Companies was our best-performing stock of the week, gaining greater than 6.5% after the off-price retailer’s strong quarterly beat and guidance hike. We raised our price goal to $130 per share from $115 but maintained our rating of two, meaning we might need to see shares pull back before considering more buys. Palo Alto Networks shares were also strong this week, gaining 4%. The cybersecurity leader delivered strong earnings and a promising outlook after Monday’s close. We maintained our rating of two but raised our price goal to $380 from $360. Estée Lauder also reported earnings last week, but we decided to dump the stock after the discharge because we didn’t see the progress we desired to see within the prestige beauty market. Monday’s exit got here before the S&P Short Range Oscillator officially flipped overbought. That happened after the market close on Monday and remained overbought all week. Since discipline requires us to make some selling in an overbought market, we also trimmed Morgan Stanley and Abbott Laboratories on Tuesday. Club Earnings Looking ahead, earnings season continues, and essentially the most eagerly awaited release of the season comes after the market close on Wednesday when Nvidia reports. NVDA YTD Mountain Nvidia YTD Nvidia will report leads to Q2 FY 2025. Last week, we laid out some thoughts on Nvidia’s stock price and the overall market situation ahead of the report. We’re fairly confident about what Nvidia can have to say about Q2 FY, as its largest customers haven’t signaled a slowdown in capital spending in their very own earnings reports. Investors can be very focused on Nvidia’s guidance for the present quarter (fiscal third quarter). On the post-earnings call, commentary on supply and demand dynamics may also be key, especially given evidence of a brief delay to Nvidia’s next-generation Blackwell artificial intelligence chip architecture. We imagine concerns about Blackwell will prove largely inconsequential. Growth within the services sector may also be a very important piece to look at as a longer-term driver of further value creation. CRM YTD Mountain Salesforce YTD Salesforce also reports its second quarter for fiscal 2025 on Wednesday evening. Last time, it was a brutal performance, with revenue and operating margin missing expectations. Still, many of the enterprise software cohort was under pressure. Hopefully, Workday’s solid quarter late Thursday proves to be an indication of an industry rebound. Key to Salesforce’s conference call can be management’s commentary on the pace of deal activity. On the previous quarter’s conference call, Salesforce Chief Operating Officer Brian Millham said the buying environment at the moment remained “measured,” leading to “extended deal cycles, deal compression, and high budget scrutiny.” We’re in search of signs that the robust economy is boosting business confidence — and with it the pace of deal activity. BBY YTD Mountain Best Buy YTD Best Buy will release second-quarter fiscal 2025 results before the market opens on Thursday. Last time, Best Buy reported solid results. Although revenue fell wanting expectations, investors rewarded the corporate’s strong profitability and purchased into the view that a serious computer hardware upgrade cycle — driven by AI-equipped machines hitting the market — is about to start. However, we have seen signs that demand for AI devices could also be slowly getting going. On the conference call following the earnings release, we’ll have an interest to listen to how management is marketing the brand new technology to teach consumers on the advantages of AI-equipped hardware. We’re considering whether to trim some shares in Best Buy ahead of the discharge. Economic Data The coming week may also see the federal government take a re-assessment at second-quarter U.S. economic growth, in addition to the inflation indicator that Powell and his Fed colleagues give essentially the most weight to. The end of August is upon us — and with the ultimate week of the month comes one other update on inflation. The key event on the economic front can be Friday morning, when the non-public consumption expenditures (PCE) price index is released. The headline PCE reading is anticipated to rise 2.5% yr over yr, and the core reading, excluding food and energy prices, will rise 2.7%. The Fed has been attempting to bring inflation back all the way down to its 2% goal. Powell said Friday his “confidence has grown” that inflation is indeed trending back toward goal. The day before the PCE, we get GDP. Economists expect the second estimate of second-quarter economic growth to stay the identical as the primary, at an annual rate of three.1%. The gross domestic product report also features a price component — it is anticipated to rise 2.6% year-over-year, the identical increase because the last reading. Coming Week Aug. 26-30 Monday, Aug. 26 Pre-market results: PDD (PDD) Tuesday, Aug. 27 After-market: SentinelOne (S), Box (BOX), PVH Corp. (PVH), Nordstrom (JWN) Wednesday, Aug. 28 Pre-Market: Abercrombie & Fitch (ANF), Chewy (CHWY), Li Auto (LI), Kohl’s (KSS), Bath & Body Works (BBWI), Foot Locker (FL), JM Smucker (SJM) After-Market: Nvidia (NVDA), Salesforce (CRM), CrowdStrike (CRWD), Affirm (AFRM), Okta (OKTA), Pure Storage (PSTG), Five Below (FIVE), HP (HPQ) Thursday, Aug. 29 8:30 a.m. ET: Gross Domestic Product (Q2 Preliminary) 8:30 a.m. ET: Weekly Jobless Claims 10 a.m. ET: Pending Home Sales (July) Pre-Market: Best Buy (BBY), Dollar General (DG), American Eagle Outfitters (AEO), Ollie’s Bargain (OLLI), Campbell Soup (CPB), Burlington (BURL) After the close: Dell Technologies (DELL), lululemon (LULU), ULTA Beauty (ULTA), Marvell (MRVL), Gap (GPS), Autodesk (ADSK), MongoDB (MDB) Friday, August 30 8:30 a.m. ET: PCE Price Index (July) 10:00 a.m. ET: University of Michigan Consumer Sentiment (last updated August) (Jim Cramer’s Charitable Trust is long NVDA, CRM, BBY. A full list of stocks will be found here.) As a subscriber to CNBC Investing Club with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock from his Charitable Trust’s portfolio. If Jim has discussed a stock on TV on CNBC, he’ll wait 72 hours after the trade alert is issued before executing the trade. THE INFORMATION REGARDING INVESTING CLUB DESCRIBED ABOVE IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY AND OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR OBLIGATION IS CREATED BY OR RESULTING FROM THE RECEIPT OF INFORMATION RELATED TO INVESTING CLUB. NO PARTICULAR RESULT OR PROFIT IS GUARANTEED.
A television station broadcasts the speech of Federal Reserve Chairman Jerome Powell on August 23, 2024, on the trading floor of the New York Stock Exchange (NYSE) in Jackson Hole, Wyoming.
Angela Weiss | AFP |
Wall Street is coming off two straight weekly gains and an overbought market heading right into a key week that can concentrate on Nvidia earnings and the newest readings on the Federal Reserve’s hottest inflation indicator.
