Last Week's Recap
The US Market - SPX gained for 7 days in a row
Wall street closed out the best week of 2024, as a market comeback from a violent rout to begin August. The S&P 500 gained for seven days in a row after its worst day on August 5th, known as "Black Monday".
The S&P 500 and the Nasdaq rose 3.9% and 5.3%, respectively, registered their best week since November 2023. Following the comeback this week, the S&P 500 is now just 2% away from its mid-July record high.
The July CPI met expectations, with Headline and Core rates both up 0.2%. Year-on-year Headline CPI dropped under 3%. Meanwhile, July retail sales jumped 1%, or 0.4% excluding food and energy, much stronger than economists expected. Both data offered evidence that recession fears, which helped spark a global sell-off earlier this month, were overblown.
The CBOE Volatility Index (VIX) — otherwise known as Wall Street’s fear gauge — as a troubling signal for markets. The VIX is back around 15, after spiking above 65 last Monday, suggesting investors have shifted back to a risk-on position.
Gold price broke out of $2500, and gold futures hit a new intraday all-time high of $2,548.3.
The US Sectors & Stocks - All S&P 500 sectors ended in positive territory
All S&P 500 sectors ended the week in green, with the technology sector leading the rebound. Nvidia (NVDA) are among the biggest winners in technology stocks over the week with a gain of nearly 19%. Apple (AAPL) and Microsoft (MSFT) advanced roughly 4% and 3%, respectively, for the week.
The SPDR Gold ETF (GLD) and The VanEck Gold Miners ETF (GDX) gained 3.3% and 7.4% for the week, respectively, as gold futures are up around 3%, putting the commodity on post its third straight positive week.
Walmart (WMT) signaled stable consumer health. The Dow Jones retail giant beat expectations for both EPS and revenue. The company also guided higher for the year, though management remains cautious for the latter half of 2024.
Starbucks (SBUX) posted its best-ever daily gain Tuesday after poaching Chipotle's CEO to lead the company. Niccol, Chipotle (CMG) CEO since 2018, has seen the fast-casual chain's profits spike sevenfold and the stock price soar 800%. SBUX rocketed 24.5% Tuesday. CMG tumbled, but later pared losses.
Alphabet (GOOGL) fell modestly. The Justice Department reportedly is mulling a breakup of Google-parent Alphabet. Google will likely appeal. If the DOJ aims for a breakup, it would probably seek to carve off the Android mobile operating system and Google's Chrome web browser.
Home Depot (HD) beat its EPS and revenue for fiscal Q2. But same-store sales fell 3.3%, missing estimates. CEO said higher interest rates and greater macroeconomic uncertainty pressured consumer demand, but long-term fundamentals still support home improvement demand. Home Depot (HD) guided slightly lower on full-year earnings but raised sales targets.
Cisco Systems (CSCO) jumped despite its earnings and revenue that fell for a third straight quarter, but topped Wall Street estimates as trends improved for its core computer networking unit.
Nu Holdings (NU) stock surged to a record high, after the Brazilian digital bank reported Q2 EPS surged 115% while revenue leapt 52% to $2.85 billion, both topping expectations. The company added 5.2 million customers during the quarter.
Warren Buffett’s Berkshire Hathaway added 690,106 shares in retail cosmetics chain Ulta Beauty (ULTR) and 1.04 million shares aerospace company Heico Corp (HEI) during the second quarter, according to its 13F. Its stake in Ulta was worth about $260 million, based on Friday’s closing price, while the Heico shares were valued at roughly $250 million.
Hong Kong Market - HSI gained for a second straight week
Hong Kong stocks saw a second straight weekly gain, with the Hang Seng Index rising nearly 2%. The PBOC will step up efforts to make sure the fiscal and monetary policy measures already introduced this year will be effectively implemented, Pan Gongsheng, governor of the central bank said.
Tencent (0700.HK) reported Q2 results beat on profit, but slightly missed on revenue. The tech giant‘s revenue was up 8% year-on-year as growth in its key gaming division accelerated. while profit rose 82%. Tencent has forked out almost $8 billion this year to repurchase its Hong Kong-listed shares, according to Bloomberg.
Alibaba (9988.HK/BABA)'s earnings for June-quarter beat while sales came in light, amid weaker consumer spending in China and competition from PDD Holdings. Alibaba advanced 3% for the week.
JD.com (9618.HK/JD) reported a stronger-than-expected adjusted EPS. Sales edged past consensus. JD stock rose 8% as its quarterly profit nearly double.
Singapore Market - STI rebounded 2.79%
Singapore stocks boosted by a series of positive economic data, with the Straits Times Index (STI) rising 2.79% this week. Non-domestic exports far exceeded economists’ estimates to climb 15.7 per cent in July, as both electronics and non-electronics exports grew.
Moreover, Singapore narrowed its GDP growth forecast for 2024 to 2% to 3% from a previous range of 1% to 3%, as per data released by Singapore's Ministry of Trade and Industry.
Sea Limited (SE) soared 21.52% this week. Sea Ltd. reported second-quarter earnings that topped analysts’ estimates, after it continued to attract online shoppers in Southeast Asia’s rapidly growing e-commerce market, signaling it can handle competition from Temu, TikTok and Alibaba.
Grab Holdings (GRAB) missed second-quarter revenue estimates as demand faltered in its ride-share and food-delivery services, sending its U.S.-listed shares down more than 7% after earnings report on Thursday. For the week, shares dropped 2.16%.
DBS Group (D05.SI) shares rose 7.6% this week. The bank announced last Wednesday the appointment of Tan Su Shan as its deputy chief executive officer.
ST Engineering (S63.SI) net profit for the first half ended Jun 30, 2024, grew 19.9% year on year (yoy) to S$336.5 million, from S$280.6 million previously. Shares of ST Engineering gained 8.06% for the week.
Australian Market - ASX rallied 2.4%
The ASX 200 rose 2.4% weekly, to 7971.1 points as Australian bond yields eased and data showed the nation’s jobless rate rose to 4.2% in July broadly in-line with the market’s expectations. That strength carried energy sector and a 2.1% rise in of the highlights of a broad recovery.
“Stronger than expected US retail spending and jobless claims fuelled a risk positive night,” said National Australia Bank. NAB posted a third-quarter cash profit of $1.75 billion broadly in line with expectations.
It wasn’t such a happy story for the market operator, ASX Ltd (ASX: ASX) reported a slightly lower underlying profit of $474.2 million on record revenues of $1.03 billion.
The Week Ahead
Macro Factors - All eyes on Jackson Hole
The Federal Reserve’s annual Jackson Hole conference will be this week’s highlight, including a highly anticipated speech by Jerome Powell at 10 a.m. Friday ET. The Fed chair is expected to lay the groundwork for a September interest-rate cut.
To be sure, markets may have already more than priced in any dovish expectations. By the end of the year, markets are now signaling a significant drop in the key fed funds lending rate, by one full percentage point to 4.25%-4.50%, from the current 5.25%-5.50%, according to the CME FedWatch Tool.
The central bank will also release the minutes from its late-July monetary policy meeting on Wednesday. Economic data out this week will include the Conference Board’s Leading Economic Index for July on Monday and S&P Global’s Manufacturing and Services Purchasing Managers’ Indexes for August on Thursday.
The S&P 500 appears ready to clear new all-time highs, now that it’s roughly 2% away from the record it set in July. Investors optimistic the U.S. is headed for a soft landing. Still, wary market observers say investors should be positioned for further volatility.
Earnings
About 93% of S&P 500-listed firms have posted results as August 16th, according to FactSet. Of those, more than 78% have surpassed Wall Street’s expectations.
While the lion’s share of reports has already dropped, investors still have some big names to watch for next week. Retailers Lowe’s, Target and Macy’s are all slated to publish earnings, alongside tech names such as Zoom Video, Workday and Palo Alto Networks.
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