Last Week's Recap
The US Market - The Dow hit a record high to end a volatile month
The stock market rallied showed mixed action in the past week, with the Dow hit a record high while the Nasdaq fell solidly.
Investors ended a volatile month on a high note. Despite the major averages suffered a steep sell-off at the start of the month, the S&P 500 notched its fourth straight winning month. That is a swing of about 10% from low to high this month, the S&P 500′s widest range in a given month since October 2022.
Inflation is cooling more than expected, but the broad economy is holding up pretty well amid solid consumer spending. PCE reading, the Fed’s preferred inflation gauge, rose 0.2% on a monthly basis in July and 2.5% from a year ago. The result was in line with estimates from economists polled by Dow Jones. Excluding food and energy, the so-called core PCE also rose 0.2% from the prior month.
The US Sectors & Stocks - 10 of 11 S&P 500 sectors were up in August
About two-thirds of the S&P 500 were up in August, representing a broad rally. It is also the first time in exactly three years that the S&P 500 has risen in 9 out of 10 months.
The best-performing groups were financial and technology sectors, which gained more than 5%. In the financial sector, Berkshire Hathaway (BRK.B) raised over 10% to a new record high, while regional banks rallied solidly.
Software stocks were the best-performing stocks in the technology sector, especially FTNT +34.11%, CRWD +23.66% and UBER +19.85%.
（Source: Finviz.com）
Nvidia (NVDA) fell 7.73% last week, as its latest quarter delivered a beat-and-raise quarterly report but came up short of lofty "whisper numbers." The tech titan reported a 152% EPS gain in Q2 while revenue jumped 122%. For the current quarter, Nvidia forecast revenue of $32.5 billion, up 79%.
Super Micro Computer (SMCI) logged its worst month ever, with its shares falling 38% in August. The company said it would postpone the release of its annual filing and Hindenburg Research revealed a short position, alleging “accounting manipulation.”
CrowdStrike (CRWD) cut fiscal 2025 guidance across the board in the wake of a widespread IT outage on July 19 caused by a defective CrowdStrike software update for corporate customers. But fiscal Q2 earnings and revenue beat consensus.
Affirm Holdings (AFRM) surged 40% as it reported a smaller-than-expected fiscal Q4 loss with revenue up 48% to $659 million, also topping. The buy now, pay later giant guided up on Q1 revenue and predicted a GAAP profit in Q4 2025.
Dollar General (DG) crashed 33%, its largest percentage decrease on record. Its earnings, revenue and comparable sales all missed expectations and the country's largest dollar-store operator missed its sales expectations and slashed its annual outlook. The company cited economic strain on its customers along with inventory damages and theft as the reasons for its stunted growth in the midst of revamping efforts.
Abercrombie & Fitch (ANF) cleared estimates with its sixth consecutive quarter of triple-digit earnings growth, 127%, with sales up 21% to $1.134 billion. But the young adult retailer guided Q3 lower as the CEO warned of an "increasingly uncertain environment." ANF tumbled more than 16% on the week.
Warren Buffett’s Berkshire Hathaway sells more Bank of America (BAC), has now cut its stake by 14.5% with the sale of 150.1 million shares for $6.2 billion since it began to reduce its holding on July 17. That’s an average of $41.33 per share.
PDD Holdings (PDD) crashed more than 30% to a 52-week low, after it said its was willing to accept lower profitability amid fierce competition and its profit growth would slow down.
Hong Kong Market - HSI rallied to a seven-week high
Hong Kong stocks rose, logging another winning week after investors scooped up Chinese electric vehicle makers like Xpeng and BYD after a recent sell-off. The Hang Seng Index (HSI) advanced 2.1% to a seven-week high of 17,989.07.
Meituan (3690.HK) surged 13% to HK$115.70 after its second-quarter profit more than doubled from a year earlier and revenue beat market consensus. The company also launched a USD$1 billion buyback program.
Chinese EV maker Xpeng (9868.HK/XPEV) unveiled budget car models priced under US$17,000. The shares rallied nearly 15% for the week.
As of August 30, 65 members in the Hang Seng Index have published their interim reports, with profits beating consensus estimates by 1.3% , according to Bloomberg data. Profit growth was 9.4% in the first six months, compared with 6.1% in 2023.
Singapore Market - STI rose 1.62%
Singapore stocks rose 1.62% this week, boosted by positive US economic data and strong performances among technology shares. The benchmark index logged a 0.38% loss in August.
Singapore Airlines (SIA) announced that it has received approval from the Indian government for foreign direct investment, as part of a merger in which Vistara, its 49 per cent-owned joint venture with Tata, will be absorbed into Air India.
Singtel’s Digital InfraCo unit, Nxera, is exploring opportunities with Hitachi to develop data centres across Japan and potentially the wider Asia-Pacific region.
Silverlake rose 25% after receiving privatisation offer with S$0.36 per share cash option.
Australian Market - ASX added 0.9%
The ASX 200 Index added 0.9% for the week to 8091.9, as eight out of the 11 sectors. The benchmark index closed flat in August.
National Australia Bank’s new chief executive Andrew Irvine said big divisions in the performance of Australia’s economy were making it more difficult for the Reserve Bank to set appropriate interest rates.
Star Entertainment (ASX: SGR) had been halted and its full-year results were not released as expected, with the NSW casino regulator saying it needed more time to decide what to do about the struggling gaming giant.
Consumer discretionary stocks were dragged down by Harvey Norman (ASX: HVN) shares which fell 6.3% to $4.58 after the retail giant’s profits disappointed.
The Week Ahead
Macro Factors - Jobs report kicks off a tough month
US markets will be closed for Labor Day on Monday before attention turns to incoming labor market data set for release throughout the week.
Entering September, Wells Fargo wrote in a note that the S&P 500 typically underperforms leading up to a U.S. presidential election. Over the past six presidential election cycles, the SPX has averaged a negative 4.3% return (median: -1.9%) during the two-month leadup to Election Day. Wells Fargo added that defensive sectors typically perform the best, with consumer staples, utilities and health care averaging respective relative returns of 3.9%, 3.4% and 2.3%. Real estate and information technology have performed the worst, averaging relative declines of 3.5% and 3%, respectively.
September is seasonally the weakest month on the calendar, averaging a decline of 1.2% historically, Bank of America Securities technical strategist Stephen Suttmeier pointed out. There are significance to economic reports between now and the Fed meeting. Of note, August nonfarm payrolls data is due out September 6, while consumer and producer price indexes are set to release September 11-12.
Consensus expectations among economists surveyed by Bloomberg project the US economy added 163,000 jobs in August while the unemployment rate ticked down to 4.2%.
Earnings
Only seven S&P 500 companies have yet to report this season, a sign that the second-quarter earnings season is wrapping up. Chip maker Broadcom (AVGO) announces its results on Thursday.
Nvidia’s beat put the S&P 500 over the top this season — with an exactly 13% earnings growth rate for the second quarter, according to financial data firm LSEG. That is the strongest earnings growth since Q4 2021, unexpectedly passing the 11.4% growth rate from Q1 2022.
Leading the way, the tech, financials and health-care sectors all saw earnings growth of more than 20%. Only two sectors, though — materials and real estate — are ending the season with earnings contractions.
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