To The Moon

Last Week's Recap

The US Market - The stock market rally in a volatile week

• The S&P 500 and the Nasdaq ended higher in volatile trade with 0.82% and 2.26% up, each. However, the Dow logged a second-straight week of losses. The 10-year Treasury yield pulled back after hitting a 15-year high.

• Some investors expressed optimism that the Fed is nearing the end of its rate-hiking cycle. They cheered comments from Jerome Powell, that point to stronger-than-expected economic growth.

• Jerome Powell, in his annual Jackson Hole policy speech, said policymakers may need to hike again due to the U.S. economy's surprising strength. Then he stressed that the Fed will "proceed carefully" with any hikes. However, he reiterated the central bank’s commitment to pull inflation back down to its 2% goal.

The US Sectors & Stocks - NVDA crushed views and sharply raised guidance yet again

• Energy and consumer staples were the only two of 11 S&P 500 sectors to end the week lower. Energy was down 0.79% on the week, followed by consumer staples at 0.44% lower. Dollar Tree and Target dragged on the consumer staples sectors, with drops greater than 13% and 7%, respectively.

• Consumer Cyclical sector led the broad index rose, with a 5.71% up. Tesla (TSLA) jumped around 10% for the week.

• Artificial intelligence chipmaker Nvidia (NVDA) smashed Wall Street's lofty expectations for its fiscal second quarter and guided much higher than views for the current period. It was the second big beat-and-raise quarter in a row for Nvidia. On a year-over-year basis, its earnings rocketed 429% while sales soared 101% thanks to massive demand for chips and hardware for AI data centers. Nvidia predicted its sales will rise 170% in the current quarter. NVDA erased post-earnings rises but was up sharply for the week.

• Affirm (AFRM) jumped 30% after the E-payment firm posted stronger-than-expected fiscal fourth-quarter results and offered uplifting guidance.

• AMC Entertainment (AMC) finished the week with a 65% lost. The movie-theater chain converted its preferred equity units to common stock on Friday. The “APEs” debuted last year on the New York Stock Exchange as AMC attempted to raise money to pay off debt. AMC concluded a 10-for-1 reverse stock split before trading opened Thursday.

• Retailers cite consumer woes. Macy's (M) reported yet another quarter of year-over-year declines, with adjusted EPS off 74% but still beating views. The department store giant said it's cautious about consumer spending. Dick's Sporting Goods (DKS) and Foot Locker (FL) slashed guidance after disappointing quarterly results.

Australian Market - ASX 200 logged another weekly drop

• For this entire week the Australian share market has been trading in an information vacuum. ASX 200 logged another weekly drop to close at 7115.2 points.

• Australian investors will get a chance to react to the Jackson Hole speech and following the US lead out of the hole.

• ANZ has raised fixed home loan rates, falling in behind ASB who moved on Monday. That makes them the first (and only) main bank to offer a 6% rate in the current rising cycle.

Singapore Market - Singapore’s inflation rate continues to fall

• Singapore shares bucked regional market trends and gain to close out the week higher. The Straits Times Index (STI) climbed 0.33% to end the week at 3,189.88.

• The latest numbers show that prices rose at a slower pace for the third consecutive month, with Singapore’s core inflation falling to 3.8% year on year in July, down from 4.2% back in June. Overall inflation, which includes private transport and accommodation, slid to 4.1% in July down from 4.5% in June.

• For those who are worried about high utility costs, electricity and gas inflation experienced the sharpest decline in July, falling 1.6% because of lower tariffs. Economists are expecting more easing in the months ahead in what must be music to many consumers’ ears. The Monetary Authority of Singapore and the Ministry for Trade and Industry have maintained their overall inflation forecast at between 4.5% and 5.5% for 2023.

Hong Kong Market - Hong Kong will establish a task force to enhance the stock market’s liquidity

• Hong Kong stocks snapped a three-day rebound last week, as earnings results from some industry bellwethers heightened concerns about their business outlook, while the US central bank retained a hawkish stance on monetary policy to contain inflation.

• However, the Hang Seng Index trimmed the weekly gain to less than 0.1%. The Tech Index dropped 2.4%.

• Hong Kong will establish a task force to enhance the stock market’s liquidity to boost its performance as part of efforts to strengthen the competitiveness of the international financial centre, the city’s leader has said.

• China’s stamp duty on stock transactions will be cut in half from Monday, the first such reduction since the 2008 global financial crisis, as part of the government’s latest stimulus measures in response to the country’s uneven economic recovery.

The Week Ahead

Macro Factors - PCE and August jobs report on the way

• With one more week left to go in August, investors will be wrapping up what has been a downbeat month with more jobs data and macroeconomic reports that could illuminate the path forward for monetary policy.

• A key inflation gauge of personal consumption expenditures data (PCE) will release on Thursday, Following by the August jobs report that’s set to come out Friday.

• Economists are expecting to see a 0.3% rise in income and a 0.7% increase in spending in the month. The Federal Reserve’s preferred inflation measure, the core personal-consumption expenditures price index, is forecast to be up 4.2% from a year earlier.

• The BLS is expected to report a gain of 175,000 nonfarm payrolls for August, which would be another slim deceleration from the prior month. The unemployment rate is forecast to hold steady at 3.5%. Average hourly earnings are seen rising 0.4% month over month, matching July’s pace.

• According to the CME Fedwatch Tool, the likelihood that the Federal Reserve will pause in September stands at about 80%. Meanwhile, in November, traders are betting on a roughly 46% chance the central bank will hike rates then.

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Earnings

• The regular Q2 earnings season is virtually over. There were 10 S&P 500 companies reported Q2 earnings and 8 of them beat consensus EPS expectations last week. Overall, 484 (97%) of companies in the S&P 500 have reported Q2 results so far.

• A few earnings is still ongoing in the week. NIO, Best Buy, and HP will report on Tuesday, followed by Salesforce and Crowdstrike on Wednesday. On Thursday, Broadcom, Dollar General, and Lululemon release results.