Wall Street closed the past two weeks with consecutive gains, entering a crucial period marked by Nvidia’s earnings report and a vital inflation reading favored by the Federal Reserve. On Friday, Fed Chairman Jerome Powell’s speech at Jackson Hole was well-received, fueling market optimism. The S&P 500 and Nasdaq recovered from Thursday’s dip, both ending the week nearly 1.5% higher. Powell hinted at possible interest rate cuts, suggesting the “time has come for policy to adjust.” Market expectations now include a cumulative 100 basis points in cuts by year’s end.
TJX Companies led the stock gains, surging over 6.5% following strong quarterly earnings and guidance updates, prompting an increase in price target from $115 to $130 per share. Palo Alto Networks also posted robust earnings, with its stock rising 4%, resulting in a heightened price target from $360 to $380. Conversely, Estee Lauder lagged, leading to its removal from portfolios due to underwhelming performance in the prestige beauty market. The S&P Short Range Oscillator indicated an overbought market, leading to strategic trims in Morgan Stanley and Abbott Laboratories.
The upcoming week is pivotal for Nvidia, Salesforce, and Best Buy, all slated to release their fiscal 2025 Q2 earnings. Nvidia’s report, anticipated on Wednesday, is expected to highlight continued capital expenditure by major clients, with investors keenly watching for guidance on Q3 and updates on supply-demand dynamics. Salesforce, also reporting Wednesday, seeks to rebound from previous shortfalls, with management’s commentary on deal activity being crucial. Best Buy reports Thursday, with a focus on the rollout of AI-equipped hardware amidst a sluggish start in demand.
On the economic front, significant data releases include the PCE price index on Friday, with headline and core rates predicted to rise by 2.5% and 2.7%, respectively, signaling inflation trends. GDP figures are expected to remain steady, with an annual growth rate of 3.1%. Investors will be closely monitoring these indicators as August concludes.
Original Story https://www.cnbc.com/2024/08/25/2-big-tests-ahead-will-determine-if-last-weeks-stock-market-excitement-was-warranted.html
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