For all the hype this week heading into Nvidia ‘s earnings release and another important update on inflation, the stock action was pretty muted, especially given all the volatility this August: The S & P 500 closed up 0.24%, the Nasdaq Composite fell 0.92% and the Dow Jones Industrial Average ended up 0.94%. Within the portfolio, Nvidia, Salesforce, and Best Buy all reported strong quarterly results. Shares of the latter two rallied on their beats, while chipmaker Nvidia didn’t deliver quite enough to jump over the loftiest of expectations. The stock is a victim of its own success. Despite the sell-off, we’re not ready to swoop in and pick up more shares on weakness just yet. The main economic event of the week came on Friday, with the release of the July personal spending and income report. It’s within this report that we find the PCE price index, the Fed’s preferred measure of inflation. It was something of a goldilocks report, with personal income coming in a tick higher than expected month over month and the core PCE price index coming in a tick below expectations (2.6% vs. 2.7% estimate), on a year-over-year basis. On Thursday, there was a positive update on second quarter GDP, which was revised to indicate a 3% annual rate of increase, up from the 2.8% rate indicated with the “advance” estimate. In the release, the Bureau of Economic Analysis noted that the update primarily reflected an upward revision to consumer spending. Separately on Thursday, pending home sales were shown to have declined 5.5% monthly in July, well below expectations for 0.1% increase. Looking under the hood of the S & P 500, financials led to the upside, followed by materials and industrials. Technology led to the downside, followed by consumer discretionary and communication services. Next week the U.S. markets are on closed Monday for Labor Day, but don’t let that fool you: We’re going to pack a lot into the holiday shortened trading, including a Club earnings release and several closely watched macroeconomic updates. 1. Jobs. The closely watched August nonfarm payrolls report is out Friday. According to FactSet, economists are expecting to see a 155,000 increase in payrolls, for hourly earnings to be up 0.3% month over month, and for the unemployment rate to come in at 4.2%, down from the 4.3% rate we saw in June. The ADP Employment Survey lands Thursday, and while it doesn’t carry as much weight as the nonfarm payrolls report, it does break down data by industry and business size. The July JOLTS job openings report comes Wednesday and show just how tight the labor market is and thus where wages may be headed. Thinking holistically about all three updates, we want to see strong employment, but nothing so strong in terms of wages or extreme labor market tightness that would spark fears of a rebound in inflation — and in turn a tougher stance from the Federal Reserve when it comes to cutting rates. We want the central bank to cut because we don’t need higher rates to beat inflation anymore, not because the economy has suddenly become weaker than expected. Fortunately, we likely have a little more wiggle room this time around following Fed Chair Jerome Powell’s speech at Jackson Hole on Aug. 23. During that speech , Powell stated: “All told, labor market conditions are now less tight than just before the pandemic in 2019 — a year when inflation ran below 2%. It seems unlikely that the labor market will be a source of elevated inflationary pressures anytime soon. We do not seek or welcome further cooling in labor market conditions. Overall, the economy continues to grow at a solid pace. But the inflation and labor market data show an evolving situation. The upside risks to inflation have diminished. And the downside risks to employment have increased. As we highlighted in our last FOMC statement, we are attentive to the risks to both sides of our dual mandate. The time has come for policy to adjust.” 2. Manufacturing. The August ISM Manufacturing PMI numbers are released Tuesday and the July factory orders on Wednesday. We’re still expecting to see the manufacturing data point to a contraction, though at a slower pace than July, and factory orders are predicted to have advanced 0.2% month over month, an improvement from the 3.3% monthly decline previously. August ISM Services PMI come out Thursday, and expectations are for a very slight deceleration in the rate of expansion. 3. Earnings . Club name Broadcom reports Thursday, and AI networking revenue and custom accelerator chip demand will be front and center as cloud customers continue to tap the chipmaker for help in revamping data centers to handle the massive amount of compute needed for AI workloads. Outside of the AI demand, we’re looking for further indications that the legacy business is starting to bottom and set up for a rebound in 2025. On the legacy side, we are particularly interested to hear about what CEO Hock Tan has to say about demand in the company’s wireless business, the second largest portion of the semiconductor solutions segment. They won’t say it, but the bulk of wireless revenues come from Apple . Given Apple’s upcoming iPhone event in September and our view that a massive upgrade cycle is about to get underway on the back of the iPhone 16 and launch of Apple Intelligence, expect investors to scrutinize Tan’s comments. On the software side, more on the integration of its VMware acquisition is welcome, along with any details on the pace of deal activity. Monday, September 2 U.S. stock markets are closed for Labor Day. Tuesday, September 3 10:00 a.m. ET: ISM Manufacturing PMI Before the bell: After the bell: Zscaler (ZS), GitLab (GTLB), Asana (ASAN), Sportsman’s Warehouse (SPWH), PagerDuty (PD) Wednesday, September 4 10:00 a.m. ET: Factory Orders 10:00 a.m. ET: JOLTS Job Openings 2:00 p.m. ET: Fed Beige Book Before the bell: DICK’S Sporting Goods (DKS), Dollar Tree (DLTR), Ciena (CIEN), Hormel Foods (HRL), Core & Main (CNM), REV Group (REVG) After the bell: AeroVironment (AVAV), C3.ai (AI), Hewlett Packard Enterprise (HPE), ChargePoint (CHPT), Casey’s General (CASY) Thursday, September 5 8:15 a.m. ET: ADP Employment Survey 8:30 a.m. ET: Initial Jobless Claims 10:00 a.m. ET: ISM Services PMI Before the bell: NIO (NIO), Toro (TTC), Science Applications (SAIC), Lands’ End (LE), G-III Apparel (GIII) After the bell: Broadcom (AVGO) , UiPath (PATH), Samsara (IOT), DocuSign (DOCU), Rent the Runway (RENT), Zumiez (ZUMZ) Friday, September 6 8:30 a.m. ET: Nonfarm Payrolls Before the bell: Big Lots (BIG), ABM Industries (ABM), Genesco (GCO), BRP (DOOO) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
For all the hype this week heading into Nvidia‘s earnings release and another important update on inflation, the stock action was pretty muted, especially given all the volatility this August: The S&P 500 closed up 0.24%, the Nasdaq Composite fell 0.92% and the Dow Jones Industrial Average ended up 0.94%.
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