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Seeking Alpha News Quiz
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Wall Street snapped a three-week win streak on Friday, as sentiment took a hit after some positive economic data and conflicting remarks from Federal Reserve speakers dented interest rate cut expectations.
The central bank last week delivered its first rate cut in nearly nine months, citing increased downside risks to the labor market. This week, market participants got to hear about that decision from several Fed speakers, including Chair Jerome Powell and newly appointed Governor Stephen Miran.
While Powell largely stuck to the same messaging from his post-decision press conference, Miran set out several arguments calling for a federal funds rate almost 2 percentage points lower than the current policy. Others, such as Vice Chair for Supervision Michelle Bowman, said recent labor market data showed “serious risk of already being behind the curve in addressing deteriorating labor market conditions.” On the other hand, policymakers such as Chicago Fed President Austan Goolsbee expressed uneasiness over “front-loading too many rate cuts” based on just jobs data.
Also clouding rate cut expectations this week was data showing a surprisingly strong economy and sticky inflation. The final estimate of U.S. Q2 GDP growth was revised up to an annual rate of 3.8% from 3.3%, primarily due to increased consumer spending. Meanwhile, the Fed’s preferred inflation gauge—the core personal consumption expenditures price index—increased to 2.9% Y/Y in August, in line with estimates but still well above the central bank’s 2% target.
The artificial intelligence (AI) trade got a shot in the arm this week after Microsoft-backed (MSFT) OpenAI and Nvidia (NVDA) announced a strategic partnership under which OpenAI will build and deploy at least 10 gigawatts of AI data centers with Nvidia (NVDA) systems. The chipmaker, in turn, intends to invest up to $100B in OpenAI progressively with each gigawatt deployed.
For the week, the benchmark S&P 500 index (SP500) slipped -0.3%, while the blue-chip Dow (DJI) fell -0.2%. The tech-heavy Nasdaq Composite (COMP:IND) retreated -0.7%. Read a preview of next week’s major events in Seeking Alpha’s Catalyst Watch.
Seeking Alpha’s Calls Of The Week
AAR Corp. (AIR): Strong Buy On Aerospace Aftermarket, MRO Growth.
Mid-America Apartment Communities (MAA): The Sun Will Shine Again.
I Can Confidently Say The Worst For UnitedHealth (UNH) Is Likely Over.
CarMax’s (KMX) Plunge After Weak Q2 Earnings Creates Opportunity.
Upgrading Dollar General (DG) To Buy On Potential Margin Expansion.
Coinbase (COIN): A Show-Me Story Under The New Regulatory Regime.
Micron Technology (MU) Q4 Results – Here’s Why I Sold My Entire Stake.
Rigetti Computing (RGTI) Is Interesting, But It’s Completely Overvalued.
SLVO: Bad Choice As Silver Could Surpass Its Double Top Resistance.
Alibaba (BABA): Investors Appear To Be Overestimating AI Cloud Market.
Weekly Movement
U.S. Indices
Dow -0.2% to 46,247. S&P 500 -0.3% to 6,644. Nasdaq -0.7% to 22,484. Russell 2000 -0.6% to 2,434. CBOE Volatility Index -1.0% to 15.29.
S&P 500 Sectors
Consumer Staples -1.1%. Utilities +2.8%. Financials -0.4%. Telecom -2.7%. Healthcare -0.9%. Industrials +0.1%. Information Technology +0.3%. Materials -2%. Energy +4.7%. Consumer Discretionary -1.2%. Real Estate +0.9%.
World Indices
London +0.7% to 9,285. France +0.2% to 7,871. Germany +0.4% to 23,739. Japan +0.7% to 45,355. China +0.2% to 3,828. Hong Kong -1.6% to 26,128. India -2.7% to 80,426.
Commodities and Bonds
Crude Oil WTI +4.9% to $65.72/bbl. Gold +2.8% to $3,809./oz. Natural Gas +0.5% to 3.206. Ten-Year Bond Yield -0.2 bps to 4.187.
Forex and Cryptos
EUR/USD -0.37%. USD/JPY +1.04%. GBP/USD -0.48%. Bitcoin -5%. Litecoin -8.7%. Ethereum -10.2%. XRP -6.3%.
Top S&P 500 Gainers
Intel (INTC) +20%. Teradyne (TER) +13%. Electronic Arts (EA) +12%. Halliburton (HAL) +12%. Xcel Energy (XEL) +10%.
Top S&P 500 Losers
CarMax (KMX) -23%. Freeport-McMoRan (FCX) -20%. Kenvue (KVUE) -10%. KKR & Co. (KKR) -10%. Coinbase Global (COIN) -9%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section.
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