- Morning Briefing w/ KevinD
- Posts
- Monday August 26 @ 9:00am
Monday August 26 @ 9:00am
Stocks mostly higher to start a busy week amid renewed Middle-East tensions
KevinD
August 26, 2024
“The time has come for policy to adjust,”
📈 The Markets Overnight
🌏 Asia: Mostly higher
🌍 Europe: Mostly up a bit
🌎 US Index Futures: Mostly up
🛢 Crude Oil: Up strongly
🪙 Gold: Up
🧐 Yields: Down
💵 Dollar: Up a bit
🔮 Crypto: Down
🌏 Major Global Catalysts
Israel launches large scale attack on Hezbollah in Lebanon. (link)
💵 Economic Reports and Events Today
8:30am Core Durable Goods Orders m/m: 0.1% expected, -0.2% reported, 0.4% previous. Report measuring the change in the total value of new orders for long-lasting goods, excluding transportation items. (link)
8:30am Durable Goods Orders m/m: 3.8% expected, 9.9% reported, -6.7% previous. Report showing the change in the total value of new orders for long-lasting goods, reflecting manufacturing activity. (link)
📰 Selected Earnings Releases
Consensus Estimates shown
After Hours Today:
Pre-Market Tomorrow:
🔮 Selected Analyst Ratings Changes
AMH American Homes 4 Rent: Wells Fargo Upgrades to Overweight, Raises Target to $42.00
BJ BJ's Wholesale Club: JP Morgan Upgrades to Neutral, Raises Target to $78.00
OLLI Ollie's Bargain Outlet: Gordon Haskett Upgrades to Buy, Raises Target to $107.00
PBR Petrobras Brasileiro: Morgan Stanley Upgrades to Overweight, Raises Target to $20.00
XEL Xcel Energy: Argus Research Upgrades to Buy, Announces Target of $68.00
📉 Stocks In Play
PDD PDD Holdings: Down 18% after the company missed on revenue, warned of slowing growth citing increased competition, and reported a 48% increase in sales and marketing expenses. Peers JD, BILI, BABA are down 3% - 4% in sympathy. (link)
SEDG SolarEdge Technologies: Up 6% as the company announces a shakeup in the C-suite including the CEO and CFO. (link)
XPEV XPeng: Up 4% after the company's CEO reports a $13.5M share purchase. (link)
BA Boeing: Down 1% after NASA, citing safety concerns, announced that two astronauts delivered to the ISS on a Boeing spacecraft will return via a SpaceX Dragon capsule. (link)
DQ Daqo New Energy: Down 7% on an earnings miss. (link)
💬 Commentary
The market rallied on Friday after Jay Powell effectively confirmed the start of a rate-cutting cycle is coming at the September FOMC meeting. Interest-sensitive sectors and industries such as home builders, building materials, solar, and cruise lines led the charge, with equal-weight versions of the large-cap indices also outperforming. SPY and QQQ each rose by 1.1%, while the risk-on sentiment drove small caps significantly higher, with IWM surging an impressive 3.2%.
All major sectors closed in the green, with REITs and consumer discretionary leading the gains, both up nearly 2%. On the other hand, defensive sectors like staples and utilities lagged behind, posting modest gains of only 0.3%. This broad-based rally reflects the market's confidence in the Fed's anticipated easing, setting a positive tone as traders look ahead to the next phase of monetary policy.
The economic calendar is relatively light this week, but a few key releases could still influence market direction. This morning's durable goods orders kicked things off, followed by tomorrow's consumer confidence report. On Thursday, unemployment claims are due alongside the second estimate of Q2 GDP, both of which will be closely watched. However, the most critical release comes on Friday with the Personal Consumption Expenditures (PCE) index, the Fed's favored measure of inflation.
Earnings season is still in full swing, with several notable companies reporting. This week includes some of the largest Canadian banks, numerous clothing brands like Abercrombie & Fitch, American Eagle, and Lululemon. Best Buy and Dell are set to report on Thursday, but the main event will be Wednesday, when NVIDIA, CrowdStrike, and Salesforce release their earnings after the close. These reports, particularly from NVIDIA, will likely garner significant attention given their potential impact on the tech sector.
Markets are mixed this morning, with the Nasdaq pulling back while IWM outperforms, bolstered by a sharp rise in oil prices due to heightened Middle East tensions. The week before Labor Day is typically one of the lowest-volume weeks of the year, which can often lead to increased volatility as liquidity dries up. As a result, a bit of extra caution may be warranted, particularly with Friday’s PCE report on the horizon.
⛵ When you’re ready…
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