Daily Market Report August 28th, 2024
After being lower by more than 100 points around mid-day, the Dow turned positive at the close and ended at a new record high of 9 to 41,259 led by gains in HON, TRV and V. This was its eighth higher day in a row during what is not usually a good month for stocks.
The S&P, which was also lower mid-day as well, was able to chug along and ended higher by 9 to 5626 as some of the large-cap tech stocks did better, such as the closely watched NVDA, whose big event is this afternoon in addition to AAPL, which continues to grind higher from its recent lows earlier this month. The index is now only 0.8% away from its all-time high reached in early July.
The Nasdaq also did well with a 29 point gain to 17,754 also led by some of the large technology stocks while the Russell 2000 slipped back a bit by 15 to 2202, so this rotation between the larger ones and smaller ones appears to be continuing on an almost daily basis.
Meanwhile the VIX edged back down to 15.43 after having risen a bit the prior couple of days.
The recent upside motivation was the speech by Fed Chairman Powell that interest rates are finally coming down at the September 18th meeting and then there are questions about the health of the consumer and to whether the stock valuations for big tech growth companies like NVDA have become overblown relative to companies’ prospects for future growth. This report will be the elephant in the room for the market.
The market got some positive economic data to mull over Tuesday as the August Consumer Confidence report rose to 103.3 which was the highest since February. Consumer spending accounts for nearly 70% of U.S. economic activity. That has been a strong area of the economy, along with the jobs market.
HAIN jumped by 19% after the company’s fiscal profit topped estimates. TRIP climbed 9% after its second-quarter earnings beat analysts’ forecasts and the company touted strong travel demand.
The parent company of the PARA movie studio slid 7% after Edgar Bronfman Jr., the former head of Warner Music Group, abandoned his bid for the company, clearing the way for it to be acquired by the media company Skydance.
Inflation has been falling steadily over the past two years after the central bank raised its benchmark rate to its highest level in two decades. The economy has persevered through both inflation and higher borrowing rates, bringing the Fed closer to its goal of taming inflation without pushing the economy into a recession.
Traders expect the Fed to start cutting its main interest rate at its next meeting in September, with up to a 1% reduction by the end of the year.
European markets mostly rose, and Asian markets were mixed.
The second-quarter earnings season finally comes to an end this week with more retailers reporting, plus the big one on Wednesday afternoon. The lineup is as follows: yesterday – HAIN, TRIP higher; today – PVH, SJM, FL, ANF lower and BOX. KSS and JWN higher; tonight - CHWY, CRWD, FIVE, HPQ, NTAP, OKTA, and Dow component CRM and a company that begins with an N and ends in A; Thursday – ADSK, BBY, DELL, DG, GPS, MBD, ULTA.
Economic reports will have: yesterday – August consumer confidence rose to 103.3 which was the highest since February, June CaseShiller Home Price Index rose by 0.2%, higher for five straight months and up 5.4% year over year which was a record high; Thursday – weekly jobless claims, next reading on 2Q G.D.P.; Friday – July personal income and spending, final August U. of Michigan Consumer Spending estimate and then the big one here, namely the July P.C.E. beloved by the Federal Reserve.
By Don Selkin