Last Week
“The Shifting balance of risks may warrant adjusting our policy stance,” said Federal Reserve Chair Jerome Powell on Friday at the annual Jackson Hole Economic Policy Symposium. Traders translated that to mean “we are lowering the fed funds rate at the upcoming September meeting,” sparking a big rally that erased the losses from earlier in the week and allowed stocks to eke out gains for the week.
Small caps were the biggest winners, with the Russell 2000 surging 3.3%. We believe that terrific bargains are still abundant in small caps. Please get in touch with us at info@nsinvest.com if you are interested in information about our proprietary small-cap strategies that we have developed over the last 25 years. It was a more difficult week for Tech stocks and retailers. The Nasdaq Composite slipped 0.6%, led by declines in the “Magnificent 7”, while the S&P 500 inched up 0.3%. Disappointing results from Walmart and Target sent shares of the major retailers lower and might have provided an early look at what entities will share in the tariff-induced pain.
Advancing issues almost quadrupled declining issues, with the Oil & Gas sector topping the leaderboard. The Dollar was flat, while Crude Oil and Gold moved slightly higher. The yield on the 10-year Treasury dipped 7 basis points to 4.26%, while the yield on the 2-year Treasury dropped 10 basis points to 3.68%.
It was a better week on the Chicago Sports Scene, with the Bears overcoming a 17-point deficit to defeat the Chiefs in Kansas City in their final preseason game. Bear Down! Meanwhile, the Cubs are looking better, winning a series with the Brewers at the friendly confines of Wrigley Field before traveling west for a series with the Angels. For Sox and Sky fans (like us), the future is bound to be brighter.
This Week
There will be a few important earnings reports, most notably Nvidia’s on Wednesday, and a slew of retailers’ results midweek.
Stock traders should circle Friday on their calendars, as the Bureau of Economic Analysis will release the personal consumption expenditures price index for July. Analysts expect the core PCE to show a 2.9% increase year-over-year. Too hot a number could call back into question the rate action at the upcoming September FOMC meeting, and rain on investors’ Labor Day BBQs. A soft reading, on the other hand, will get the parties started early.
The stocks mentioned above may be holdings in our mutual funds. For more information, please visit www.nsinvest.com.