U.S. stocks could continue to push higher as traders factor in a boost from Nvidia Corp.’s NVDA quarterly results. The index futures were modestly higher in early trading. The durable goods orders report that is scheduled to be released ahead of the market could be sifted by traders to confirm their hopes for a soft landing. They might also look forward to a speech by a Fed official later in the day.
A key inflation measure that the Federal Reserve considers to be important is imminent, and traders may choose to remain cautious ahead of the data. Despite Nvidia’s strong gains, the FOMO fear could drive traders toward the stock as they seek to partake in the potential post-earnings gain.
| Futures | Performance (+/-) |
| Nasdaq 100 | +0.21% |
| S&P 500 | +0.16% |
| Dow | +0.04% |
| R2K | +0.61% |
In premarket trading on Monday, the SPDR S&P 500 ETF Trust SPY climbed 0.20% to $563.25, and the Invesco QQQ ETF QQQ gained 0.25% to $481.21, according to Benzinga Pro data.
Cues From Last Week:
Wall Street extended its winning run to two straight weeks, as weak economic data and dovish Fed comments that nearly cemented the fate of a September rate cut brought buyers into the market. That said, the market witnessed intermittent volatility, primarily a result of profit-taking following the recent strong gains.
Fed Chair Jerome Powell dispelled doubts that lingered among some quarters by stating at his Jackson Hole address that the central bank may be ready for rate cuts.
The S&P 500 and the Dow Industrials ended at their highest levels since mid-July and traded just shy of their all-time highs. Small-caps outperformed last week, with the Russell 2,000 Index posting a weekly gain of 3.59% and ending at its highest level in about three weeks.
| Index | Week’s Performance (+/) | Value |
| Nasdaq Composite | +1.40% | 17,877.79 |
| S&P 500 Index | +1.45% | 5,634.61 |
| Dow Industrials | +1.27% | 41,175.08 |
| Russell 2000 | +3.59% | 2,218.70 |
Insights From Analysts:
Following Powell’s Jackson Hole address, fund manager Louis Navellier said, “It looks like we’re going to have at least three rate cuts this year, which will be on September 18th, on November 7th two days after the election, and on December 18th. “The Fed is going to get closer to market rates, and that is very positive,” he added.
The fund managers listed the following as key catalysts that could be supportive of further gains:
- Nvidia’s earnings are due Wednesday, Aug. 28, with Navellier calling for phenomenal guidance from the company
- The price consumption expenditure reading of the personal income and spending report, due Aug. 30; the fund manager expects it to be highly favorable.
- Pre-holiday optimism ahead of Labor Day and some consolidation after the event
- Sept. 10 presidential debate
- Sept. 15 quarterly tax filing deadline; Navellier attributed the recent market softness to people selling stocks to pay tax.
- Sept. 18 Fed rate cut and accompanying dovish statement as well as a new dot-plot which will likely show Fed officials’ forecast for rate cuts for the rest of the year and the next
Carson Group’s Ryan Detrick said on Friday, that the advancing volume outdid declining volume by 11 times on the New York Stock Exchange. This was the most since Oct. 17, 2022, the lows of the bear market, he said, adding that since 1979, there were 47 times when advancing volume was 10 times more than declining volume.
“Higher a [year] later 85% of time and up nearly 13% on [average],” Detrick said.
Upcoming Economic Data
The July personal income and spending report that also comprises the Fed’s favorite inflation gauge – the core rate of personal consumption expenditure, the weekly jobless claims report and a few Fed speeches are among the key Main Street catalysts due this week.
Traders may also keep an eye on the preliminary second-quarter GDP data, the July durables goods orders report, two separate consumer confidence readings and the results of a regional manufacturing survey. A handful of housing market data also are due for the week.
On Monday, the Commerce Department will release the durable goods orders report at 8:30 a.m. EDT. Economists, on average, expect durable goods orders growth of 4% month-over-month, reversing June’s 6.7% drop. Core durable goods orders, which strip off the volatile transportation orders, may have remained unchanged in July following a 0.4% increase in June.
The Treasury is set to auction three and six-month notes at 11:30 a.m. EDT.
San Francisco Fed President Mary Daly is scheduled to do a TV interview at 2 p.m. EDT.
See Also: How To Trade Futures
Stocks In Focus:
- Nvidia rose about a percent in premarket trading ahead of the company’s results.
- XPeng, Inc. XPEV jumped over 5% following the company’s CEO Xiaopeng He boosting his stake in the company.
- PDD Holdings Inc. PDD, a holding company of Pinduoduo, is scheduled to report its financial results before the market opens, while HEICO Corporation HEI will report after the close.
Commodities, Bonds And Global Equity Markets:
Crude oil futures are advanced over 1%, with the WTI-grade crude oil trading above $75-a-barrel level, and gold futures rose modestly. Bitcoin BTC/USD eased and yet traded firmly above the $63.5K level. The yield on the 10-year Treasury note fell 2.3 basis points to 3.784%.
Most Asian markets advanced on Monday, as Wall Street’s stellar performance last week amid rate-cut hopes catalyzed a rally in the region. The Japanese market pulled back, dragged by the yen’s strength. South Korea’s Kospi also ended lower for the day.
European stocks showed tentativeness in early trading.
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