Last week, Wall Street recorded back-to-back weekly gains, fueled by Federal Reserve Chairman Jerome Powell’s speech indicating interest rate cuts. The S&P 500 and Nasdaq both rose nearly 1.5% for the week. The market now anticipates 100 basis points of cuts by year-end, with a 25-basis-point cut in September, a possible 50-basis-point cut in November, and another 25-basis-point cut in December. This positive market sentiment was reflected in stocks like TJX Companies and Palo Alto Networks, which saw strong gains. However, Estee Lauder did not meet expectations, resulting in the stock being removed from portfolios.
TJX Companies was the top-performing stock of the week, rising over 6.5% after a strong earnings report. Price targets were adjusted, but further purchases are contingent on a share price pullback. Palo Alto Networks also had a good week, gaining 4% after delivering solid earnings. On the other hand, Estee Lauder’s earnings fell short, leading to a decision to remove the stock. Moving forward, Nvidia is expected to report its earnings, and market watchers are keen to see guidance for the current quarter.
In the coming days, Nvidia, Salesforce, and Best Buy are set to report their earnings for the second quarter. Analysts are particularly interested in Nvidia’s guidance for fiscal Q3, as well as insights into supply and demand dynamics. Salesforce, which struggled last quarter, is expected to provide updates on deal activity and business confidence. Best Buy, on the other hand, will focus on marketing AI technology to drive consumer adoption.
The upcoming week also brings key economic releases, including the second estimate of Q2 economic growth and the PCE price index. Analysts expect the GDP growth rate to remain stable at 3.1%, with the PCE index showing a 2.5% increase in headline prices and a 2.7% rise in core prices. Powell expressed confidence in inflation trending towards the Fed’s 2% target. GDP data and PCE price index will be closely watched for insights into the economy’s health and inflation trends.
The week ahead includes earnings reports from companies like Box, PVH Corp, Nordstrom, Chewy, and HP, among others. Economic releases to watch include the GDP preliminary report and the PCE price index. Overall, the market will be keeping a close eye on both earnings reports and economic data to gauge the trajectory of the economy and market sentiment.
Wall Street’s recent gains and Powell’s dovish remarks have set a positive tone for the market. While individual stocks have had mixed performances, upcoming earnings reports and economic data releases will provide further insight into market trends and potential opportunities for investors. It remains crucial for investors to monitor key events and data points to make informed decisions in the ever-changing market landscape.
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