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Markets Up Second-Straight Day; Lots of Data On Deck
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We reach the closing bell in this first trading day of a new week in the green. While off session highs, the four major indices closed higher for the second day in a row: the Dow was +220 points, +0.64%, while the Nasdaq was +115, +0.85%. The S&P 500 grew +0.63% for the session, while the small-cap Russell 2000 was +0.81%. All indices are up over the past week of trading, though are still underwater for the past month, from -2.8% on the Dow to -6.7% on the Russell.
Plenty of what we’ve seen transpire in terms of market sentiment has to do with overall valuations: when the A.I. hype heated up tech trading in June, and this spread to a wider-ranging rally by July, analysts noted we were getting ahead of ourselves. Of course, this is all relative; six months ago or more half the analysts thought we’d either be approaching a recession by now or fully in one. Not only do we not see an economic pullback, but GDPNow has ticked up its projection for Q3 growth to +5.9% from +5.8%.
Speaking of GDP, a first revision on Q2 is out mid-week, largely expected to be in-line with the initial +2.4% print originally issued. This itself is an improvement from the +2.0% reported in the final revision for Q1. Considering we are currently riding the highest Fed funds rate in 22 years. But higher GDP growth expected on the horizon may beckon the Fed to continue raising rates in order to more fully curb inflation momentum.
Such is the current trading environment, here in traditionally low-volume late August. The good thing about this week, however, is that we’ll get a good look at lots of impactful economic data this week, including a fresh Employment Situation report Friday morning from the federal government. Also private-sector payrolls from ADP (ADP - Free Report) mid-week are out, as well as a new Job Openings and Labor Turnover Survey (JOLTS) report tomorrow morning at 10am (although JOLTS data is from July, whereas monthly jobs numbers will be for August.
Back to the stock market for a moment, year-to-date we’re still up nearly +32% on the tech (and A.I.)-heavy Nasdaq, and +16% on the S&P, which holds many of these top stocks as well. Where we’ve seen slack is on the blue-chip Dow index — today being sandbagged by Merck (MRK - Free Report) and Johnson & Johnson (JNJ - Free Report) , but in times past by fixtures like Verizon (VZ - Free Report) and Chevron (CVX - Free Report) , which are down -16% and -7.9% year to date, respectively.
Tomorrow morning, Best Buy (BBY - Free Report) will give us another look at the retail industry in late Q2 reporting, when the Zacks Rank #2 (Buy)-rated electronics and home products big-box store comes out with quarterly results. Expectations are for both earnings and sales to be down year over year, -31.2% and -7.8%, respectively, with comps expected -7% — as we’ve seen (and expected) elsewhere in Retail this quarter. But the company has a good recent history of posting positive earnings surprises, up in each of the past four quarters, for an average +21% beat per quarter. For more on BBY's pending earnings, click here.
Image: Bigstock
Markets Up Second-Straight Day; Lots of Data On Deck
We reach the closing bell in this first trading day of a new week in the green. While off session highs, the four major indices closed higher for the second day in a row: the Dow was +220 points, +0.64%, while the Nasdaq was +115, +0.85%. The S&P 500 grew +0.63% for the session, while the small-cap Russell 2000 was +0.81%. All indices are up over the past week of trading, though are still underwater for the past month, from -2.8% on the Dow to -6.7% on the Russell.
Plenty of what we’ve seen transpire in terms of market sentiment has to do with overall valuations: when the A.I. hype heated up tech trading in June, and this spread to a wider-ranging rally by July, analysts noted we were getting ahead of ourselves. Of course, this is all relative; six months ago or more half the analysts thought we’d either be approaching a recession by now or fully in one. Not only do we not see an economic pullback, but GDPNow has ticked up its projection for Q3 growth to +5.9% from +5.8%.
Speaking of GDP, a first revision on Q2 is out mid-week, largely expected to be in-line with the initial +2.4% print originally issued. This itself is an improvement from the +2.0% reported in the final revision for Q1. Considering we are currently riding the highest Fed funds rate in 22 years. But higher GDP growth expected on the horizon may beckon the Fed to continue raising rates in order to more fully curb inflation momentum.
Such is the current trading environment, here in traditionally low-volume late August. The good thing about this week, however, is that we’ll get a good look at lots of impactful economic data this week, including a fresh Employment Situation report Friday morning from the federal government. Also private-sector payrolls from ADP (ADP - Free Report) mid-week are out, as well as a new Job Openings and Labor Turnover Survey (JOLTS) report tomorrow morning at 10am (although JOLTS data is from July, whereas monthly jobs numbers will be for August.
Back to the stock market for a moment, year-to-date we’re still up nearly +32% on the tech (and A.I.)-heavy Nasdaq, and +16% on the S&P, which holds many of these top stocks as well. Where we’ve seen slack is on the blue-chip Dow index — today being sandbagged by Merck (MRK - Free Report) and Johnson & Johnson (JNJ - Free Report) , but in times past by fixtures like Verizon (VZ - Free Report) and Chevron (CVX - Free Report) , which are down -16% and -7.9% year to date, respectively.
Tomorrow morning, Best Buy (BBY - Free Report) will give us another look at the retail industry in late Q2 reporting, when the Zacks Rank #2 (Buy)-rated electronics and home products big-box store comes out with quarterly results. Expectations are for both earnings and sales to be down year over year, -31.2% and -7.8%, respectively, with comps expected -7% — as we’ve seen (and expected) elsewhere in Retail this quarter. But the company has a good recent history of posting positive earnings surprises, up in each of the past four quarters, for an average +21% beat per quarter. For more on BBY's pending earnings, click here.
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