The S&P 500 ($SPX) (SPY) had a rough week last week finishing down over 2%. But that does not tell the whole story of the week. We had TJX companies (TJX) report and rally but they continued the theme of the quarter on revising guidance lower for future quarters. We also had Nvidia (NVDA) rally 6% on the week. Between earnings and news, it was a great week to trade.
This week we again have the excitement and opportunity of earnings plays, but we also have the Jackson Hole Symposium where monetary policy is discussed. In addition, we have the usual monthly news releases to create some volatility in the market. Here are 5 things to watch in the market this week.
Earnings
We still have some earnings releases on tap this week. In fact, it's a huge week for some commonly traded companies like Zoom (ZM), Nvidia (NVDA), Lowes (LOW), and Snowflake (SNOW). These are all towards the beginning of the week though, and earnings start to slowly calm down as the week progresses. Much like the reports last week, keeping an eye on Lowe’s could provide some insight into the economic activity around homeownership, which historically is a pretty large piece of the US economic engine. So if they revise lower as well, it could weigh on the markets. NVDA could be a great stock to look at as well given all the AI talk lately. They have a near corner on the market for GPUs used in LLMs and Artificial intelligence. Finally, as most of the US has to return to in-office work, it will be interesting to see how that affects Zoom’s earnings. Keeping an eye on guidance there could offer valuable insight into if “work from home is here to stay.
Existing Home Sales
Tuesday at 10 am Eastern Existing Home sales are due out. This is the annualized number of homes sold in the month. Given the current state of inventory of existing homes in the US, even if this is a miss it's possible the market sees it as a positive. With both rates and prices high, inventory is still not expanding very rapidly. If this is a beat, it's possible the market views it as a negative due to the fact even more inventory would have come off the market, and that could mean more tightening in the Fed's future.
PMI’s
Both manufacturing and services PMI are due Wednesday at 9:45 AM. These surveys measure business conditions in the 2 parts of our economy. If there is a continued expansion in either or both parts of the economy then it's possible the market reacts negatively and continues the selling pressure felt last week. If these are misses and show a contraction then it's possible the market rallies on the hopes of less tightening in the future.
Jackson Hole Symposium
The Jackson Hole Symposium is set to start Thursday this week. It is a meeting of various academics, heads of banks, and central bankers to discuss monetary policy and financial markets. These meetings are all closed to the press, but members often talk to reporters between meetings and on breaks. These interviews have the potential to create some significant volatility as they can foreshadow future monetary policy.
Revised UoM Sentiment
Finally, on Friday this week, we have the Revised University of Michigan Sentiment released. This gives further insight into how Americans view the economy and their financial prospects for the near future. This report could move the market, but it is often used more as an indicator of things to come in the economy. There is also the fact that this is telling a diverging story from most other indicators. Over the past several months UoM sentiment has been increasing pretty steadily, but other indicators like excess saving, credit card debt, and earnings guidance have been painting a different picture.
Best of luck this week and don’t forget to check out my daily options article.
On the date of publication, Gavin McMaster did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
