WS Rebel Week Ending August 23, 2024

Author

Amber Trusik
August 26, 2024

Dow Jones Industrial Average

The Dow Jones experienced a modest increase of +0.13% over the past week. It's currently trading in a bullish zone, according to data from the last options expiration date (Friday, August 16, 2024). The index remains above the 9, 50, and 200 Simple Moving Averages (SMA) as well as the 21 Exponential Moving Average (EMA). The Relative Strength Index (RSI) is above 60, signaling continued strength.

NASDAQ

The NASDAQ dipped slightly by (0.09%) week-over-week. However, it remains in a bullish zone, tapping the top of bullish zone on Friday which acted as support. The index is above the 9, 50, and 200 SMAs and the 21 EMA. Its RSI is approaching 60. The index broke ascending resistance on Thursday, August 22, 2024.

S&P 500

The S&P 500 saw a slight gain of +0.30% week-over-week. Like the Dow, it's also trading in a bullish zone and remains above the 9, 50, and 200 SMAs and 21 EMA. The RSI is slightly above 60, showing that momentum is still on the upside. The index broke ascending resistance on Thursday, August 22, 2024.

Volatility Index (VIX)

  • VIX: 15.86

Rates

  • FED Funds Rate: 5.33%

  • SOFR Rate: 5.31%

  • TRIN: 0.70

Earnings Highlights

Lowe’s (Ticker: LOW)

  • Revenue: $23.59 billion (below analyst estimates of $23.87 billion)

  • Earnings per Share (EPS): $4.10 (beating expectations of $3.97)

Key Takeaways:

  • Positive: Lowe’s exceeded EPS expectations, highlighting effective cost management.

  • Negative: A revenue miss points to pressure in consumer spending, particularly in the home improvement sector. Lowe's also lowered its full-year outlook due to economic headwinds.

Target (Ticker: TGT)

  • Revenue: $25.45 billion (slightly above estimates of $25.19 billion)

  • Earnings per Share (EPS): $2.57 (outperformed expectations of $2.18)

Key Takeaways:

  • Positive: Target’s growth in comparable sales +2% and digital sales +8.7% drove better-than-expected results, and the company raised its full-year profit outlook.

  • Negative: Inflationary pressures remain a concern, with analysts keeping a close eye on how Target navigates these challenges.

TJX (Ticker: TJX)

  • Revenue: $13.5 billion (up 6% year-over-year, above estimates)

  • Earnings per Share (EPS): $0.96 (beating expectations of $0.92)

Key Takeaways:

  • Positive: TJX showed strong growth with a +4% increase in comparable store sales and raised its full-year earnings guidance.

  • Negative: Some concerns linger about market saturation and rising compensation costs potentially squeezing future margins.

Economic Data

Mortgage Data

The average interest rate for 30-year fixed-rate mortgages dropped to 6.50%, the lowest since May 2023. However, mortgage applications fell by (10.1%) in the past week, trimming the recent surge as refinancing applications dropped by (15%), and new purchase applications declined by (5%). This dip comes despite a favorable drop in benchmark mortgage rates, showing that the demand for mortgages remains soft.

FOMC Minutes & Fed Outlook

Federal Reserve Chairman Jerome Powell hinted at a potential rate cut in September, following signs of cooling in the labor market and slowing inflation. Minutes from the latest FOMC meeting support this view, with most policymakers agreeing that easing monetary policy is on the horizon.

Jobless Claims

Unemployment claims increased by +4,000 to 232,000 for the week ending August 17th, slightly above expectations. This marks a three-week high.

Building Permits

Building permits fell by (3.3%) in July to an annual rate of 1.406 million, reflecting slower activity in the multi-family housing sector. However, single-family authorizations showed a slight increase, providing a mixed outlook for the housing market.

Upcoming Earnings

Keep an eye on these upcoming earnings reports next week:

  • Trip.com (TRIP): Monday, August 26

  • Nordstrom (JWN): Tuesday, August 27

  • Nvidia (NVDA): Wednesday, August 28

  • Salesforce (CRM): Wednesday, August 28

  • CrowdStrike (CRWD): Wednesday, August 28

  • Dell (DELL): Thursday, August 29

  • Campbell Soup (CPB): Thursday, August 29

Sources:

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