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On Friday, stocks wrapped up with weekly losses, extending Wall Street's challenging month of August. The Dow Jones Industrial Average Index is down 2.2% this month, marking its steepest decline since March. The S&P 500 experienced a drop of 2.1%, recording losses for the third consecutive week, a pattern not seen since February.
The Nasdaq Composite also fell by approximately 2.6%, its third back-to-back weekly decline, a sequence not observed since December.
In a CNBC interview, Michelle Cluver, a senior portfolio strategist at Global X ETFs, remarked, “It appears the markets are reassessing the earlier optimism of July. While we still witness economic growth, there's rising uncertainty regarding the potential increase in interest rates, leading to increased focus on longer-duration yields.”
Following the release of the Federal Reserve’s July meeting minutes, which hinted at possible upcoming rate hikes due to persistent inflation worries, the 10-year U.S. Treasury yield reached its peak since October 2022 on Thursday. However, on Friday, the yields retreated slightly, with the 10-year Treasury rate settling around 4.25%, down by approximately five basis points.
Zoom and Nvidia forecast to report earnings
In the upcoming week, retailers such as Dollar Tree (NASDAQ: DLTR), Macy’s (NYSE: M) , and Lowe’s (NYSE: LOW) are scheduled to report quarterly results, providing insights into consumer spending patterns. Based on the major retailers that have reported quarterly earnings, about 79% surpassed earnings predictions, while 64% beat revenue forecasts, as per Refinitiv data.
Moreover, tech companies such as Zoom Video (NASDAQ: ZM) and Nvidia (NASDAQ: NVDA) will also report results. Analysts tracking Zoom Video expect sales to rise by 1.4% to $1.11 billion in fiscal Q2 of 2024 (ended in July). Comparatively, earnings per share are forecast to remain flat at $1.05. Zoom Video has seen top-line growth decelerate significantly in recent quarters as economies have reopened following COVID-19. ZM stock is currently trading 88% below all-time highs.
Semiconductor giant Nvidia is rising the AI wave as the stock has tripled year-to-date. It is on track to report revenue of $11.17 billion, an increase of 66.7% year over year, while earnings are forecast to rise 300% to $2.07 per share.
Economist set to meet at Jackson Hole
The three-day Jackson Hole Economic Symposium will commence this week. An annual event organized by the Kansas City Fed since 1981, the symposium is a gathering for central bankers, finance officials, economists, and scholars worldwide to deliberate on pressing economic topics.
The theme for this year, “Structural Shifts in the World Economy,” will likely center on strategies for central banks to navigate economies out of recession, especially after having escalated interest rates to a level unseen in over two decades.
Home sales overview
On Tuesday, the National Association of Realtors (NAR) is scheduled to release data on existing home sales. These sales are predicted to have marginally decreased to 4.15 million units in the previous month, down from 4.16 million in June.
The surge in mortgage rates to a peak not seen in 21 years, combined with a revival in home prices since February, likely dampened sales due to reduced affordability. However, sales of new homes are anticipated to have increased, possibly reaching 701,000, up from 697,000 in June.
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