Wall Street notches back-to-back weekly gains, market overbought in key week featuring Nvidia earnings and the latest reading from the Fed’s favorite inflation gauge. Fed Chair Jerome Powell delivered the speech from Jackson Hole investors wanted to hear on Friday. The S&P 500 and Nasdaq both recovered from Thursday’s losses, each ending the week up about 1.5%. Powell signaled that rate cuts are on the way, saying “it’s time to adjust policy.” The market is now pricing in 100 basis points, or 1 percentage point, of cuts by the end of the year. Current odds, according to the CME FedWatch tool, are a 25 basis point cut in September, a possible 50 basis point cut in November and a 25 basis point cut in December. TJX Companies was our best performing stock for the week, adding more than 6.5% after the company posted a strong fourth-quarter performance and raised its outlook. We raised our price target to $130 per share from $115, but maintained our 2 rating, meaning we want to see a pullback in the stock before considering further buying. Palo Alto Networks shares also had a strong week, up 4%. The cybersecurity leader posted strong earnings and a promising outlook after Monday’s close. We maintained our 2 rating but raised our price target to $380 from $360. Estee Lauder also reported earnings last week. However, we chose to run the stock upon seeing the release because we didn’t see the progress we needed to see in the luxury cosmetics market. Monday’s outage was preceded by the S&P Short Range Oscillator officially flipping into overbought territory. That came after Monday’s close and remained overbought all week. Since discipline calls for some selling in an overbought market, we also shorted Morgan Stanley and Abbott Laboratories on Tuesday. Club Earnings Looking ahead, earnings season continues with what may be the most anticipated release of the season coming after the close on Wednesday when Nvidia reports. NVDA YTD mountain Nvidia YTD Nvidia is set to report its fiscal second quarter of 2025 earnings. Last week, we offered some insight into Nvidia’s stock price and the general market setup as it reports. We’re happy with what Nvidia will say about its fiscal second quarter given that its biggest customers in their own earnings reports didn’t indicate any reduction in capital spending. Investors will be hyper-focused on Nvidia’s guidance for the current quarter (FY3). On the post-earnings conference call, commentary on supply and demand dynamics will also be crucial, especially with indications of a short delay to Nvidia’s next-generation Blackwell AI chip architecture. We think Blackwell’s concerns will prove largely irrelevant. Growth in services will also be a key watch as a long-term driver of further value creation. CRM YTD mountain YTD Salesforce YTD Salesforce also reported its fiscal 2025 second quarter on Wednesday evening. It was a brutal performance last time around, with sales and operating margins coming in below expectations. However, most of the enterprise software group was under pressure. Hopefully, Workday’s strong quarter late Thursday will prove to be a sign of an industry recovery. Key to Salesforce’s conference call will be management’s commentary on the pace of deal activity. On the previous quarter’s call, Salesforce COO Brian Mileham said the buying environment at the time remained “calculated” and resulted in “lengthy deal cycles, deal pressure, and high levels of budget scrutiny.” We’re looking for signs that a resilient economy is increasing business confidence — and thus the pace of deal activity. BBY YTD mountain Best Buy YTD Best Buy reports its fiscal 2025 second quarter earnings before the opening bell on Thursday. Last time around, Best Buy reported strong results. While sales were lower than expected, investors rewarded the company’s strong profitability and bought into the view that a major upgrade cycle for computers — driven by AI-powered machines — is in the works. However, we’ve seen signs that demand for AI devices may be off to a slow start. On the post-earnings call, we’ll be interested to hear how management is handling the marketing of the new technology to educate consumers about the benefits of AI-powered devices. We’re debating whether to cut back on some Best Buy before printing. Economic Data Next week also brings the government’s second look at U.S. economic growth in the second quarter and the inflation measure that Powell and his Fed colleagues have put the most weight behind. We’re nearing the end of August — and with the final week of the month comes another update on inflation. The main event on the economic front comes Friday morning, with the release of the personal consumption expenditures (PCE) price index. The headline PCE is expected to rise 2.5% year-over-year, while the core rate, excluding food and energy prices, is expected to rise 2.7%. The Fed has been aiming to get inflation back to its 2% target. Powell said on Friday that his “confidence has grown” that inflation is indeed on target. The day before the personal consumption expenditures measure, we get gross domestic product. Economists expect the second estimate of second-quarter economic growth to remain the same as the first estimate at a 3.1% annual rate. There’s also a price component to the GDP report — it’s expected to increase 2.6% on an annualized basis, the same as the last reading. Next Week August 26-30 Monday August 26 Earnings Before the Bell: PDD (PDD) Tuesday August 27 After the Bell: SentinelOne (S), Box (BOX), PVH Corp. (PVH), Nordstrom (JWN) Wednesday, August 28 Before the bell: Abercrombie & Fitch (ANF), Chewy (CHWY), Li Auto (LI), Kohl's (KSS), Bath & Body Works (BBWI), Foot Locker (FL), J.M. Smucker (SJM) After the bell: Nvidia (NVDA), Salesforce (CRM), CrowdStrike (CRWD), Affirm (AFRM), Okta (OKTA), Pure Storage (PSTG), Five Below (FIVE), HP (HPQ) Thursday, August 29 8:30 AM ET: GDP (Q2 Preliminary) 8:30 AM ET: Weekly Jobless Claims 10 AM ET: Pending Home Sales (July) Before the bell: Best Buy (BBY), Dollar General (DG), American Eagle Outfitters (AEO), Ollie's Bargain (OLLI), Campbell Soup (CPB), Burlington (BURL) After the bell: Dell Technologies (DELL), lululemon (LULU), ULTA Beauty (ULTA), Marvell (MRVL), Gap (GPS), Autodesk (ADSK), MongoDB (MDB) Friday, August 30 8:30 AM ET: PCE Price Index (July) 10 AM ET: University of Michigan Consumer Confidence (August Final) (Jim Cramer's Charitable Trust is long on NVDA, CRM, and BBY. See here for a complete list of stocks.) As a subscriber to CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust portfolio. If Jim talks about a stock on CNBC, he waits 72 hours after sending a trade alert before executing the trade. The above Investing Club information is subject to our Terms and Conditions and Privacy Policy, as well as our Disclaimer. No obligation or fiduciary duty is created or imposed by your receipt of any information provided in connection with the Investment Club. No specific result or profit is guaranteed.
A television station broadcasts a speech by U.S. Federal Reserve Chairman Jerome Powell in Jackson Hole, Wyoming, on the floor of the New York Stock Exchange (NYSE) in New York on August 23, 2024.
Angela Weiss | AFP | Getty Images
Wall Street posts back-to-back weekly gains, market overbought in key week featuring Nvidia earnings and latest reading of Fed's preferred inflation gauge.
