As markets typically experience low volume during the last week of August, investors are faced with a number of key decisions that need to be made. Federal Reserve Chair Jerome Powell’s recent speech and Nvidia’s upcoming earnings announcement are topics that have dominated discussions in the financial world.
Callie Cox from Ritholtz Wealth Management shared insights on Fed cutting cycles, highlighting that there have been 18 such cycles since 1970, with 11 categorized as “desperation” and seven as “celebratory”. Cox mentioned that the current situation falls under the “celebratory” category, which is positive news for investors. She emphasized that while the job market may be slowing down, there is no crisis mode yet. This indicates that the Fed is cutting rates on its own terms, providing some breathing room to support economic expansion.
Kevin Mahn, President, and Chief Investment Officer of Hennion & Walsh Asset Management, brought attention to Nvidia’s upcoming earnings report as a potential market inflection point, particularly for the AI trade. Mahn expressed confidence in Nvidia’s ability to influence investor sentiment and shape the outlook for AI investing. He mentioned Nvidia’s pivotal role in the AI ecosystem and the impact its earnings could have on the broader market.
Stock Picks for the Week
Delano Saporu from New Street Advisors recommended Walmart (WMT) as a defensive pick for investors concerned about seasonal volatility in September. Mahn suggested that Nvidia’s earnings could boost the tech sector and the AI trade, highlighting Broadcom (AVGO) and ServiceNow (NOW) as adopters, and Digital Realty Trust and Vertiv Holdings as enablers.
According to a report from the Financial Times, top private equity firms have refrained from investing in China this year. Dewardric McNeal of Longview Global pointed out that the Chinese government’s reliance on monetary policy actions and short-term rate adjustments has failed to instill confidence among investors and consumers. McNeal dismissed the possibility of a significant fiscal stimulus, often referred to as “the bazooka option,” as Chinese Premier Xi Jinping views it as welfarism and the country’s high debt levels make it an unlikely scenario. Discussions around a potential “bazooka” stimulus should be avoided as the reality suggests otherwise.
The freight and logistics index is commonly regarded as a leading economic indicator, reflecting the trends and movements in the transportation and supply chain sectors. Keeping an eye on this index can provide valuable insights into the overall economic health and performance of various industries.
Overall, the discussions on CNBC’s “Worldwide Exchange” shed light on various aspects of the financial landscape, from Fed decisions to stock picks and market sentiment. Investors and analysts are closely monitoring these developments to stay informed and make well-informed decisions in the ever-evolving world of finance.