After a dizzying week centered on mixed retail earnings, rising bond yields, and a surprise intervention from the Treasury Department, investors step into another action-packed five-day stretch. The president plans to unveil an economic battle plan against Iran, AI kingpin Nvidia (NVDA) will report earnings to punctuate Big Tech’s quarter, and all-important inflation data will arrive to steer the Fed on its next rate-setting journey. Economists and central bankers will huddle at the Jackson Hole Symposium, too.
The S&P 500 (^GSPC) closed out Friday up 0.4% for a loss of 1.4% on the week. The Dow (^DJI) rose 1% to close the week on a loss of 0.9%. And the Nasdaq (^IXIC) increased 0.4% but shed 2% on the week.
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Retailers across the budget spectrum will continue the stretch of earnings offering insight into the American consumer. DICK’S Sporting Goods (DKS) will report on Tuesday, followed by Five Below (FIVE), Urban Outfitters (URBN), and Bath & Body Works (BBWI) on Wednesday. Ulta Beauty (ULTA) will share results on Thursday after major retailers last week spotlighted beauty as a growth center. And Dollar General (DG) and Dollar Tree (DLTR) will shed light on how strongly middle- and higher-income Americans are trading down and hunting for bargains. But perhaps the most attention will land on Nvidia, reporting on Wednesday, in a test of the comeback AI trade.
The economic data front is just as busy. The Chicago Fed will kick the week off delivering the national activity index. Tuesday will feature the Conference Board’s consumer confidence surveys. And then all eyes will turn to the Fed’s preferred inflation gauge, the PCE price index, on Wednesday, helping to define which way the central bank will go at its next policy meeting in September. The University of Michigan’s consumer surveys on inflation expectations and the broader economy will round out the week.
Nvidia tests the AI trade and its own narrative
The last of the “Magnificent Seven” is set to report on Wednesday in what amounts to a test of the once flagging but now resurgent AI trade.
Looking around at this quarter’s earnings for the other tech giants revealed mixed results. While Microsoft (MSFT) and Amazon (AMZN) helped calm some fears about the prospect of AI investments failing to pan out, Meta (META) and Google (GOOG, GOOGL) re-sparked lingering worries about increased spending. But much of that spending flows to Nvidia, which sits at a unique and enviable position atop the AI trade.
Nvidia’s challenge as a stock stems from its own success, of exceedingly high expectations and a valuation that seems to have already maxed out bullish narratives of AI expansion.
