NVDA exceeded expectations but is still down 6%. There are still opportunities, but be cautious heading into September.

MOTIVATION
Quote of the week

"Artificial intelligence is not a substitute for human intelligence, but rather an extension of it."

- Ginni Rometty-

Week of 26/08/2024
What You Need to Know This Week

• September is historically the weakest month of the year on average since 1948, with February being the second worst.

• There is a 76% chance of a 0.25% rate cut in September and a 24% chance of a 0.5% cut.

• The annualized GDP for Q2 was 3%, surpassing the previous estimate of 2.8%, driven by consumer spending.

• The Dow Jones reached an all-time high (ATH) after investors moved away from Nvidia following its report.

• Nvidia experienced declines of up to 6% despite beating estimates.

• US Treasuries have risen 1.7% so far this month, on track for the best increase in three years.

• The PCE index (the preferred gauge of inflation) rose 0.2% in July as expected, with an annual increase of 2.5%.

• Inflation in the Eurozone has dropped to 2.2%, aided by lower energy costs. Rate cuts may be on the table in September.

26/08/2024
Reflection on What Happened and What Could Happen

This week, the market showcased a mixed scenario with several key events. September, historically the weakest month of the year, started with strong attention on the potential rate cuts, with a 76% probability of a 0.25% reduction and a 24% chance of a 0.5% cut. The annualized GDP for Q2 exceeded expectations, reaching 3%, driven by consumer spending. The Dow Jones hit all-time highs while Nvidia suffered a 6% decline despite beating estimates, indicating a rotation in the market. US Treasuries rose 1.7% for the month, heading towards their best performance in three years. In Europe, inflation fell to 2.2%, fueling speculation of a rate cut in the Eurozone. The PCE index in the US also remained in line with expectations, increasing by 0.2% in July.

Looking ahead, it will be crucial to monitor how these factors interact as we navigate through September, especially with the potential for significant market shifts based on economic data and central bank decisions.

Despite September's historical reputation as a poor month, I wouldn't let that deter me. The SPY seems poised to break new highs, and both the monthly and weekly charts appear bullish. We'll have to see how things unfold and whether historical trends outweigh technical developments.

Economic Calendar 02/09/2024
Economic Events

Monday, September 2, 2024

Tuesday, September 3, 2024

Wednesday, September 4, 2024

Thursday, September 5, 2024

Friday, September 6, 2024

Random
Random fact of the week

Did you know that the first artificial intelligence program was created in 1951? It was a chess program developed by Christopher Strachey, who later became the director of the Computing Laboratory at the University of Oxford.

Art
Ilustration of the week