Victor Alejandro Copado Silva on LinkedIn: Gold Prices Set New Record on U.S. Rate-Cut Hopes, Geopolitical Concerns (2024)

HISTORY SHOWS INVESTORS SHOULD KEEP A TIGHT LEASH ON RISK, ONCE THE FED CUTS RATES, STRATEGIC SAY -MARKETWATCH AUG 16TH 2024.Critical information for the U.S. trading dayByJamie ChisholmLast Updated:Aug. 16, 2024 at 9:06 a.m. ET U.S. Federal Reserve Chairman Jerome Powell speaks during a news conference after a Federal Open Market Committee meeting at the Federal Reserve in Washington, DC, on July 31, 2024. A rate cut is expected in September, but how should traders react?Referenced SymbolsSPX ,0.20%,VIX ,-2.82%,ES00, 0.23%,YM00,0.30% ,NQ00,0.12% ,TMUBMUSD10Y, 3.885%,DXY ,-0.56%,CL.1-1.98%,,GC00, 2.16%, AMAT,-1.86%,HRB, 12.11%,It’s expected that a week from today, Federal Reserve Chair Jerome Powell will use his Jackson Hole speech to signal that the central bank is very likely to trim borrowing costs after its policy meeting on September 18.Recall, that only about 10 days ago some market observers were arguing for an intra-meeting emergency 50 basis point rate cut as a U.S. growth scare contributed to a plunge in global stocks.That wobble seems to be over. Now a 25 basis point September cut from the Fed is considered much more likely by markets. In response, the S&P 500SPX0.20%has just registered a six-day winning streak of 6.6%, while the CBOE VIXVIX-2.82%around 15, below its long-term average of 19.5.But with the stock market already once again not far off its highs, some investors may be asking whether they should sell stocks at the first rate cut and adopt a defensive posture, notes Salvatore Ruscitti, U.S. equity strategist at MRB Partners.“The answer depends on the reasons for the rate cuts and the outlook for the economy,” .“History is very clear,” writes Ruscitti. “In instances where the initiation of Fed easing was followed by the onset of a recession (i.e. July 1990, January 2001, and September 2007), stock prices were lower 3 and 6 months after the first rate cut.”In contrast, when the first rate cut did not precede a recession, in July 1996, September 1998, and August 2019, investors saw good returns over the following months.An outlier are the gains seen when rates were cut at the outbreak of COVID, “but the pandemic-driven economic downturn was unique in its magnitude, brevity, and the massive policy response that it unleashed,” says Ruscitti.All this shows that deciding on whether it’s a good idea to sell the news of the first Fed rate cute very much depends on whether an investor thinks that Powell and colleagues are doing so just because benign inflation allows it, or they have to do so because a severely weakening economy demands it — as were the cases, for differing causes, in 1990, 2001 and 2007...

NVIDIA's STOCK SEE BIGGET WEEKLY GAIN IN 15 MONTHS,SNAPS A LONG LOSING STREAK-MARKETWATCH AUG 16TH 2024-Nvidia’s stock is bouncing back with its biggest weekly gain in more than a year.Nvidia’s stock sees biggest weekly gain in 15 months, snaps a long losing streakWedbush looks to dispel bubble concerns, says AI-fueled tech boom still has years to goByTomi KilgoreLast Updated:Aug. 16, 2024 at 6:13 p.m. ETReferenced SymbolsNVDA,1.40%, SPX,0.20%, SMCI,0.34%Nvidia Corp. bulls have come back with a vengeance, as they have dug the semiconductor maker and leading artificial-intelligence play’s stock out of the dumps and to its best weekly performance in over a year.Before this week, Nvidia sharesNVDA 1.40%had tumbled their way into a bear market amid concerns overan investor rotationaway from big technology companies and fears that the release of Nvidia’s new Blackwell chipmay be delayed— a dynamic that sparked worries that the AI bubble was popping.Through Aug. 9, the stock had dropped 19% amid a four-week losing streak, its longest such streak since the five-week stretch that ended Oct. 14, 2022. On Aug. 7, the shares closed at a three-month low of $98.91, which was 27% below their June 18 record-high close of $135.58.Keep in mind that many on Wall Street define a bear market as a decline of at least 20% from a bull market high.Then, all of a sudden, the tide turned.The stock started this week with a 4.1% rally, helped byBofA Securities’ callthat Nvidia was its top “rebound” pick.Bulls have held the reins since, with the stock closing Friday up 1.7% to produce a fifth-straight gain. It has run up 18.9% this week, the best weekly performance since it soared 24.6% during the week ended May 26, 2023.Wedbush Securities’ tech analyst team has tried to assuage any concerns that the AI spending boom is about to end, saying instead that the stage is set for tech stocks to keep moving higher.While there are growing worries about how long it will take for corporate investments in AI to finally pay off in terms of revenue growth and margins, the Wedbush analysts noted that tech earnings were actually “generally robust” and reinforced their belief that an “AI tidal wave of spending” is still coming.“Rome was not built in a day, and neither will this unprecedented AI revolution,” the analysts wrote in a note to clients Friday.They added that they believe that the current environment is like the “1995 (almost 1996) start of the internet moment, and not a 1999 tech bubble-like moment.”The analysts said that when Nvidia reports fiscal second-quarter results on Aug. 28, investors will hear the “Godfather of AI,” Nvidia Chief Executive Jensen Huang, talk about the “massive demand trajectory” for AI chips into 2025...

STOCKS REBOUND TO NOTCH BEST WEEK OF 2024-WSJ AUG 16TH 2024-A streak of encouraging economic reports buoys marketsBySam GoldfarbAug. 16, 2024 4:37 pmETU.S. stocks edged higher Friday, capping off their best week of the year in a head-spinning turnaround that defied recent concerns about rising recession risks. Buoyed by a surprising streak of encouraging economic reports, the S&P 500 gained 3.9% this week. The Dow Jones Industrial Average climbed 2.9%, and the Nasdaq Composite advanced 5.3%. It was the biggest weekly gain for each major index since last November.Friday’s trading session was quiet, but stocks were able to maintain their momentum from the previous few days. Stocks began rallying in earnest Tuesday in response to data that showed that wholesale-level prices rose less than anticipated last month. They added to those gains Wednesday after consumer-price index data alsoshowed inflation coolingand surged again Thursday following better-than-expectedreports on retail salesand jobless claims.Altogether, the run of good data significantly eased anxieties about the economic outlook that had been fueled two weeks ago by asurprisingly weak July jobs report. Sharp declines in stocks following that report were exacerbated by traders unwinding popular bets that wereoften made with borrowed money. Yet by Thursday, major indexes had already erased those losses.“The market’s really in knee-jerk mode right now to incoming data,” saidLiz Ann Sonders, chief investment strategist at Charles Schwab.The S&P 500, the Dow and the Nasdaq Composite each gained 0.2% Friday.Among individual stocks,H&R Blockwas a standout, rising 12% after the tax-preparation company notched strong earnings and forecast fiscal-year results above expectations. Large technology stocks were mixed, withAlphabetrising 1% butMeta Platformsfalling 1.8%.One consequence of recent solid economic data is that investors have scaled back bets that the Federal Reserve will cut interest rates by a larger-than-normal half a percentage point at its next meeting on Sept. 17-18. Traders still see it as practically guaranteed that the Fed will cut rates by at least a quarter of a percentage point, in what would be the first move by the central bank since it raised rates to a two-decade high in July 2023. Interest-rates futures showed Friday that investors now see only a roughly 25% chance of a larger cut, down from around 50% a week earlier. That shift has had mixed implications for the bond market, with investors easing up on short-term Treasurys but buying more longer-term bonds as a possible hedge against another downturn in stocks. The yield on the 2-year Treasury note settled at 4.064% Friday, according to Tradeweb, up from 4.054% a week earlier. The yield on the 10-year note edged down by 0.051 percentage point to 3.891%.

RETAILERS AND PRICING STRATEGIES - MARKETWATCH AUG 16TH 2024-Retailers have pulled back on raising prices. More are now lowering them.D.A. Davidson has launched a new price tracker as grocery prices have become a hot-button issueByCiara LinnanePublished:Aug. 16, 2024 at 9:01 a.m. ETRetailers are starting to get the message about the high prices of everyday items.Referenced SymbolsCALM ,-0.27%,WMT,0.28%,AZO,1.42%,ORLY ,0.63%,AAP -0.55%, ULTA,2.96%DKS,0.43%,GO,0.37%,HD 0.84%,LOW 0.53%Retailers Retailers are increasingly investing to make the prices of everyday items more affordable, and Walmart Inc. is leading the way in a move that makes it likely to win more market share.That’s according to D.A. Davidson, which on Friday launched a new proprietary price-tracker database that’s been in the works for the last 18 months.“We are unveiling this work now for two reasons: after 18 months, we have sufficient history; and the trend in grocery pricing has become a hot-button issue after signs of increased price investment from some,” analysts Michael Baker and Keegan Cox wrote in commentary introducing the tracker.Vice President Kamala Harris’s campaign said this week she will call for what it says is the first-everfederal ban on corporate price gougingfor food and groceries. Harris is expected to tout the move in a Friday speech in North Carolina.Since February 2023, the D.A. Davidson analysts have been tracking prices online for a representative set of products across their retail coverage, including grocery companies, auto parts, home centers and other hardline areas. On average, they track 70 SKUs (shopkeeping units) at 16 retailers every week.Since then, 38% of the products tracked have seen price increases, while 29% have seen decreases and 33% have been stable.Since February of 2024, however, only 26% of products have seen price increases and 30% have seen decreases. In the last three months, the percentage of increases has dwindled to 22%.The data are consistent with overall trends in the consumer-price index and food at home in particular, the analysts wrote.The biggest price changes were for eggs, a trend that has shown up in CPI and in the earnings of the nation’s biggest egg producer, Cal-Maine Foods Inc.CALM-0.27%, which said its most recent quarterwas hit by an avian flu outbreakin Kansas and Texas.But paper towels, cat litter and dog food have been more stable, the analysts said.“Across retailers, Walmart Inc.WMT0.28%has tended to be the price leader on like-for-like products, along with the warehouse clubs where the same products are available,” the analysts wrote.At auto-parts makers, AutoZone Inc.AZO1.42%and O’Reilly Automotive Inc.ORLY0.63%have seen steady to increasing prices, while Advance Auto Parts Inc.AAP-0.55%has been more promotional...

WALMART IS ON A WINNING STREAK - WSJ AUG 15TH 2024-Retailer is now S&P 500’s best-performing retail stock in 2024, and with good reasonByJinjoo LeeAug. 15, 2024 11:49 amET.Walmart raised its full-year guidance againEvery-day-low-price retailerWalmartWMT0.65%increase; is one of the few companies in its sector that can be counted on to thrive in this lukewarm economic environment.The market seemed to be pricing that in, with Walmart up roughly 31% year to date before its latest earnings call, making it the second-best-performing retailer in the S&P 500 afterCostcoCOST-0.77%decrease; . After its latest earnings call, Walmart shares jumped another 9% in morning trading, putting it in first place.Investors had reason to applaud. The company on Thursday saidcomparable sales at Walmart U.S. rose 4.2%in the three-month period ended July 26 compared with a year earlier—better than the 3.5% growth analysts polled by Visible Alpha were expecting. This marks nearly a decade of an unbroken streak of comparable-sales growth at the unit—quite the feat given that the company is America’s largest retailer. That is notably stronger than the 2.8% growth that all American general-merchandise stores saw over the comparable period, according to the latest retail-sales figures also released on Thursday morning. Excluding the effects of losses from investments, Walmart’s earnings were 67 cents a share, higher than the 65- cents-a-share number analysts were penciling in.The company raised its full-year guidance again and now expects net sales on a constant-currency basis to grow 3.75% to 4.75%, up from its prior expectation of 3%-to-4% growth. It also raised the midpoint of its adjusted-earnings-per-share guidance by 4% to $2.39.“So far, we aren’t experiencing a weaker consumer overall,” Walmart Chief ExecutiveDoug McMillonsaid on the company’s earnings call. Consumers are loading up on groceries, particularly produce and meats, but aren’t skimping as much on discretionary items either. Comparable sales of groceries at Walmart U.S. rose by a mid-single-digit percentage, while general-merchandise sales were flat—a notable improvement from declines in its prior quarters. Strong demand for weight-loss drugs such as Ozempic helped its health-and-wellness business grow by a low double-digit percentage... Meanwhile, Walmart’s effort to woo higher-income consumers—through spruced-up stores, a premiumprivate-label launchand better delivery execution—still seem to be working. Delivery accuracy and speed have improved, and the company said higher-income households accounted for most of its market-share gains. At the same time, it is still gaining share with middle- and low-income households by undercutting competition on prices. The company said its prices were slightly lower during the quarter at Walmart U.S. compared with a year earlier, with rollbacks on more than 7,200 items. Rollbacks tend to be funded by manufacturers...

S&P500 erases August losses as "Irrational Recession Fears" Fade.Encouraging economic data and strong earnings have helped stocks stage a stunning turnaround, analysts sayByJoseph AdinolfiLast Updated:Aug. 15, 2024 at 4:54 p.m. ETStocks have staged a stunning turnaround as the S&P 500 has erased all of its August losses.Referenced SymbolsSPX 1.61% , COMP 2.34%,WMT 6.58%, SP500.25 ,3.38%USDJPY -0.09% ,VIX-5.93%,SP500.45 2.54%,DJIA 1.39% That was fast, The S&P 500 SPX 1.61%finished clawing back all of its losses from earlier in August on Thursday — a dizzying turnaround after the index booked its worst start to a month in eight years. As of Thursday’s close, the S&P 500 was up 0.4% in August, while the tech-heavy Nasdaq Composite COMP2.34%was only marginally lower on the month, according to FactSet data.Wall Street professionals said strong economic data this week helped to rebut investors’ fears about a looming U.S. recession while also boosting the likelihood of a 25-basis-point interest-rate cut by the Federal Reserve next month.Inflation data released earlier this weekshowed price pressures have continued to ease, while the latest batch of reports released Thursday helped ameliorate concerns that a slowing labor market and fading U.S. consumer would lead the economy into a recession.Retail sales in the U.S.last month saw their biggest jump in a year and a half, whileweekly jobless claims datarevealed that fewer Americans had applied for unemployment benefits than economists had expected.These data, together withstrong earnings from Walmart Inc. WMT6.58%, helped to spark a broad-based rally that’s seen consumer-facing names perform particularly well — with the S&P 500’s consumer-discretionary sectorSP500.253.38%on Thursday tallying its best day of the year, according to Dow Jones Market Data.Stocks benefited from what Mike O’Rourke, chief market strategist at Jones Trading, described as a “pretty broad-based buying wave” on Thursday, as easing recession fears helped boost both technology stocks and more cyclically-oriented corners of the market alike.Jay Hatfield, chief executive and portfolio manager at Infrastructure Capital Advisors, noted that the market’s speedy recovery was hardly a surprise after investors appeared to overreact to a few soft data prints earlier this month.“Today is an unwind of the irrational recession fears that started at the beginning of the month,” Hatfield said.A rocky start to August for U.S. stocks seemed to pick up where things had left off in July, when a rotation trade boosted lagging corners of the market while leaving indexes like the S&P 500 teetering.The selloff reached its nadir on Aug. 5 as stocks booked their worst session in two years. Signs of a “growth scare” in the U.S. along with the unwind of the Japanese yenUSDJPY-0.09%carry trade caused the Cboe Volatility IndexVIX-5.93%...

ECONOMIC OPINION BY KENNETH GALBRAITH;- MARKETWATCH & PROJECT SYNDICATE-U.S. central bank engineers an economic slowdown whenever unemployment is low and the president is a DemocratByJames K. GalbraithLast Updated:Aug. 7, 2024 at 4:01 p.m. ETReferenced SymbolsTMUBMUSD03M5.217%TMUBMUSD10Y3.918%DX00-0.12% The U.S. stock market’s plunge earlier this week is — perhaps — the long-awaited signal of a U.S. economic slump. For President Joe Biden’s administration and Vice President Kamala Harris’s presidential campaign, the timing could not be worse. For years, they have tried tosell their economic recordas a success story. With global markets in decline and U.S. unemployment rising, that sale just went from hard to impossible.The market meltdown and impending recession comemore than two years afterthe U.S. Federal Reserve started hiking interest rates to “fight inflation.” They are the direct, but delayed, consequence of that policy. So, the Fed’s policy isfinallyhaving its intended effect — over two years after inflation peaked and began to fall,for reasons unrelated to the Fed’s policy.Will a recession now come? For at least 40 years, an invertedyield curvefor U.S. Treasurys has been a reliable indicator of recession in the U.S. In 1980, 1982, 1989, 2000, 2006, and 2019, the interest rate on 90-day Treasury bills, and the economy slumped within a year. In all cases after 1982, the inversion was over when the recession arrived, but it arrived nonetheless.This happens because when the Fed raises short-term interest rates, credit for business investment, construction, and mortgages begins to dry up. Why lend at 4% or 5%, or even more, with risk, when you can park your cash, risk-free, for 5%? Other factors, including a rising U.S. dollarDX00-0.12%(bad for exports), and interest resets on old loans (bad for credit card and mortgage defaults, notoriously in 2007-08), also play a role. Eventually, long-term rates start to rise, and the inversion ends, but then high long-term rates do further damage.In this cycle, while the yield curve inverted in October 2022, no recession ensued — until now. Offsetting forces supported the economy, includingvery large fiscal deficits, the payment of interest on ahistorically large national debt, and the direct payment of interest (since 2009) on extremely large bank reserves. Still, the economy rolled along, despite the Fed’s best efforts to slow it down. No more. U.S. unemployment is up almost a full percentage point over the past year,and job creation is way down. The number of newly unemployed, newly employed part-time for economic reasons, and those not in the labor force but wanting a job, increased bymore than 1 million from June to July. Former Fed economistClaudia Sahm’s indicator of recession— a half-point increase in unemployment on a three-month moving average basis — is blinking red. TheSahm rulehas held since at least 1960...

STOCK MARKETS LIKELY TO RETEST LOWS IN 4-STEP RECOVERY PROCESS, HISTORY SUGGESTS- MARKETWATCH AUG 7TH,2024-Markets could feel the effects of Monday’s shock for several weeks,’ NDR analysts sayByWilliam WattsPublished:Aug. 7, 2024 at 4:16 p.m. ET.It could be a bumpy ride.Referenced Symbols ;VIX0.51%SPX-0.77%DJIA-0.60%COMP-1.05%A turnaround Tuesday followed by a wobbly Wednesday on Wall Street leaves stock-market investors wondering how to proceed after the S&P 500 suffered its largest one-day drop in nearly two years to kick off the week.The bad news is that history suggests a retest of those Monday lows is likely in order; the good news is that the market is likely to regain its mojo in the coming weeks, as long as a recession remains at bay and the latest episode proves to be nothing more than a growth scare, argued Ed Clissold, chief U.S. strategist, and Thanh Nguyen, senior quantitative analyst, at Ned Davis Research in a Wednesday note.“The bottom line is that the markets could feel the effects of Monday’s shock for several weeks. However, fundamentals do not align with a major bear market at this time,” they wrote.They’re referring to the volatility shock that saw the Cboe Volatility Index VIX0.51%, often referred to as Wall Street’s “fear gauge,” more than double over three days, rising from 16.4 on Thursday to 38.6 on Monday. A move on that scale has happened only four times in the history of the VIX, which was first introduced in the early 1990s.The strategists laid out what happened to the market in those previous instances in the chartIt shows that the S&P 500SPX -0.77%has tumbled during the VIX spikes, then rebounded and retested the lows over the following weeks. The sample size is small, but on each of those four occasions, the S&P 500 broke the low seen from the original VIX spike. Three out of four times, however, the index was up a year later by a median of 11.2%, NDR found.Monday’s close marked an 8.5% pullback from the S&P 500’s record finish scored in July, the largest retreat since October but still shy of the 10% threshold that marks a market correction. Moreover, the strategists reminded that the market tends to average one 10% correction a year.Clissold and Nguyen noted that the stock market typically sees a four-step healing process after sharp declines. Those steps are “oversold, rally, retest, and breadth thrusts.”The S&P 500’s 3% drop on Monday clearly left the market oversold, they said, with declining stocks outnumbering advancers by 18 to 1. The 20-day TRIN indicator, which measures advancing versus declining stocks relative to volume, posted its highest reading since the May 2010 “flash crash.”...

STOCK MARKETS; STOCK DROP WITH TRADERS ON EDGE AFTER GLOBAL SELLOFF-WSJ AUG 7TH, 2024-Walt Disney and Airbnb shares fall after the companies’ earnings reportsByKaren LangleyAug. 7, 2024 4:32 pmET.Walt Disney shares dropped after the company forecast more challenges for its theme-parks business.Strong daily gains for U.S. stocks evaporated before the closing bell Wednesday asthe market’s reboundfaltered.The S&P 500 ended the day down 0.8%, after climbing as much as 1.7% in morning trading, making for its biggest blown gain in more than two years, according to Dow Jones Market Data. The tech-heavy Nasdaq Composite and Dow Jones Industrial Average also rallied in early trading before finishing the session down 1% and 0.6%, respectively.The declines put a damper on stocks’ recovery Tuesday aftera sharp selloff to start the week, and trimmed the S&P 500’s gains for the year to 9%.Investors said they expect the sharp moves to continue.“It wouldn’t surprise me at all if we see another downdraft in the markets. They’re just trying to find their way,” said Thorne Perkin, president of multifamily office Papamarkou Wellner Perkin. “Big picture, we are long term bullish.”Traders were grappling withrenewed concerns about the economywhen the unraveling of a popular Wall Street trade using the Japanese yen sent stocks tumbling Monday. Declines in the technology, healthcare and consumer discretionary sectors pulled the S&P 500 lower. The energy segment followed oil prices higher, and the utilities, financial and consumer staples sectors also rose.With earnings season in its later stages, analysts expect profits from companies in the S&P 500 rose 12% in the second quarter, up from a forecast for 9% growth at the end of March, according to FactSet. Sectors from financials to healthcare to utilities are expected to deliver double-digit percentages of profit growth.That has contributed to a view among some money managers that the stock market can rise from here.“Earnings have been pretty strong,” said David Wagner, head of equity and portfolio manager at Aptus Capital Advisors. “That’s why I think the path of least resistance can be higher into the end of the year.”Some companies disappointed investors.Walt DisneyDIS-4.46% shares fell 4.5% after the entertainment companyforecast challenges for itstheme-parks business.AirbnbABNB-13.38%decrease; shares tumbled 13% after the short-term rental companywarned of slowing demandin the U.S. Shares ofSuper Micro Computerdeclined 20% after the server makerreported lower-than-expected earnings.In bond markets, the yield on the 10-year U.S. Treasury note rose to 3.968%, from 3.887% on Tuesday. The benchmark yield has been up for two days after eight trading days of declines.Brent crude, the global oil benchmark, gained 2.4% to $78.33 per barrel.

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