For the week, the S & P 500 gave back over 4% in its worst weekly performance in a year, the Nasdaq plunged more than 5.5%, and the Dow Jones Industrial Average dropped roughly 3%. The sharp selling on Friday was partly due to Broadcom’s 10% post-earnings stock decline, as the chipmaker beat on the quarter but disappointed with guidance. The market sees 125 basis points of Fed rate cuts across the year’s three remaining policy meetings. In the week ahead, investors will get two reads on inflation that could sway the Fed, a few stragglers on the earnings front, and a chance to see Democrat Kamala Harris and Republican Donald Trump debate in the lead-up to November’s presidential election.
The August consumer price index (CPI) and the August producer price index (PPI) are set to be released, with economists expecting a 2.6% year-over-year increase for headline CPI and a 3.2% year-over-year increase at the core level. The shelter component remains problematic as housing costs have proven to be sticky. In addition, the PPI tracks the prices producers pay, which are crucial as input costs dictate selling prices. Inflation-weary shoppers have only just started to see prices moderate and would be hard-pressed to absorb another round of increases. Consumer resilience is essential to avoiding a recession, given that two-thirds of the nation’s economy is driven by private consumption.
While no Club stocks are set to report earnings, outside the Club, two big tech companies and two consumer-related names will release their results. Oracle, Signet Jewelers, Kroger, and Adobe are among the companies reporting this week, providing insights into data center spending, consumer discretionary spending, food costs, and demand for generative AI offerings. The debate between Vice President Harris and former President Trump is also set to take place, giving Americans their first chance to see the two candidates square off and learn more about their economic plans.
The pillars of Trump and Harris’ economic plans are starting to emerge, from capital gains taxes to corporate tax rates. According to the latest polling average, Harris has a small lead over Trump. The week ahead also includes companies like GameStop, Dave & Buster’s, and Petco reporting earnings, as well as economic data releases such as the consumer price index and the producer price index. As a subscriber to the CNBC Investing Club with Jim Cramer, members will receive trade alerts before Jim makes a trade, with specific guidelines and procedures in place for executing trades.
Overall, the market is facing challenges related to economic growth concerns, upcoming events like the presidential debate and the Federal Reserve’s policy meeting, and mixed signals from economic data reports. Inflation remains a key focus for investors, as well as corporate earnings and the potential impact of political developments on the market. Moving forward, investors will be closely monitoring economic indicators, earnings reports, and political events to assess the market’s direction and make informed investment decisions.
