SPY Technical Analysis for Thursday August 24, 2023
Weekly SPY Snapshot: Inside the Candle and the Threat of a Bearish Turn
Market Eyes Jerome Powell's Speech at Jackson Hole Symposium: Hints on Future Policy Awaited
Following positive economic reports in both the US and Europe, which reinforced the idea that major central banks will delay raising interest rates to avert a recession, stocks saw an increase while bond yields declined. Since June, the S&P 500 has risen by 1.1%. With a particular focus on Nvidia's earnings, technology played a significant role in driving the market upwards. The yields on US Treasury securities with a two-year maturity fell below 5%, reflecting the fact that American corporate activity had barely increased due to subdued consumer demand. Simultaneously, as private sector activity in the euro area continued to contract, the 10-year German rate also decreased.
In the housing sector, US mortgage applications dropped to a level unseen in over three decades, serving as a significant economic indicator. Separate data showed that new home sales reached their highest point in over a year. This increase was constrained by the scarcity of homes for sale in the secondary market due to escalating mortgage rates. Traders also factored in US government data, suggesting that the number of jobs added in the year leading up to March would likely be revised downward by 306,000, a smaller decrease than some economists had anticipated.
Wednesday's bond price increase was also attributed to technical factors. This followed a recent sell-off in Treasury securities that propelled 10-year yields to their loftiest level since late 2007, sparking speculation that interest rates might rise further to fight inflation, even if the Fed chooses to pause its rate hike program in September.
The market's attention is now focused on Jerome Powell's upcoming address on Friday at the Jackson Hole Economic Policy Symposium of the Kansas City Fed. This comes after authorities elevated borrowing costs to their peak in 22 years last month, and investors eagerly await hints on the direction of future policy.
NVIDIA's Q2 2023 Earnings Report, released on August 23, 2023, shows remarkable performance in several key areas. The adjusted EPS stands at $2.70, surpassing the estimated $2.07. Revenue reached $13.51 billion, exceeding the $11.04 billion estimate. The adjusted gross margin was also higher than expected at 71.2%, compared to the estimated 70.1%. While automotive revenue was slightly below the estimated $309.4 million at $253 million, gaming revenue outperformed expectations at $2.49 billion against the estimated $2.38 billion. Data center revenue was a highlight at $10.32 billion, significantly above the $7.98 billion estimate. Looking ahead, NVIDIA projects 3Q revenue to be around $16.00 billion, plus or minus 2%, well above the estimated $12.5 billion.1
SPY Holds Above 437.57 Overnight, Exceeds 444.34 Upside Target Following NVDA's Blowout Earnings Beat
Keep reading with a 7-day free trial
Subscribe to Follow the Trend to keep reading this post and get 7 days of free access to the full post archives.