Stocks Open Lower then Climb Higher
Stocks began the day on a low note but turned positive by lunchtime. This comeback reflects investor optimism about recent economic data showing cooling inflation and steady consumer spending.
Consumer Sentiment and Construction Data
The University of Michigan reported an increase in its Consumer Sentiment Index by 2.1% in August, marking the first rise in five months. However, while long-term expectations are up, the sentiment on current conditions dropped to 60.9, the lowest since December 2022. Meanwhile, the Census Bureau revealed a 6.8% decline in housing starts in July, falling short of expectations at 1.238 million. Building permits also fell by 4%, hinting at potential future construction slowdowns.
Expert Insights
José Torres from Interactive Brokers noted a mix of progress and challenges, with consumer sentiment rising yet construction activity plummeting. Traders are cautious, awaiting central banking updates next week.
Anticipation Builds for Powell's Jackson Hole Speech
Next week, the spotlight will be on Fed Chair Jerome Powell's speech at the Jackson Hole Symposium. Economist Michael Gapen from BofA Global Research suggests that Powell could signal the Fed is close to easing financial conditions. However, given recent weak job numbers, Powell might also express caution about unexpected labor market weaknesses.
Alphabet's Record Losing Streak
Alphabet's shares ended the week down 0.4%, despite a 1% rise on Friday. Concerns persist about potential antitrust actions against Google, contributing to the tech giant's longest weekly losing streak.
Earnings Movements: Applied Materials and H&R Block
Applied Materials saw a 1.9% decline despite posting strong earnings, due to regional demand shifts. Analyst Jim Kelleher highlights strong demand from China, offsetting slower recoveries elsewhere.
In contrast, H&R Block surged 12.1% post-earnings, surpassing expectations. The company also announced a 17% dividend increase and a new $1.5 billion stock buyback plan.
Market Performance
For the main indexes, the Dow Jones rose by 0.2%, while both the Nasdaq Composite and S&P 500 also gained 0.2%, each marking a seventh consecutive day of gains.
