Scholarship withdraws; Buyers strike for Nvidia and Powell| Investor’s Business Daily

Stock indices opened sharply lower for the second consecutive session on Monday, led by small caps and tech stocks. Caution builds ahead of Fed Chair Jerome Powell’s speech in Jackson Hole on Friday, as investors hope Nvidia’s (NVDA) Wednesday’s Q2 report is not “as bad as feared”.


The Dow Jones Industrial Average lost 1.3% in the first hour, while the S&P 500 fell 1.6%. The Nasdaq composite is hit even harder, falling 1.7%. The Russell 2000 is down 1.5%.

Volume on the NYSE and Nasdaq is down double digits from the first hour on Friday.

The S&P volatility index is up more than 10%, surpassing 23 for the first time since August 3. Gold fell to a four-week low, while 10-year government bond yields rose by 3.0%.

Crude oil is plummeting again this morning, down 4.2% to $86.80 a barrel. Natural gas rose to the psychological level of $10, up 3.9% on this hour. The Natgas futures contract has not traded in double digits since 2008.

European markets are also trading lower, down more than 1.5%.

Meme stocks continued to show volatile moves.

Bed Bath & More (BBBY) is trading 2.6% higher after nearly completing a two-week round trip and 42 points. Bloomberg reports that certain suppliers have stopped shipping to the retailer due to unpaid bills.

AMC (AMC) dumped 31%, but registered shareholders just received one “Preferred Equity Unit” or APE for every share of common stock.

Netflix (NFLX) is down 5.2% after a downgrade to sell at boutique firm CFRA Research. The analyst warned that NFLX stocks may underperform the S&P 500 index for the remainder of the year.

Chairman Powell Jackson Hole Address on Friday

Federal Reserve Chair Jerome Powell will deliver his annual speech at the Jackson Hole economic symposium Friday.

There is huge hype for the speech, but Fed governors have spoken with one voice since the July meeting. Their message was simple and unambiguous: the economy is still overheating and several rate hikes will be needed to bring inflation back to the 2% target.

Stock market viewers are concerned that the summer rally is ignoring this message, but that is probably not true.

Technical conditions reached extremely oversold levels in June, fueling the powerful force of mean reversion. We see that in play now, with major indices moving up and reversing at 200-day moving average resistance. At the same time, oversold stocks have declined, allowing more aggressive sellers to take control of the ticker tape perhaps in September.

Still, everyone in the financial world will be following the speech closely, looking for subtle clues to policy shifts.

Deutsche Bank analyst Tim Wessel summed up the event for Barron’s on Monday, noting that “Powell’s comments are one of the key events that could shake US policy expectations from their recent reach, along with inflation and employment data ahead of the September [Fed decision on rates].”

Nvidia earnings after Wednesday’s close

Nvidia is trading more than 3% lower. The chip powerhouse reports Q2 results after Wednesday’s close, with FactSet forecasting earnings of just 50 cents a share.

On August 8, the company lowered its second-quarter revenue forecast from $8.1 billion to $6.7 billion, citing “lower sales of gaming products.” It fell 6.3% after the news and failed to recoup those losses last week.

NVDA shares are currently down a whopping 42% in 2022 and haven’t hit the 200-day moving average since the support broke in April. The cryptocurrency crash has exacerbated this loss, decreasing the demand for graphics hardware used solely for mining digital assets.

However, there are signs that Nvidia is approaching a long-term bottom.

For starters, the Earnings Per Share Rating has jumped to a very bullish 97 after four quarters exceeded expectations. In addition, the pristine “A” SMR Rating points to a highly profitable tech giant that sadly fell out of favor in 2022.

Monday Fair Highlights

No. 36 on the IBD 50, Tesla (TSLA) is trading 3.1% lower after announcing a price hike for its self-driving software. TSLA shares will be split 3-for-1 on Thursday.

No, 32 Arista Networks (ANET) is down 2.5%. ANET stock posted a weekly Relative Strength Line Blue Dot on Friday, after a relentless rise of 46% since mid-June. ANET stock was featured in the Aug. 17 IBD 50 Stocks To Watch.

insulation (PODD) has raised within 6% of the 275.93 buy point from a 196-day double bottom base.

The company just received approval for Omnipod 5, a treatment for children two years and older with type 1 diabetes. PODD shares are trading 1% lower Monday morning.


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