Stock Market Today: Stocks Go Up Ahead of Powell’s Jackson Hole Speech

Stocks gained ground Thursday as investors assessed some not-so-bad economic reports ahead of tomorrow’s appearance by Fed Chair Jerome Powell at the central bank’s annual symposium in Jackson Hole, Wyoming.

This morning, the Labor Department said weekly unemployment claims fell to a month-long low of 243,000 last week, down from last week’s revised 245,000. A separate report from the Department of Commerce showed gross domestic product (GDP) fell 0.6% in the second quarter, an improvement from the 0.9% drop seen in the first reading that last week. month was released – a lecture that sparked a lot of recession chatter around Wall Street.

But all eyes remain on Jackson Hole. “While we wait for Chairman Powell tomorrow, other officials on the media circuit have started,” said Michael Reinking, senior market strategist at the New York Stock Exchange. “The tone of the commentary was hawkish, but very much in line with what we heard after the [July] Meeting of the Federal Open Market Committee. The key themes have been our continued commitment to taming inflation.” Reinking added that while most central bank officials are keeping monetary policy decisions “close to the waist” ahead of the September Fed meeting as they waiting for the next round of economic data, also pointing them out that we’re not quite at a level where they can stop walking rates.

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Today’s gains were broad-based, with the materials (+2.3%) and the communication services (+2.0%) sectors do best. As for the major indices, the Nasdaq composite rose 1.7% to 12,639, the S&P 500 Index climbed 1.4% to 4,199, and the Dow Jones Industrial Average spiked at 1.0% to 33,291.

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Other news at the fair today:

  • The small cap Russell 2000 increased by 1.5% to 1,964.
  • gold futures rose 0.6% to settle at $1,771.40 an ounce.
  • Bitcoin fell 0.3% to $21,611.45. (Bitcoin is traded 24 hours a day; prices quoted here are from 4pm)
  • Platoon Interactive (PTON) shares plunged 18.3% after the home exercise equipment maker reported gains. In the fiscal fourth quarter, PTON posted a net loss of $3.68 per share, compared to a loss of $1.05 per share a year ago. Revenue fell 28% to $678.7 million, which was below analyst consensus expectations. It was the sixth consecutive quarter that the company reported a loss, although it said it is looking to break even in the second half of fiscal 2023 on a cash flow basis. Today’s sharp sell-off comes a day after PTON shares rose more than 20% after announcing a deal with (AMZN).
  • Snowflake (SNOW) was up 23.1% after the cloud data platform reported higher-than-expected second-quarter revenue of $497 million. “July quarterly results were exceptional and helped allay fears about a more prolonged slowdown in data usage at key customers after a series of mixed quarterly reports,” said CFRA Research analyst David Holt. “Second quarter revenue was $497 million (+83% Y/Y), hitting the $467 million consensus as strength in financial services drove the rhythm.” However, Holt held a Hold rating on SNOW. “After the current equity gap, we prefer to wait and see if the macro/market environment allows for a continuation of improved trends – we find comparable numbers becoming increasingly difficult in the second half of fiscal 2023 in terms of product revenues and remaining performance liabilities ( RPOs).”

Is it time to buy energy stocks?

Oil prices had another miserable day, but energy stocks may still have some fuel in the tank. US crude oil futures fell 2.5% to $92.52 a barrel today, and are now down more than 24% from their mid-June highs above $122.

Still, Jeff Buchbinder, chief equity strategist at independent broker-dealer LPL Financial, says there are currently three conditions for the energy sector that create a “potentially attractive opportunity” for investors. Specifically, Buchbinder believes that some of the best investment opportunities arise when the following conditions arise: “1) the market is pricing in a pessimistic outlook in the form of lower valuations, 2) earnings estimates are revised higher and growth accelerates, and 3 ) technical analysis indicators point to an imminent recovery.” The strategist currently sees all three conditions in energy supplies.

If that’s not enough to convince you, Buchbinder tells “Follow Warren.” By this he means Warren Buffett, whose holding company Berkshire Hathaway (BRK.B) was major buyers of oil and gas stocks in 2022. With that in mind, check out seven energy stocks that could be one of the best ideas for investors for the rest of this year.

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