Weekly Recap & Market Forecast $SPX (Aug 11th—> Aug 16th)

**DIYWallST Weekly Recap & Market Forecast**

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Hello Investors! 🌟 This week began with a flash of panic reminiscent of 1987’s Black Monday, but by week’s end, markets had regained some stability. Let’s explore the key events that shaped this volatile week in the markets. 📈

**Market Overview:**

Trading opened with a sense of deja vu as investors confronted fears of a "Black Monday" scenario. A mix of factors—including fears of a forced unwind of the Japanese Yen carry trade and growing concerns that the Fed is behind the curve—triggered a full-blown panic in global financial markets. The VIX skyrocketed nearly 165% to $65, and the Nikkei plunged about 15% on Monday. Warren Buffett’s decision to sell half his Apple stake and raise cash further rattled investors. Safe-haven flows surged into Treasuries, sending yields plummeting, while the Yen and Swiss Franc strengthened. Nearly all other asset classes, including gold and bitcoin, faced significant pressure as investors rushed to raise cash. The US yield curve briefly tested positive territory in the 2-10 year spread for the first time in about two years, and S&P futures tested the 200-day moving average. Fed fund futures markets quickly began pricing in a potential 50 basis point rate cut in September.

However, by the time the New York markets opened on Monday, the VIX had already pulled back from its pre-market highs, and stocks began to recover some losses. The NASDAQ composite tested but ultimately held its 200-day moving average. Treasury yields began to rise again, and the yield curve re-inverted. By midweek, fears surrounding the Yen carry trade had eased after a BOJ official indicated they would not continue raising rates during market instability. The whipsaw recovery continued after a stronger-than-expected weekly US initial jobless claims report, which fueled debate on whether the market had found a bottom. The US 10-year yield climbed back to 4% after disappointing 10-year and 30-year coupon sales. Oil prices rose again as markets awaited Iran's response to the assassination in Tehran last week. By the end of a turbulent week, the S&P slipped less than 0.1%, the DJIA shed 0.6%, and the Nasdaq fell 0.2%.

**Stock Market Performance:**

- 📉 S&P 500: Down by less than 0.1%
- 📉 Dow Jones: Down by 0.6%
- 📉 NASDAQ: Down by 0.2%

**Economic Indicators:**

- **VIX:** Skyrocketed nearly 165% to 65, reflecting heightened market volatility.
- **US Yield Curve:** Briefly tested positive territory in the 2-10 year spread before re-inverting.
- **US Initial Jobless Claims:** Came in stronger than expected, fueling optimism about the labor market and contributing to the market's recovery.
- **Treasury Yields:** The US 10-year yield climbed back to 4% by week’s end after disappointing Treasury sales.
- **Oil Prices:** Continued to rise amid ongoing tensions between Israel and Iran.

**Corporate News:**

- **Nvidia:** Faced headwinds after reports suggested the launch of its cutting-edge Blackwell chip would be delayed by a few months due to design issues. This was confirmed by Nvidia supplier SuperMicro during its earnings call, where they reported strong revenue but weakening margins, sending their shares sharply lower.
- **AI Trade:** Continued to unwind as questions lingered about the immediate impact of AI on the broader economy.
- **Disney:** Beat earnings expectations and raised guidance despite acknowledging economic uncertainty’s impact on consumers. The company also announced price hikes for its streaming services.
- **Airbnb and Hilton:** Both guided lower as vacationers tightened their belts ahead of a potential recession, signaling a challenging environment for the travel industry.
- **Lyft:** Reported its first-ever profitable quarter but missed estimates and provided weak guidance, contrasting with rival Uber, which reported more robust results.

**Looking Ahead:**

This week will bring several key economic data releases and earnings reports:

- **U.S. CPI Data**
- **U.S. PPI Data**
- **U.S. Retail Sales**
- **Earnings Reports:** Walmart (WMT), Home Depot (HD), Cisco (CSCO), Alibaba (BABA)
- **13F Filings:** Expect insights into the latest moves by major investors.

As we look ahead, these developments will be crucial in shaping market sentiment and guiding investment decisions. If you have any questions or need further insights, feel free to reach out. Here’s to another week of informed investing and strategic decision-making! 🌟
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