🏠 The week ahead

Good morning investors! Ready for another exciting week?

Today we cover:

• What to keep an eye on this week

• A look at the Big 7

• Benefit from IPOs

📊 Economy and News 

What to look forward to this week

Here’s what to keep an eye on this week:

CPI Data

July's CPI report is expected to show inflation edging closer to the Fed’s 2% target. A modest cooling in inflation could ease fears of economic downturn due to prolonged high rates, while a weak report might heighten recession concerns and increase market volatility.

Volatility Risks

Market anxiety remains after last Monday's selloff, triggered by U.S. recession fears and the unwinding of global yen-funded carry trades. With upcoming economic data and potential Fed rate cuts, the market's response to global factors, including the Middle East conflict and the U.S. election, will be critical.

Earnings

Earnings season is wrapping up, but key retailers like Home Depot (HD) and Walmart (WMT) are set to report. Investors will also be watching Cisco Systems (CSCO) and Fox Corporation (FOX) for further economic insights.

Oil Prices

Oil prices rose last week amid easing demand concerns and geopolitical risks in the Middle East. Brent gained over 3.5%, and U.S. crude futures rose more than 4%. What more will happen this week?

UK Data

The UK will release significant economic data this week, including wage growth, inflation figures, and monthly GDP, which will guide future monetary policy decisions.

Global hits:

• India markets regulator asks investors to remain calm on Hindenburg allegations against chief.

• China central bank says it will increase treasury bond trading.

• Canada sheds 2,800 jobs in July, jobless rate stays at 6.4%.

📈 Stocks

S&P 500 5,344.16 (+0.47%)
DJIA 39,497.54 (+0.13%)
NASDAQ 16,745.30 (+0.51%)
BRENT CRUDE 79.66 (+0.56%)
* Prices as of Aug 11th, 12:20 AM UTC

The Big 7 Rebound

Due to their large market capitalizations, the Magnificent 7 stocks exert substantial influence on the market-cap-weighted Nasdaq Composite and S&P 500 indexes.

Hence it’s vital to see what’s happening to these big names. Here’s the current situation

Nvidia

Nvidia (NVDA) rebounded 3.5% on Thursday, partially recovering from Wednesday's decline. On Monday, the AI leader hit its lowest level since mid-May.

Nvidia had been enjoying a strong year, particularly after surpassing Wall Street’s expectations for its fiscal first quarter and offering an optimistic outlook for the current period.

The company also implemented a 10-for-1 stock split, effective June 10.

Nvidia stock topped a split-adjusted handle buy point at 92.22, and shares gapped up to all-time highs. Nvidia stock also moved above a split-adjusted entry at 97.40, but gave up of its gains from those buy triggers Monday.

The stock is set to announce earnings on August 28th, 2024.

Amazon

Amazon.com remains significantly below its long-term 200-day moving average, though shares gained another 1.5% on Thursday.

Last week, the e-commerce giant reported mixed second-quarter results, with earnings beating expectations but revenue falling short despite a stronger-than-expected performance from its cloud computing division.

Additionally, Amazon's sales forecast was below analysts' projections.

Tesla

Tesla bounced back 3.7% on Thursday but remains below its 50- and 200-day moving averages after recent losses.

On July 23, the electric vehicle giant reported mixed second-quarter results, with earnings dropping by over 40% while sales exceeded expectations.

Apple

Apple shares gained 1% on Thursday but remained below their 50-day moving average. Earlier in the week, the stock briefly dipped below the $199.62 buy point from a June 11 breakout, triggering a round-trip sell signal.

Last week, Apple surpassed expectations for its fiscal third quarter, driven by record services revenue and strong iPad sales.

Microsoft

Microsoft's latest earning report impressed investors but Azure disapointed with a light guidance for sales.

Shares are currently trying to regain the 200-day line.

Meta

Meta Platforms rallied 2.8% on Thursday as it attempted to reclaim its 50-day moving average.

On July 31, Meta reported strong second-quarter earnings, with better-than-expected growth in its advertising business, giving CEO Mark Zuckerberg more time to pursue his ambitious AI vision.

Meta currently holds an 88 out of a perfect 99 IBD Composite Rating, according to the IBD Stock Checkup.

Alphabet

Alphabet has struggled in recent weeks, falling below its 50-day moving average. However, shares rose 2.3% on Thursday, finding support near the long-term 200-day moving average.

On July 23, Alphabet reported second-quarter earnings and revenue that exceeded analysts’ expectations, although management warned of higher expenses in the September quarter, which could limit margin growth.

The X war: Elon Musk’s X just sued a nonprofit advertising group out of existence. On the other hand, Maduro says he will block X in Venezuela for 10 days, after spat with Musk over contested election.

💵 Personal Finance

How to benefit from IPOs

IPOs allow investors to enjoy great perks. In recent times, companies such as Airbnb and CureVac BV offered great results. The former soared 114.7% above the IPO price and the latter offered up to 596% return from the offer price.

An IPO can be an easy way to improve your financial situation. Here are some of the benefits of investing in an IPO:

• You get a chance to make quick money in the form of listing gains.

• Prices are usually low at the time of an IPO, thus offering easy entry.

• Companies offer a lot of information at the IPO stage, thus making the decision easier.

However, not all IPOs are successful. Robinhood, for example, failed despite being a big name. Its shares fell 10% within minutes of the bell ringing. Some other companies to have faced a similar fate include Uber, Etsy, and Omeros.

So, how to choose the right IPO to invest in? Here are a few pointers to remember:

• Understand the business model and look at the company's long-term prospects. Ensure the model is sustainable and don't blindly follow big names.

• Choose a company that has proven itself and has strong supporters and brokers.

• Do not look solely at the past when gauging a company, rather look at its growth potential.

• Ensure the price is right as not all IPOs are justified and some companies are known for starting ‘expensive’.

Despite all this, you may still face some challenges. Remember to be cautious because the stock market is unpredictable.

Are you ready to invest in an IPO? Here are some upcoming IPOs:

• Abivax on Nasdaq between $11.60 and $13 per share (this week)

• Mach Natural Resources LP on NYSE between $19 and $21 per share (next week)

• Biolingus on Nasdaq between $15 and $16 per share (date not announced)

For more, check this amazing video covering how to invest in an IPO:

💰 Be a Better Investor

Resources:

• Retirement Calculator

• Make Money in Retirement

• Side Hustle Ideas

• Stock Deep Dives

• Investing 101 videos

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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