Macro Events & News
The softer PPI at 0.2% and in-line CPI at 2.9% helped ease fears of a renewed inflation surge, raising hopes for earlier-than-expected rate cuts. This relief drove Treasury yields lower, although experts still project the 10-year yield to range between 4.5% and 5% throughout 2025. Robust earnings from the banking sector further supported the market’s bullish tone. Additionally, a weaker-than-expected retail sales report implied a potential cooling in consumer spending, reinforcing the narrative that the Fed may be nearing the end of its tightening cycle.
The 10-Year Treasury yield pulled back to 4.6% and even briefly spent time under. The VIX fell back to 15.97.
All major indexes ended higher: the Dow up 3.6%, the S&P 500 up 2.9%, and the Nasdaq up 2.5%.
Watchlist News
2% ▲
Netflix (NASDAQ:NFLX) experienced a dip earlier in the week but quickly rebounded following a wave of bullish commentary and price target increases from prominent equity research firms, including Macquarie, Piper Sandler, Guggenheim, Barclays, and BMO Capital. With earnings scheduled for next Tuesday, this could get spicy.
august bear notes
Netflix has reversed negative sentiment despite technical weakness and approaching earnings—typically a cautious period. The research firm upgrades no doubt influenced this turnaround. However, with expectations high and the stock just 9% below all-time highs, it may be prudent to await next week’s earnings report before committing additional capital.
1% ▲
NVIDIA (NASDAQ:NVDA) experienced volatility this week but ultimately closed higher than last Friday’s level. Strong earnings and guidance from TSMC provided additional optimism for a potential breakout. It appears the lingering overhang from the Biden administration’s export restrictions continues to weigh on sentiment.
august bear notes
Nvidia remains in consolidation mode, neither breaking out nor breaking down. Market commentary continues to highlight the strong demand for the leading AI chip maker. Any negative pressure from the Biden administration’s chip export restrictions is likely to ease when the Trump administration takes over next week, potentially providing the catalyst needed to break out of this funk and push the stock past its previous all-time highs.
1% ▲
Occidental Petroleum (NYSE:OXY) saw early gains this week, supported by the continued recovery in crude prices. However, negative commentary from Mizuho and Capital One Financial trimmed those gains by week’s end. The stock appears to remain in a consolidation phase.
august bear notes
Macro factors will likely dictate the stock’s movement, but it’s reassuring to note that Warren Buffett has increased his stake to 28%, with an average cost of $53 per share. That being said, it does face operational challenges and lags behind its peers, so there may be better options as oil prices stabilize.
10% ▲
PayPal Holdings (NASDAQ:PYPL) saw a significant uptick, fueled by strong momentum from the banking sector kicking off earnings season with robust results. Additionally, PayPal benefited from price target upgrades this week by Citigroup and Wells Fargo, adding further support to its upward movement.
august bear notes
PayPal continues to tease long-time investors with its quick runs higher only to fade shortly thereafter. To regain momentum and return to triple digits, the company needs to deliver tangible growth and meaningful results from its “First Look” initiatives launched a year ago. The next major catalyst will likely come with early February earnings, but until then, investors should not get overly excited or add to their positions.
16% ▲
SoFi Technologies (NASDAQ: SOFI) had a surprisingly strong week, buoyed by bullish commentary from Citigroup and a coverage initiation by William Blair. The broader financial sector’s strong earnings reports provided additional tailwinds, while SoFi finalized a $525 million personal loan securitization deal, reinforcing investor confidence. With earnings set for the end of the month, expectations are running high.
august bear notes
SoFi stock delivered an unexpected surprise last week, especially considering its impressive run of over 84% in the past few months. Analysts appear to be warming up to this upstart, with some now giving a more balanced assessment of its unconventional fair market value accounting practices. While the rally may seem overstretched, market sentiment often defies traditional logic but nothing wrong with taking some profits.
