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The End of a Bear Market Rally?

The End Of A Bear Market Rally

Last Week’s Market Activity

Last week we saw all of the major indices fall between 1%-3%, leading many to believe we are witnessing the end of a bear market rally. This is because there weren’t many catalysts that would lead the market to draw down in the manner that it did, aside from a lackluster earnings report from Target. Fortunately for everyone, there won’t be many significant market catalysts over the next couple of weeks, as we wait for the next CPI release.

Macroeconomic Indicators

We saw some disappointing numbers from Target last week, and warnings from Lowe’s and Home Depot, citing that demand could soften in the coming quarters. This is no surprise, as the housing market is teetering on the edge right now. With rising mortgage rates and one of the sharpest declines in sales over the past two decades, the housing market is in a tough spot. A sharp decline in the housing market will mean devastation across many industries, as there are countless industries that rely on the housing market, such as mortgage banking, real estate brokerages, service providers, and product suppliers.

Upcoming Market Catalysts

Fortunately for us, the coming week will not be nearly as eventful as this week. We have Rental and Homeowner Vacancy Rates being announced on Wednesday. Key job data, including the Unemployment Rate, Average Hourly Earnings, and Nonfarm Payrolls will be released on Friday. It will be particularly important to pay attention to Friday’s releases, as they will give us a better idea on how the US economy is performing.

Notable Earnings Releases

08/22 – Zoom Video Communications (ZM)

08/23 – Intuit (INTU), JD.com (JD), Pinduoduo (PDD), XPeng (XPEV), J.M. Smucker Company (SJM), Advance Auto Parts (AAP), Dick’s Sporting Goods (DKS), Toll Brothers (TOL), Macy’s (M), Nordstrom (JWM)

08/24 – NVIDEA (NVDA), Salesforce (CRM), Snowflake (SNOW), Autodesk (ADSK), NIO (NIO), Williams-Sonoma (WSM)

08/25 – Toronto Dominion Bank (TD), Dollar General (DG), Dollar Tree (DLTR), Ulta Beauty (ULTA)

After some not-so-exciting earnings calls over the past week or two, this week gets a little more exciting.

This week we see some more big tech giants, like ZM, INTU, NVDA, CRM, and SNOW report, which will undoubtedly move markets. Everyone was left on the edge of their seats after NVDA released some disappointing preliminary earnings a couple of weeks back, so it will be interesting to see how their report is received.

Some interesting Chinese companies are reporting their earnings this week as well. Companies like JD, PDD, XPEV, and NIO will give us an idea of how China is performing during these turbulent times.

Companies such as SJM, AAP, DKS, M, JWN, WSM, DG, DLTR, and ULTA will give us an idea of how the consumer is spending their money. This week provides a vast array of retailers, from jams and jellies to makeup, and everything in between, we’ll definitely receive some great insight on the consumer

Lastly, Toll Brothers (TOL) will give us some insight into the critically important housing market. While many builders have been beating their drums and telling us that sales are remaining fine, it’s important to remember that real estate sales are a lagging indicator. After all, it can take a few months to go from the acceptance of an offer to the closing table when it comes to real estate transactions. So it will be incredibly interesting to see what TOL has to say on their conference call.

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