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Good morning, Trendsters!
It’s safe to say that last week left the market feeling a little bruised. The S&P 500 took a 4.3% hit, marking its worst week in two years, and Nasdaq wasn’t far behind, down 5.77%. It’s September, and just when everyone thought it was safe to come back from summer vacations, the markets had other plans. But hey, September does have a history of testing investor patience, and this year looks no different.
This week, the spotlight shifts to some key market movers. Oracle’s earnings could provide a needed boost, while the Consumer Price Index (CPI) and Producer Price Index (PPI) reports are bound to shake things up midweek. And don’t miss our Chart of the Day, where we’ll be diving into C3.AI, a stock that might just be presenting a strong buy opportunity before the end of the year. If you’re looking for something a bit lighter, stay tuned for some fun market trivia and insights that might just give you a different perspective on what’s happening out there. Let’s get into the numbers and see what’s on the horizon this week! |
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Sam Altman’s Secret Investment: Bigger Than OpenAI?
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Billionaire Sam Altman is backing a lesser-known company that could outshine OpenAI. With ties to the US Military and a boost from a Trump-era law, this could be one of the biggest tech stories yet!
Discover the full story in our report!
By clicking the link above you agree to periodic updates from Wealthpin and its partners (privacy policy) |
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Market Blues Deepen as Economic Concerns Weigh
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Trendsters, it was a turbulent week for the markets, with stocks wrapping up their worst performance in 18 months. Economic uncertainty and a significant decline in the once-booming semiconductor sector fueled the downward spiral. The August jobs report, while showing a rebound in job growth, fell short of expectations and highlighted a softening labor market. Despite this, the report wasn't as dire as Friday's market reaction suggested, leading some analysts to believe a September rate cut by the Fed remains likely.
The market's dramatic response to a less-than-disastrous jobs report underscores its heightened sensitivity to any signs of economic weakness. Investors appear to be exercising caution, favoring defensive sectors like real estate, staples, health care, and utilities over growth-oriented sectors like info tech and consumer discretionary.
Semiconductor stocks, in particular, faced significant headwinds following Broadcom's (AVGO) earnings and outlook, contributing to a nearly 12% weekly loss for the PHLX Semiconductor Index (SOX). This weakness in the semiconductor sector could have broader implications for the market, given its role as a proxy for AI-related growth. Market Closing Prices: - S&P 500: Down 1.73% to 5,408.42
- Dow Jones Industrial Average: Down 1.01% to 40,345.41
- Nasdaq Composite: Down 2.55% to 16,690.83
- 10-year Treasury note yield: Down two basis points to 3.71%
- Cboe Volatility Index (VIX): Up to 22.21
Key Takeaways and Strategies - Proceed with Caution: The market's heightened sensitivity to economic weakness suggests a cautious approach may be warranted.
- Consider Defensive Sectors: Defensive sectors like real estate, staples, health care, and utilities could offer some stability in the current environment.
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Monitor Semiconductor Sector: The weakness in semiconductor stocks could signal broader market concerns about AI-related growth expectations.
- Watch for Technical Rebound: Slipping breadth and heavy losses could create an opportunity for a near-term technical rebound, but the market isn't quite in oversold territory yet.
Investors may want to remain cautious in the short term, focusing on defensive sectors while keeping an eye on key support levels for potential buying opportunities. |
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What did the market say to Jerome Powell after the jobs report? *"We're not sure if we should laugh or cry. Can you give us a * rate ing?"
Oh, the joys of market humor! It seems even the Fed's data-dependent approach can't escape a bit of playful ribbing. While investors grapple with uncertainty, it's good to remember that a little laughter can help ease the tension.
So, whether you're feeling bullish or bearish, let's keep our spirits high and our wits sharp. After all, as the saying goes, *"A good laugh is worth more than a thousand * points * on the Dow." |
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C3.AI - Is This AI Stock Ready for a Comeback?
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C3.ai has been stuck in a bit of a downward spiral lately, but don't count it out just yet! Our chart analysis suggests this AI player might be gearing up for a rebound. Here's the lowdown: - Channel Down, But Nearing a Bottom: C3.ai's been trading within a Channel Down pattern for over a year, and it's getting awfully close to its bottom.
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Oversold Signal Flashing: The 1D RSI has dipped below 30 – a classic oversold signal. Historically, this has been a reliable buy indicator for C3.ai.
- Long-Term Potential: While some consolidation or a slight dip is possible, the long-term outlook, particularly for the rest of the year, looks promising.
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Fibonacci Target: Previous bullish legs topped out near the 0.785 Fibonacci retracement level, suggesting a potential target of 28.50.
The Takeaway:
C3.ai might be down, but it's certainly not out. For those with a taste for a bit of calculated risk, this AI stock could offer a compelling buy opportunity at its current level. Remember, fortune favors the bold, especially when the charts are whispering sweet nothings of a potential comeback. |
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Markets Search for Lost Mojo After a Rough Week
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Last week, the S&P 500 took its hardest hit in two years, dropping 4.3%, while the Nasdaq fell 5.77%, marking its worst performance since January 2022. With summer vacations over, the market delivered a harsh reminder to investors: September rarely plays nice.
The biggest issue? The U.S. economy shows signs of slowing, and everyone is waiting for the Federal Reserve’s next move. The Fed’s meeting isn’t until mid-September, so for now, the markets are left to stew in uncertainty. Historically, September has been tough for stocks—seven down years between 2014 and 2023—and this time seems to be following suit. That said, the drops for the S&P 500 and Dow since their peaks are relatively mild, down 4.6% and 3%, respectively. The real pain is in the Nasdaq, down 10.6% since July, officially putting it in correction territory. Nvidia, one of the stars of 2023, has slid 27.3% since its peak in June, showing just how quickly sentiment can shift.
Looking ahead, the CPI and PPI reports this week could create some volatility. And while earnings reports are light, Oracle is set to release numbers today, with expectations of $1.32 a share in earnings and $13.2 billion in revenue. Oracle’s stock is up 34.5% this year, so the market will be watching closely. As we move through September, keep an eye on the 200-day moving average for the S&P 500, around 5,100. The market may not be in full oversold territory yet, but with oil prices falling and gas prices dropping, conditions are ripe for a rebound—if economic data cooperates. |
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Chips Down, Builders Up, and the Fed in Focus
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Broadcom's softer outlook sent semiconductor stocks reeling, highlighting concerns about a potential slowdown in demand for chips across various industries. Meanwhile, homebuilder stocks got a boost from hopes of interest rate cuts, demonstrating the market's sensitivity to monetary policy shifts. U.S. Steel also saw gains following an analyst upgrade and news of a potential blocked sale.
The August jobs report painted a mixed picture, with job growth rebounding but still falling short of expectations. Wage growth exceeded forecasts, however, adding a layer of complexity to the Fed's decision-making process. The slower pace of job creation and potential downward revisions to prior data suggest a softening labor market, which could impact consumer spending and corporate earnings. Key Takeaways: - Semiconductors face headwinds as Broadcom's outlook raises concerns.
- Homebuilder stocks rally on rate cut expectations.
- Mixed jobs report adds complexity to the Fed's decision.
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Market remains sensitive to economic news and Fed policy.
Looking Ahead:
Investors will get a brief respite from major economic data before a flurry of reports later in the week. The CPI and PPI reports will be critical for gauging inflation and influencing the Fed's upcoming rate decision. Additionally, the University of Michigan's consumer sentiment report will provide insights into consumer confidence.
On the earnings front, Oracle and Adobe will be in the spotlight, while Apple's iPhone 16 launch could generate excitement in the tech sector.
The market's focus remains on the Fed, with futures trading indicating a higher probability of a 25-basis-point rate cut. As investors await the central bank's decision, expect continued volatility and a heightened sensitivity to economic data and corporate news. Remember, in this market environment, staying informed and adaptable is key. |
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MARKET MUSINGS & TIME CAPSULE |
Random Musings If the market were a pet, it'd be a cat right now - aloof, unpredictable, and prone to sudden mood swings.
The Fed's balancing act between inflation and economic growth is like walking a tightrope. One wrong step, and it could be a long fall. Tech stocks' recent decline reminds us that even the shiniest stars can dim. It's a good reminder to diversify your portfolio. The semiconductor sector's stumble is like a canary in a coal mine, signaling potential trouble for the broader economy. Amidst the market turmoil, C3.ai's resilience is a beacon of hope. Sometimes, the best opportunities emerge from the chaos. On this day in history, September 9
September 9, 1947: The first computer bug was discovered—a literal moth causing trouble in the system. In today’s market, it’s not moths, but macro data bugs causing the disruptions.
September 9, 1956: Elvis made his debut on the Ed Sullivan Show. Just as AI stocks debuted with fanfare, the market sometimes overreacts to the hype before settling down.
September 9, 1971: Attica Prison riot began. A reminder that sometimes when things seem under control, volatility strikes, just like the recent market upheaval. September 9, 1999: The Nasdaq hits a new high—only to crash a few months later. Today’s tech sector has echoes of this, with overbought signals across many stocks.
September 9, 2001: The New York Stock Exchange prepares for the worst after 9/11. A lesson in the unpredictability of markets—sometimes the unexpected reshapes the future. |
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Searching for That Market Mojo |
As we close out today’s newsletter, consider this quote by Ralph Wanger: “A good company can become a bad investment if you pay too much for the stock.” In a week where semiconductors tumbled and the market struggled to find its footing, it’s a reminder that timing and price matter. Even the strongest names, like Nvidia and Broadcom, are vulnerable when expectations outpace reality.
With key reports like CPI and PPI ahead, the market may find its momentum again soon. But the real lesson is that smart investing isn’t about catching every move—it’s about knowing when to act and when to wait.
So, while we wait for the market to reclaim its mojo, stay focused on the fundamentals. Good opportunities come to those who don’t chase the market—they’re ready when the price is right. |
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