August was a rollercoaster for U.S. stocks, but they ended the month on a high note with solid gains. What began with panic over growth fears quickly shifted as investors embraced a “soft landing” narrative, thanks to resilient U.S. growth and easing inflation. New data showed personal spending up 0.5% in July, while inflation hit the expected 2.5%, calming nerves and slightly reducing expectations for Fed rate cuts. Despite early losses—S&P 500 down 7.3%, Nasdaq off 10.7%, and Dow dipping 5.4%—the major indexes rebounded. By month’s end, the S&P gained 2.3%, Dow climbed 1.8%, and Nasdaq edged up 0.7%, with financials, tech, and healthcare leading the way.
#NVDA closely mirrors market movements. Despite a strong earnings report, the market’s reaction may have rattled new investors. The numbers didn’t meet expectations, causing the stock to dip. By the end of August, it found temporary support around $116. If that level breaks, the next target could be its previous low between $90 and $100. Given the seasonal volatility in September and October and its high market correlation (β 1.68), it’s crucial to keep a close watch—because one move tends to follow the other.
Meanwhile, several stocks broke through resistance last week, while the SPX has been consolidating for two weeks after breaking its 50-day moving average on August 15. The index moved higher but hit resistance at 5651, with higher volume on the last day of the month, suggesting the market’s intention to push upward. Although September isn’t traditionally a rally month, especially in a presidential election year, the market’s behavior hints at potential upward momentum.
In August, our long-term investment portfolio gained 7.98%, bringing the cumulative gain since May 2020 to 159.62%. Our dynamic investment portfolio added 1.11%, leading to a total return of 79.54% since May 2020. (For detailed insights, refer to our latest performance report). A closed note this month involving #AAPL, #ROKU, and #MARA resulted in a loss, bringing the structured note portfolio’s average return to 13.86%, a slight drop of less than 1% compared to last month, highlighting the benefits of diversification.
As September begins, the major indexes are near yearly highs, with momentum still favoring the bulls. Markets might attempt to push higher, but the next two months are seasonally tough for stocks. Investors are hoping for a rate cut at the Fed’s September meeting after strong macroeconomic data, including revised GDP growth and stable jobless claims. However, concerns linger around rate cuts and Nvidia’s earnings, which didn’t fully meet investor expectations. Post-Labor Day political volatility and negative seasonality could also impact markets, making a pullback likely, though the timing remains uncertain.