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📝 The Market Faces These Two Tests That Will Determine Its Next Move

The overall market is sitting at an inflection point, and this will determine which ways it goes next. Plus, two risk-off stocks that could crash

August 23, 2024

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Happy Friday Zingernation! It’s that time of the year: school is back in session. This means if it were 10 years ago, I’d be laying out my best Abercrombie outfit, and somehow find a way to upset my teachers by the end of the first day. But, I won’t miss the tests. And speaking of tests, the market is about to have two big ones that could change the entire direction of the overall market, plus two ‘risk-off’ stocks that could crash this quarter.

—Aaron Bry & Nic Chahine

MARKET SNAPSHOT

Yesterday: The market took a breather from its recent rally, selling off in the afternoon ahead of Powell’s speech today. Tech was the laggard on the day, with the $QQQs closing down more than 1%.

On Our Radar: It’s Jackson Hole day! All eyes will be on Jerome Powell’s speech at 10am ET.

TOP STORY

Basically: Traders apparently are baking in expectations that Federal Reserve Chairman Jerome Powell will confirm at Jackson Hole that a rate cut is forthcoming. After Thursday’s hiccup, stocks appear on track to open higher, with the index futures modestly higher early Friday.

So: While delving into Powell’s speech, fund manager Louis Navellier said, “I suspect he’s going to say that the inflation has been in the Fed’s target range in the last three months, and he has to address the labor market as well.” Here’s how the experts think the market will react to Powell’s comments.

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E-commerce has the potential to capture 41% of global sales by 2027, but the industry must first get out of its own way. Online retailers have failed to change with the times and instead have grown stagnant over the past several decades. 

The rise of generative AI presents a unique opportunity for the industry to play catch up and stop a trend in which 70% of shoppers abandon their carts before checkout. 

Rezolve AI is leading the charge with its Brain chatbot solution, which solves a major pain point for e-commerce companies.

FIVE ZINGERS

Keep Pedaling, But Going Nowhere: Peloton’s stock moved higher following the company’s earnings report, but is now going straight back down.

Analyst Calls: Intuit shares are trading higher following the tax giant’s earnings report. Here’s what the analysts are saying.

That’s A Threat: AstraZeneca is threatening to move its vaccine production to the United States. Here’s why.

Get Back To Work: The Canadian government appeared to avoid potential disaster, ordering railroad workers back to work amid a strike.

Perkin’ Up: Semiconductor names like AMD and NVIDIA are perking up ahead of Jerome Powell’s speech. Here are the details.

ONE FOR THE ROAD

Basically: As of Aug 23, 2024, two stocks in the consumer staples sector could be flashing a real warning to investors who value momentum as a key criteria in their trading decisions.

So: The RSI is a momentum indicator, which compares a stock’s strength on days when prices go up to its strength on days when prices go down. When compared to a stock’s price action, it can give traders a better sense of how a stock may perform in the short term. Here are two overbought ‘risk off’ stocks that could come crashing down in Q3.

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