'Recession or No Recession?' Weighs on Stocks Once More

The Nasdaq is heading for its third-straight weekly win

Deputy Editor
Aug 5, 2022 at 1:06 PM
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On the heels of July's impressive performance, Wall Street found footing to kick off the first session of August; however, by the day's end, tumbling oil prices pushed the major indexes lower to snag modest daily losses. The losses intensified on Tuesday, however, after U.S. House Speaker Nancy Pelosi traveled to Taiwan, resulting in threats from Chinese officials. 

Optimism returned in full force by Wednesday afternoon, as strong earnings and promising economic data provided tailwinds. Snapping its two-day losing streak, the Dow Jones Industrial Average (DJI) rose more than 400 points for the session, while the S&P 500 Index (SPX) and Nasdaq Composite (IXIC) also turned in notable wins. Weekly jobless claims data pushed the major benchmarks marginally lower on Thursday. With the weekend looming, the Dow and S&P 500 are heading for marginal weekly losses, while the Nasdaq is on track for its third-straight weekly win. 

Stocks to Watch in August

Wall Street's strong performance last month likely has investors itching to get in on the action. Those with a bullish appetite may want to consider Apple (AAPL), which, when looking back 10 years, tends to provide solid returns during the month of August. In addition, China-based e-tail giant JD.com (JD) looks like it has an upbeat month ahead of it based on this flashing bullish signal, while cloud concern Box (BOX) could extend its recent rally thanks to an impressive technical setup. However, those with a penchant for pessimism may want to keep an eye on General Electric (GE) and/or Exxon Mobil (XOM), as both landed on a list of the worst S&P 500 stocks to own in August.

Tales from the Earnings Confessional

The deluge of corporate reports investors had to sift through this week included a host of post-earnings analyst notes as well as at least one major c-suite update. Concerning the latter, Match Group (MTCH) plummeted after releasing fiscal third-quarter results, especially following the abrupt departure of the CEO of the company's Tinder unit. Elsewhere, bears targeted Airbnb (ABNB) and Under Armour (UAA), after both companies issued outlook warnings. Conversely, bulls charged toward Sofi Technologies (SOFI) after the fintech concern posted an impressive beat-and-raise, while Starbucks (SBUX) scored a round of price-target hikes on strong quarterly results. Additional notable reports came from Robinhood Markets (HOOD) -- which also announced a significant job cut -- as well as a top-line miss by Caterpillar (CAT).

Investors Await More Earnings, Inflation Data

Another deluge of corporate earnings reports are set for release next week, while investors will get a look at the latest consumer price index (CPI) and inflation figures. In the meantime, take a look at how the SPX could move after such a strong July performance, as well as some of the index's most notable levels to watch following the recent Fed decision. 

 

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