The S&P 500 notched its fourth straight winning month, closing August at a monthly high of 5,634. Monday saw the Dow make a new record high, but the markets were focused on Nvidias (NVDA) earnings report after Wednesdays close. The AI chipmaker then reported more than $30 billion in sales in its fiscal second quarter, up 122% from the same period a year ago. Profits more than doubled to $16.6 billion and posted modestly better-than-expected sales guidance for the current quarter. One would have thought those numbers would be bullish, but instead NVDA shares dipped as much as 5% in extended trading, in sympathy with other semiconductor companies. Super Micro Computer (SMCI)shares tanked 19% during Wednesdays session, having its worst weekly stretch since October 2018 and taking honors as the worst performer in the S&P 500 for August. Intel (INTC) also had a tough August, dropping just over 30%. Thursday was flat for the S&P 500, but it was Dollar Day. Dollar General (DG) lost 32% after it cut its outlook for sales and earnings for the full year, and Dollar Tree (DLTR) lost nearly 10% in a sympathy. On Friday Wall Street welcomed the July Core Personal Consumption Expenditures index, which rose an expected 0.2% month-on-month, and an annual rate of 2.6%, matching June's level and undershooting the 2.7% forecast. The S&P 500 gapped up at the open, but then hit session lows around noon. That said, the S&P 500 then staged a rebound, rallying up over 1% for the day and making new weekly and monthly highs. From a technical perspective, one of the primary signals we utilize is the relationship between 20 day Moving Average (MA) and 50 day MA. When the 20 MA > 50 MA, it is bullish, and the S&P 500 is right on the cusp of getting there next week. It should also be noted that the S&P 500 is less than 1% away from a new all-time high, and it got there without the help of NVDA, SMCI, INTC, DG and DLTR (all S&P 500 components) as they all have 50 MAs > 20 MAs. That said, the Fed will most likely start to bring rates down at their 17/18 September meeting, and falling rates are usually bullish for the markets. Putting a year end number for the S&P 500, well refer back to our 29 March weekly update when we said This equates to an S&P 500 year end close of 5746, close to our 2 March update range of 5,781 to 5,902. That said, a 1% monthly gain compounded over the next four months puts us at 5,862. Next week we get the Employment reports on Friday, then inflation numbers the following week. For TSP TIPS the C fund remains at the top of the Performance Ranking leaderboard, followed by the I and S funds. Next lets also look at their 20 MAs > 50 MAs. For the C fund, it will turn 20 MA > 50 MA on Monday if it closes at or above Fridays price. The I fund had the cross above on Thursday, and also made a new all-time high on Friday. The S funds 20 MA dropped below the 50 MA on Wednesday and Thursday, but bounced back to 20 MA > 50 MA on Friday. As such, we are recommending the following new investment mix.
The S&P 500 notched its fourth straight winning month, closing August at a monthly high of 5,634. Monday saw the Dow make a new record high, but the markets were focused on Nvidias (NVDA) earnings report after Wednesdays close. The AI chipmaker then reported more than $30 billion in sales in its fiscal second quarter, up 122% from the same period a year ago. Profits more than doubled to $16.6 billion and posted modestly better-than-expected sales guidance for the current quarter. One would have thought those numbers would be bullish, but instead NVDA shares dipped as much as 5% in extended trading, in sympathy with other semiconductor companies. Super Micro Computer (SMCI)shares tanked 19% during Wednesdays session, having its worst weekly stretch since October 2018 and taking honors as the worst performer in the S&P 500 for August. Intel (INTC) also had a tough August, dropping just over 30%. Thursday was flat for the S&P 500, but it was Dollar Day. Dollar General (DG) lost 32% after it cut its outlook for sales and earnings for the full year, and Dollar Tree (DLTR) lost nearly 10% in a sympathy. On Friday Wall Street welcomed the July Core Personal Consumption Expenditures index, which rose an expected 0.2% month-on-month, and an annual rate of 2.6%, matching June's level and undershooting the 2.7% forecast. The S&P 500 gapped up at the open, but then hit session lows around noon. That said, the S&P 500 then staged a rebound, rallying up over 1% for the day and making new weekly and monthly highs. From a technical perspective, one of the primary signals we utilize is the relationship between 20 day Moving Average (MA) and 50 day MA. When the 20 MA > 50 MA, it is bullish, and the S&P 500 is right on the cusp of getting there next week. It should also be noted that the S&P 500 is less than 1% away from a new all-time high, and it got there without the help of NVDA, SMCI, INTC, DG and DLTR (all S&P 500 components) as they all have 50 MAs > 20 MAs. That said, the Fed will most likely start to bring rates down at their 17/18 September meeting, and falling rates are usually bullish for the markets. Putting a year end number for the S&P 500, well refer back to our 29 March weekly update when we said This equates to an S&P 500 year end close of 5746, close to our 2 March update range of 5,781 to 5,902. That said, a 1% monthly gain compounded over the next four months puts us at 5,862. Next week we get the Employment reports on Friday, then inflation numbers the following week. For TSP TIPS the C fund remains at the top of the Performance Ranking leaderboard, followed by the I and S funds. Next lets also look at their 20 MAs > 50 MAs. For the C fund, it will turn 20 MA > 50 MA on Monday if it closes at or above Fridays price. The I fund had the cross above on Thursday, and also made a new all-time high on Friday. The S funds 20 MA dropped below the 50 MA on Wednesday and Thursday, but bounced back to 20 MA > 50 MA on Friday. As such, we are recommending the following new investment mix.