Pre-Market in Green

Pre-market futures are filling in the gaps from yesterday’s modest selloff: the Dow is +312 points, the S&P 500 +35, the Nasdaq +201 and the small-cap Russell 2000 +23 points. Ten-year bond yields are back below +4.7% by a smidge, while the 2-year holds beneath +4.2%. Spot oil prices are steady, with WTI just below $87 per barrel (/bbl) and Brent crude just below $94/bbl.

These are narrow victories in the near term, but they matter to early birds trading in the pre-market. This goes especially for a Friday morning in August without any major economic or earnings reports to sift through. The U.S. has shifted its policy to economic warfare in its military campaign against Iran, which began with major bombing six months ago and resulted in the closure of the Strait of Hormuz.

BJ’s Stores Beats Q2 Estimates

Ahead of the opening bell, and putting something of a cap on retail earnings results for the week, BJ’s Wholesale Club BJ posted easy beats on both top and bottom lines for its Q2 this morning. Earnings of $1.36 per share outpaced the Zacks consensus by two solid dimes, and improving from the $1.14 per share reported a year ago. Revenues of $6.09 billion improved over expectations by a robust +3.54%.  

What to Expect from the Market Today

After today’s open, look for the August print on flash S&P Manufacturing and Services PMI. Both are expected to tick up from previous levels: to 54.0 on the Manufacturing side and +53.9 on Services. Both look safely in growth territory, above the 50 threshold.

Obviously, we will also remain in tune with developments in Iran regarding U.S. strategy, etc. Oil prices are now up over the past two weeks, so anything that sends prices the opposite direction would likely be welcomed by the stock market. Also, notable crypto gains this week have garnered some attention, triggered by the liquidity move from the U.S. Treasury on long-term bonds. Crypto investing had been rather dire ahead of this news, but cryptocurrencies are up double-digits this week.

What to Expect from the Market Next Week

Arguably the biggest earnings report of Q2 earnings season comes mid-week next week: Zacks Rank #2 (Buy)-rated NVIDIA NVDA — still the AI play among AI plays — reports quarterly results after the closing bell on Wednesday afternoon. Expectations are for still-impressive +99% earnings growth on +96.5% gains year over year in revenues. These, believe it or not, represent something of a cooling-down period on the bottom line (May earnings surged +140% year over year), as comps grow tougher to obliterate after several quarters of outsized gains.

Also Wednesday of next week, Personal Consumption Expenditures (PCE) for July are due for release. Last time around, this key inflation metric showed +3.7% year over year on headline, +3.3% on core. Clearly these are much warmer than the Fed’s +2% inflation target. Q2 GDP gets its second revision in the same batch of news items; investors look for an upward revision from the initial read of +1.5%.

Finally, the annual Jackson Hole symposium is scheduled for late next week. This year’s theme is “Financial Innovation: Implications for Payments and Policy.” Fed Chair Kevin Warsh is scheduled to deliver the keynote address, his first Jackson Hole summit since taking over as head of the Fed.

Beyond Nvidia: AI's Second Wave Is Here

The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com