August 22, 2023

Markets:

U.S. stock futures rose Tuesday as Wall Street tried to build momentum following positive sessions for the Nasdaq Composite and S&P 500.

The Nasdaq Composite posted its biggest advance of the month during Monday’s main trading session, rising 1.6%. The S&P 500 added close to 0.7%. The two benchmarks snapped a four-day slide, and the Nasdaq notched its biggest one-day advance since August. The Dow ticked down 0.1%.

Notably, the broad market index and the tech-heavy Nasdaq were able to post gains even as the yield on the 10-year Treasury reached its highest level since November 2007, gaining about 9 basis points to trade at 4.34%. Tech shares historically struggle in a high-rate environment, making the tandem rise with yields on Monday more striking for Wall Street.

Investors are keeping a close eye on Nvidia’s earnings due Wednesday. Its shares rose more than 8% Monday, making it one of the largest tech gainers. The company is largely seen as a bellwether on the AI-boom and sentiment.

On the economic data front, Wall Street will be looking toward the Philadelphia Fed’s nonmanufacturing survey, as well as the Richmond Fed’s manufacturing survey results. Existing home sales data for July is also scheduled for release Tuesday morning.

Traders are also anticipating Fed Chairman Jerome Powell’s remarks at Jackson Hole on Friday for more insight on the central bank’s inflation outlook.

Portfolio:

Monster session to start the week and as we stated toward the end of last week, we are seeing the bounce from the lines we stated and now we are seeing potential follow through early on today. Again, stay cautious and patient here. If this was after Labor Day, we would want to be a bit more aggressive, but we do think traders are beginning to front run the next move. The pain trade remains higher. I know that's hard to digest for many but that's facts. The number of shorts and those who continue to chase the short side during this move higher is staggering. Everyone wants to call a top. Just follow the trend here. Be ready today. No changes needed to our current holdings of AEHR, COUR, NNDM, HPE, and CVE. Let's have a great session.