The FCMS Investment Committee is pleased to share the latest insights on the current financial market and economic developments.

Market Perspectives

Here are the top things from our FCMS Investment Committee on current financial markets and economic developments:

1. 1. Investors Face Liquidity Concerns Despite Positive End to Week

      Last week, investors were faced with a lack of liquidity in late August, which became more apparent as they assessed the latest thoughts on monetary policy from Fed Chair Jerome Powell and earnings from AI-darling NVIDIA. Despite several tough weeks, stocks and bonds managed to end the week on a positive note. However, the price action during the week, particularly around NVIDIA’s impressive earnings beat and guidance raise, did not instill much confidence in the short term. As we head towards Labor Day, investors should prepare for market volatility, especially when trading desks are fully staffed.

   2. Chairman Powell’s Speech Aligns with Expectations

      Chairman Powell’s speech at Jackson Hole met the anticipated expectations, offering something for the hawks and doves. However, the key takeaway is that the Fed, like everyone else, is closely monitoring the economy. If the economy strengthens, interest rates will increase; if it weakens, rates will decrease.

   3. NVIDIA Beats Expectation and NASDAQ Outperforms

      NVIDIA had a successful earnings report with higher-than-expected earnings and a positive outlook for the next quarter. However, despite gaining almost 10% in after-hours trading, the stock only rose by 0.1% the following day and fell by 2.4% on Friday. This unexpected price movement could be because NVIDIA had already gained almost 9% before the earnings report. Despite this, the NASDAQ 100 had a 1.7% increase for the week, performing better than most major equity indices. This may suggest that the large-cap tech industry could experience a slowdown in the near future.

What Happened Last Week?

Here is a recap of the top things that happened last week:

• Last week, there were fluctuations in the markets, but stocks and bonds managed to make slight recoveries.
• Fed Chair Jerome Powell delivered a keynote speech in Jackson Hole, emphasizing the importance of data-dependent decision-making.
• Volatility in the AI market persisted after NVIDIA surpassed earnings estimates and provided optimistic guidance.

What We’re Watching This Week

Here is a recap of what we’re watching for this week:

• This Friday’s jobs report will be the highlight of a busy week for US economic data.
• Inflation readings for Europe and the Fed’s preferred gauge will be the focus for bond traders.
• Signs of exhaustion to recent trends are causing price action in the AI, mega-cap tech trade, and US equities.

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Securities and Investment Advisory Services offered through Founders Financial Securities, LLC (FFS). Member FINRA, SIPC and Registered Investment Advisor. The commentary in this report is not a complete analysis of every material fact in respect to any company, industry, or security. This material contains the opinions of the author(s) but not necessarily those of FFS, and such opinions are subject to change without notice. This material has been distributed for informational purposes only. Forecasts, estimates, and certain information contained herein are based upon proprietary research and do not constitute a solicitation to buy or sell any security or product and may not be relied upon in connection with the purchase or sale of any security or device. Index information is intended to be indicative of broad market conditions. The performance of an unmanaged index is not indicative of the performance of any particular investment. Individuals cannot invest directly in any index. Information contained herein has been obtained from sources believed to be reliable but is not guaranteed. Investors should consult their financial, tax, and legal advisors before making investment decisions. Past performance does not guarantee future results. Materials above are produced by Horizon Investments, LLC, which is not affiliated with FFS. © 2022 Horizon Investments, LLC.