Historically, the final week of August has been positive for the S&P 500, with a median gain of around 0.5% since 1953 and 1.1% over the past 10 years. This offers some optimism ahead of September, typically the worst month for the market averaging a 0.7% loss. The upcoming week could see market movement driven by Nvidia's earnings report on Wednesday and the release of July's personal consumption expenditures price index on Friday, which will be closely watched for inflation insights.
INTEL
Intel is working with Morgan Stanley to defend against potential activist investors as CEO Pat Gelsinger attempts to turn around the struggling chipmaker. Intel is under pressure after losing its position as the largest US chipmaker in revenue to Nvidia. The company has also fallen behind others like AMD and Broadcom. Intel recently announced a 15% workforce reduction and is cutting its dividend. The company faces challenges in the AI market and previously missed out on the smartphone boom. The board recently saw the departure of director Lip-Bu Tan.
INTC (Daily). The stock has been on a steady decline throughout 2024, from a high of $50 per share to the current $20. Investors are setting 20.00 as a fair value. We believe only with management manoeuvres, then the stock have the potential to appreciate.
MICROSOFT
Microsoft will host a cybersecurity conference in September to address industry improvements after a faulty CrowdStrike update in July caused millions of Windows computers to crash, disrupting various sectors. The conference, set for September 10 at Microsoft's Redmond campus, will include discussions with CrowdStrike and other security firms on preventing similar issues. Topics include shifting applications from kernel mode to user mode, which could reduce system crashes. Microsoft aims to foster collaboration without giving its Defender for Endpoint product preferential treatment.
MSFT (Daily). Since early August, the price formed a double-bottom and has surged from 390.00. Microsoft had a technical problem but now has managed to overcome it. The nearest target is 431.00, which is also a liquidity area.
NVIDIA
Nvidia's fiscal second-quarter results, set for Wednesday, follow a turbulent summer for the stock. After peaking at over $140 per share in June, the share price fell below $91 in August due to market sell-offs and delays in its Blackwell chips. It has since rebounded to around $125. Despite high expectations, analysts remain confident in Nvidia's dominance in the AI chip market, expecting the stock to hold its value. Nvidia's stock is up over 160% this year and long-term investors remain bullish.
NVDA (H1). Based on the bullish projection line, the price is likely to correct to 120.00 before continuing the bullish momentum towards 135 again.
Fullerton Markets Research Team
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