In August, the S&P 500 rebounded from a rough start and is nearing its all-time high. However, September is historically a weaker month for stocks. Investors await the Federal Reserve's two-day policy meeting on September 17-18, expecting a rate cut, though the extent remains uncertain. The Fed's approach to interest rates will be crucial, with some experts questioning whether a 1 percentage point cut by year-end is too optimistic given the robust economic data. Market bulls are hopeful for a positive year-end, particularly if the S&P 500 can maintain key support levels and a rebound in tech stocks.
AMAZON
Amazon’s checkout function had technical issues on Friday, preventing customers from completing purchases and displaying error messages with photos of dogs. Despite the issues, Amazon Web Services (AWS) reported no problems. The glitch occurred when Amazon was promoting Labour Day discounts, leading to missed sales opportunities. The company has warned that technical incidents can impact sales and perceptions of their services.
AMZN (H1). Starting from early August, the stock price rose 18% from 155.60 to 182.30. We expect Amazon to face some resistance at 180.00 and have a slight retracement towards 170.00 before moving up again.
NIKE
More young consumers are favouring New Balance and Adidas over Nike, according to Stifel Financial. Nike’s market share is slipping as competitors gain traction with popular styles like New Balance's shoes and Adidas' Samba and Gazelle. Nike’s classic styles, including Air Force 1 and Jordan 1, are losing appeal. Stifel's back-to-school survey shows a significant drop in Nike's style references from 88.2% to 61.4%, while New Balance and Adidas have seen sharp increases. This trend has led Stifel to lower Nike's earnings estimates and reduce its price target by $9, implying a 6.3% downside. Despite this, most analysts still have a buy rating on Nike, with an average price target suggesting a potential 7% upside.
NKE (Daily). Since the close of last year, the price has plunged 42% from 123.35 to 71.00, indicating that it has underperformed throughout the year. 89.00 level awaits as the solid support turns resistance.
ALIBABA
Alibaba has completed a three-year regulatory rectification process following a 2021 antitrust fine for monopolistic practices. The fine was related to Alibaba’s “choose one of two” policy, which forced merchants to pick between e-commerce platforms. The State Administration for Market Regulation (SAMR) announced that Alibaba has now ceased this practice and achieved compliance. Shares of Alibaba rose nearly 3% on this news. The conclusion of the rectification process marks a positive step for Alibaba, potentially easing the regulatory pressure that has impacted its stock and growth. The SAMR's move may also reflect a broader softening stance toward private tech firms in China. Despite recent recovery signs, Alibaba faces challenges from increased competition and a cautious consumer base.
BABA (Daily). Alibaba has been trending higher in the last 2 months. We expect the price to head towards the 77.00 level before continuing the bullish momentum.
Fullerton Markets Research Team
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