Data Not Conducive To Wall Street’s “Soft-Landing” Scenario

One of the two major economic/market events that occurred last week (week of August 20) was the stellar performance of Nvidia (NVDA) which, unlike the retailers, beat on both top and bottom lines and whose stock price has soared from a 112 low last October to a high print of nearly 503 early on Friday morning (August 25). That’s nearly a 450% rise in less than a year. As a result, on Friday, shareholders began taking profits as the stock closed within pennies of its low for the day at just over 460, down -8.5% from its early morning high.

Nvidia’s one day performance feels very much like a compact version of the S&P 500’s performance over the past month. After a monster rise of 28% from last October 12^th’s low point (3577) to its July 24^th high (4582), over the next month (to August 24) the S&P 500 fell -4.6%, closing at 4369 on Thursday before a small rally on Friday. We attribute this small rally to Fed Chair Powell’s recognition, in his keynote speech at the Fed’s annual Jackson Hole symposium, that progress has been made on the inflation front and that there is uncertainty over the timing of policy lags on the economy. Hints, perhaps, that the tightening cycle may be nearing its end.