Nvidia and Jackson Hole

Estimated reading time: 7 minutes

As many people take off on their late-summer vacations, trading volumes are entering one of the quietest periods of the year. But that doesn’t mean there won’t be news to pay attention to. 

At a Glance

• The news: Semiconductor heavyweight Nvidia (NVDA) reports earnings on Wednesday. Meanwhile, the Federal Reserve Bank of Kansas City hosts its annual Economic Policy Symposium in Jackson Hole, Wyoming, from Thursday to Saturday.
• The context: Nvidia’s results will serve as the single best read into the overall artificial intelligence story. On the macro front, Fed leaders have historically used the Jackson Hole gathering to discuss big issues affecting the global economy. This is Kevin Warsh’s first symposium as chairman, and given his resistance to forecasts, it’s unclear what he might say.
• Your move: The Fed chairman’s Jackson Hole speech often lays out longer-term thinking, not short-term intentions. Investors should take the same approach and reflect on their longer-term goals and strategy. Near retirement or expecting some major expenses? Perhaps it would be appropriate to take some risk off the table. Early in your career or have a long time horizon for your investments? It could make sense to establish multi-year positions and sit through any volatility that comes.

Nvidia (NVDA) reports its quarterly earnings after the Wednesday closing bell. The semiconductor company is arguably the centerpiece of the AI boom, and its results have become a macro market driver in their own right.

Investors will be interested in demand for AI chips and plans for additional investment from the hyperscalers (Amazon, Microsoft, Alphabet, Meta, and Oracle). They’ll also be looking for insights into the push-and-pull between models: Frontier labs like OpenAI and Anthropic are competing against cheaper open-source model providers out of China, a potential source of concern ahead of expected IPOs for the American labs.

After the Nvidia and AI dust settles, the focus shifts to the broad economy. In recent years, the Kansas City Fed’s annual Economic Policy Symposium in Jackson Hole offered clues about the path of interest rates. But that was when it was the Jerome Powell Fed; This is now the Kevin Warsh Fed. There’s a lot of uncertainty about what Warsh’s debut address may look like, but what we’ve seen from his tenure so far suggests investors should be ready for anything.

Warsh has publicly — and repeatedly — criticized forward guidance, arguing that it boxes policymakers into a corner and leads to the market “playing the ref, not the ball.” So, it’s unlikely Warsh will give a clear signal of what the Fed’s September interest rate decision might be. Instead, we may get updates on his task forces and other operational frameworks at the Fed.

In particular, markets will probably be sensitive to discussion of Fed communication policy, any changes to the frequency of Fed meetings (in the July meeting minutes, the chairman floated going from eight meetings to six), and its “reaction function” (how it interprets and responds to economic data).

On the Docket

Monday

• 8:30am ET | July Chicago Fed National Activity Index: This monthly index incorporates 85 indicators from four categories: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories.

Tuesday

• 8:15am ET | ADP Weekly Employment Change: This survey offers insight into weekly private sector employment trends. 
• 8:30am ET | August Philadelphia Fed Services Activity: The Philadelphia Fed surveys executives in the region’s services industry on business conditions and their outlook. 
• 9:00am ET | June FHFA House Price Index: This is a broad measure of single-family house prices released by the Federal Housing Finance Agency. 
• 10:00am ET | August Richmond Fed Manufacturing Activity: The Richmond Fed surveys manufacturing executives in the region on business conditions and their outlook.  
• 10:00am ET | July New Home Sales: While new homes are a minority of overall home sales, they tend to be more cyclical and give insight into developing trends. 
• 10:00am ET | August Richmond Fed Services Activity: The Richmond Fed surveys executives in the region’s services industry on business conditions and their outlook. 
• 10:00am ET | August Conference Board Consumer Confidence: How consumers feel about economic conditions affect their spending habits. This survey places a particular focus on job availability and the state of the labor market.
• Earnings
  • Large & Mid-Caps: Intuit (INTU)

Wednesday

• 7:00am ET | Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market. 
• 8:30am ET | July Personal Income and Spending: Consumer spending accounts for about two-thirds of economic growth in the U.S..
• 8:30am ET | July Personal Consumption Expenditures Price Index: The Fed says this inflation metric is the best measure of price changes.  
• 8:30am ET | July Factory and Durable Goods Orders: These metrics give insight into underlying trends for leading cyclical indicators.  
• 8:30am ET | GDP Second Estimate: The primary measure of economic activity, Gross Domestic Product (GDP) is measured as total expenditure on U.S. goods and services.
• Earnings
  • Mega-Caps: NVIDIA (NVDA)
  • Large & Mid-Caps: CrowdStrike (CRWD), Salesforce (CRM), Synopsys (SNPS), Agilent Technologies (A), Veeva Systems (VEEV), Williams-Sonoma (WSM), HP (HPQ), JM Smucker (SJM)

Thursday

• 8:30am ET | July Retail Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.  
• 8:30am ET | July Wholesale Inventories: Wholesalers and retailers often operate as intermediaries for the sale of manufactured products, serving as a key part of the goods supply chain.
• 8:30am ET | Weekly Jobless Claims: This high-frequency labor market data gives insight into initial and continuing filings for unemployment benefits. 
• 11:00am ET | August Kansas City Fed Manufacturing Activity: The Kansas City Fed surveys manufacturing executives in the region on business conditions and their outlook.
• Earnings
  • Mega-Caps: Marvell Technology (MRVL)
  • Large & Mid-Caps: Autodesk (ADSK), Workday (WDAY), Dollar General (DG), Dollar Tree (DLTR), Ulta Beauty (ULTA), Best Buy Co (BBY), Hormel Foods (HRL)

Friday

• 9:45am ET | August Chicago Business Barometer: The barometer provides information on U.S. economic activity and business conditions, consisting of seven activity indicators and three buying policy indicators. 
• 10:00am ET | August University of Michigan Consumer Sentiment: Consumer feelings about economic conditions affect their spending habits. This survey places a particular focus on inflation and its trajectory.  
• 11:00am ET | August Kansas City Fed Services Activity: The Kansas City Fed surveys executives in the region’s services industry on business conditions and their outlook.
• Fedspeak: Fed Chairman Kevin Warsh will give a speech at the Jackson Hole Economic Policy Symposium. 

Note: Companies with at least $200 billion in market capitalization are classified as “Mega-Caps,” while others are shown in the “Large & Mid-Caps” sections.

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