Investing Club: The week in review, the week ahead

The major stock benchmarks all pulled back this past week, with the Nasdaq falling 2.6%, the S & P 500 off 1.2%, and the Dow Jones Industrial Average down fractionally. The S & P 500’s weekly decline broke a four-week winning streak. Contributing to the pullback was a retail sales number that came in hotter than expected when excluding the impact of auto sales, and fears of more aggressive Federal Reverse tightening returned after the minutes from its latest meeting were out this week. Also adding fuel to selloff was likely the blow up in Bed Bath & Beyond (BBBY), the latest meme stock to wreck havoc in the market. As we noted on Friday , meme blowups often happen when the short squeeze — an event in which a stock is unnaturally bid higher by short sellers closing out positions — inevitably runs out of steam. While the individual meme stocks are certainly not large enough to have any material fundamental effect on the indexes (if they’re even found in that index to begin with), the crashes serve to embolden short sellers to look for new targets in fundamentally weak companies. That can put pressure on the entire market, and especially the tech-heavy Nasdaq. While down weeks are never fun, it is important to zoom out a bit and note that all the averages are still up over the past month and this small pullback is allowing us to work off some overbought conditions — a healthy dynamic for the market in the long run. Only three stock sectors closed in the green, led by consumer staples and followed by utilities and energy. Communication services was the biggest loser, followed by materials and real estate. Meanwhile, the U.S. dollar index strengthened to around 108. Gold pulled back to about $1,760 per ounce. WTI crude prices hovered around $90 per barrel. The yield on the 10-year Treasury advanced back to around the 2.98% level. Looking back We received quarterly earnings results from Cisco Systems (CSCO), which were better than expected thanks to easing supply chain constraints. On the macroeconomic front: On Tuesday, housing starts in July were reported to have fallen 9.6% monthly to a seasonally adjusted annual rate (SAAR) of 1.446 million, below expectations of about 1.5 million. Building permits, however, came in a bit above expectations at a 1.674 million SAAR, representing a 1.3% monthly decline. Also Tuesday, industrial production was reported to have increased 0.6% monthly in July, while capacity utilization came in at 80.3% for the month. On Wednesday, retail sales were reported to be unchanged in July, a slight miss versus expectations for a 0.1% monthly increase. Excluding autos, sales came in hotter than expected, up 0.4% monthly versus expectations for no monthly change. On Thursday, initial jobless claims for the week ending Aug. 13 came in at 250,000, below expectations of 260,000. Also Thursday, we learned that existing home sales fell 5.9% monthly in July, with declines seen in all major U.S. regions. What’s ahead Within the portfolio, we will hear from Nvidia (NVDA) and Salesforce (CRM) on Wednesday after the closing bell, and from Marvell Technology (MRVL) on Thursday after the bell. Here are some other earnings reports and economic numbers to watch in the week ahead: Monday, Aug. 22 Before the bell: Viomi Tech (VIOT) After the bell: Palo Alto (PANW), Zoom Video (ZM), Nordson Corp (NDSN), Dada Nexus (DADA), Noah Holdings (NOAH), Flexsteel (FLXS), Afya Ltd (AFYA), DLocal Ltd (DLO), FinVolution (FINV) Tuesday, Aug. 23 Before the bell: JD.com (JD), Medtronic (MDT), Bank of Nova Scotia (BNS), Macy’s (M), KE Holdings (BEKE), Dick’s Sporting (DKS), JM Smucker (SJM), Xpeng (XPEV), Baozun (BZUN), GDS Holdings (GDS) After the bell: Nordstrom (JWN), Advance Auto Parts (AAP), Intuit (INTU), Toll Brothers (TOL), Urban Outfitters (URBN), La-Z-Boy (LZB) 9:45 a.m. ET: Flash PMI 10:00 a.m. ET: New Home Sales Wednesday, Aug. 24 Before the bell: Royal Bank of Canada (RY), Petco (WOOF), Brinker Intl (EAT), Dycom (DY) After the bell: Williams-Sonoma (WSM), Victoria’s Secret (VSCO), NetApp (NTAP), Autodesk (ADSK), Guess (GES), Splunk (SPLK), Snowflake (SNOW), Box (BOX), Zoura (ZUO) 8:30 a.m. ET: Durable Goods Orders 10:00 a.m. ET: Pending Home Sales Thursday, Aug. 25 Before the bell: TD Bank (TD), Dollar General (DG), Dollar Tree (DLTR), Canadian Imperial (CM), Burlington (BURL), Peloton (PTON), Abercrombie & Fitch (ANF), Hain Celestrial (HAIN), Movado Group (MOV) After the bell: Dell Tech (DELL), Gap (GPS), ULTA Beauty (ULTA), Workday (WDAY), Farfetch (FTCH), Affirm (AFRM) 8:30 a.m. ET: Initial Jobless Claims 8:30 a.m. ET: Gross Domestic Product Friday, Aug. 26 8:30 a.m. ET: Personal Spending and Income (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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People wearing face masks walk past the Bed Bath & Beyond store in New York City.

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