Investing Club: The week in review, the week ahead

The S & P 500 finished lower Friday, at its lowest close since July, after mounting an attempt at back-to-back gains earlier in the session. The first two days of September, which has historically been the worst month of the year for stocks , were mixed following a rough August, which has typically been a solid month for the market. Following the government’s Goldilocks-type August employment report Friday, market predictions for a 75-basis-point interest rate increase at the Federal Reserve’s next scheduled meeting later this month went down somewhat, according to the CME’s FedWatch tool . While odds of a 50-basis-point rate hike were still only 44%, that glimmer of hope of avoiding a third straight 75-basis-point move helped support stocks Friday morning as recently stronger bond yields eased. But stocks gave up those gains and finished lower Friday. The S & P 500 was sharply lower for the week, down 3.6%. Thursday’s advance broke a four-session losing streak that started on Aug. 26, with a terrible single-day plunge of nearly 3.4% after Federal Reserve Chairman Jerome Powell warned in his Jackson Hole address of “some pain” as central bankers continue their fight to bring down persistently high inflation. That put the pedal to the metal on Wall Street’s 75-basis-point September hike scenario. Fast forward a week after Powell’s speech — and before the bell Friday morning, the Labor Department reported nonfarm payrolls grew 315,000 in August. That was just shy of expectations but still solid. The nation’s unemployment rate rose to 3.7%. Economists were looking for no change from the prior month’s 3.5%. Wage inflation moderated a bit, with average hourly earnings up 0.3% in August and 5.2% from a year ago, both slightly below estimates. There seems to be something in the jobs data for everyone — hence, the Goldilocks not-too-hot, not-too-cold interpretation. While payrolls were healthy, they were well off the 526,000 added in July and the lowest monthly gain since April 2021. The tick up in the unemployment rate and the tick down in wages — while not monumental moves — also pointed to a cooling of the red-hot labor market. That’s something Powell wanted to start seeing — since, as we’ve been highlighting, a number of signals including commodity prices have pointed to peak inflation. The consumer price index and the producer price index for August are out Sept. 13 and Sept. 14, about a week before the Fed’s Sept. 20-21 meeting. That’s the promising news for the bulls, even though they couldn’t win the day on Friday. The start of this past week was tough, especially for tech stocks. Nvidia’ s (NVDA) nearly 7.7% drop Thursday spread to the entire semiconductor complex. The final decline Thursday, while not as bad as early in the session, came after the company late Wednesday said the U.S. government was restricting certain chip sales in China. As we wrote Thursday , we believe there a ways for Nvidia to mitigate the impact of the restrictions; nonetheless this was bad news. Advanced Micro Devices (AMD), also a Club holding, said the restrictions won’t be material to its business. Chip stocks got a modest, initial bounce Friday — but they, too, turned lower. In this past week’s oversold market, according to the S & P Oscillator , we made lots of buys and a few strategic sales. We added to our newest positions Starbucks (SBUX) and TJX Companies (TJX). We also were encouraged by Thursday’s late announcement of a new CEO. We also made some buys in high-quality tech names that we like for the long-term: Amazon (AMZN), Microsoft (MSFT), Qualcomm (QCOM) and Nvidia. That Nvidia buy was small and it was before that unexpected development about China chip sale restrictions. We bought some Johnson & Johnson (JNJ) and Danaher (DHR), too. We like health-related companies in this market as a place of relative safety as people don’t usually forgo wellness spending, even in tough times. We also this past week took advantage when oil prices jumped and sold shares in some of our oil names: Pioneer Natural Resources (PXD) and Devon Energy (DVN). Here’s a rundown of the trades. Looking back West Texas Intermediate crude bounced on Friday to finish around $87 per barrel. But overall, it was a tough week for oil, down 6.7%. The U.S. dollar index ended the week above 109. Gold finished at about $1,720 per ounce. The 10-year Treasury yield ended at around 3.2% and the 2-year Treasury yield, which hit 14-year highs this week, eased to 3.4%. The 2-year yield still finished well above the 10-year, a so-called yield curve inversion that’s viewed as a harbinger of recession. The U.S. markets are closed Monday for Labor Day. No Club-stock earnings were out this past week. But what the week lacked in earnings, it more than made up for in economic data, specifically jobs numbers. As we mentioned earlier, the government on Friday reported slightly lower-than-expected but still-good nonfarm payrolls growth. The unemployment rate ticked higher and wage growth moderated. The jobs report Friday came two days after we got a re-tooled ADP private-sector employment picture for August, which showed a dramatic deceleration in hiring at U.S. companies. Squeezed in the middle, on Thursday, jobless claims for last week were the lowest in two months . The jobs parade started Tuesday with the Job Openings and Labor Turnover Survey . The so-called JOLTS showed nearly 1 million more job openings than expected in July. What’s ahead There are no Club-holding earnings in the week ahead either. In fact, only one Club stock is left to report quarterly results this earnings season . It’s Costco (COST) on Sept. 22 — one of six September events that could provide catalysts for stocks in our portfolio during this traditionally rough month for the market. However, there are some companies reporting their quarters — GameStop (GME) and Kroger (KR) are the biggies — and a handful of economic reports to consider. Monday, Sept. 5 U.S. markets closed for Labor Day Tuesday, Sept. 6 After the bell: GitLab (GTLB), Coupa Software (COUP) Wednesday, Sept. 7 Before the bell: John Wiley & Sons (WLY), Nio (NIO) After the bell: Asana (ASAN), AeroVironment (AVAV), Casey’s General Stores (CASY), Dave & Buster’s (PLAY), GameStop (GME), Verint Systems (VRNT) 8:30 a.m. ET: Trade Balance (August) 2 p.m. ET: Federal Reserve’s Beige Book of regional economic activity Thursday, Sept. 8 After the bell: American Outdoor Brands (AOUT), Smith & Wesson Brands (SWBI), DocuSign (DOCU), Zscaler (ZS), Zumiez (ZUMZ) 8:30 a.m. ET: Jobless claims (week ended Sept. 3) 3 p.m. ET: Consumer credit (July) Friday, Sept. 9 Before the bell: Kroger (KR) 8:30 a.m. ET: Wholesale inventories (July) (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Traders work on the floor of the New York Stock Exchange (NYSE) on September 01, 2022 in New York City.

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