Volatility poked its way through the front door for a moment, but then quickly hit the road again. The growth scare over the first weekend of August feels like a memory today with stocks gaining back a solid chunk of previous losses. It's not an all-clear, though, as the August through October period is notorious for bouts of fear and downside price action.
Parsing the data and listening for clues
For now, investors are on edge with each passing data point. What have normally been generally innocuous economic indicators, such as the ISM Services survey and weekly Initial Jobless Claims, are suddenly make-or-break reports. That theme could pass by the wayside soon with major events on tap, such as Fed Chair Powell's speech at the Kansas City Federal Reserve's Jackson Hole Economic Symposium.1
Lower rates ahead...
Recall it was two years ago when Jay jolted markets in a bad way, suggesting that households may have to endure significant “pain” over the quarters ahead so that crippling inflation would subside.2 The CPI rate has since fallen below 3% on a year-on-year headline look, so mission accomplished there, I suppose. Then in August 2023, Powell put forth a more optimistic, but still cautious, tone. The Fed “navigates by the stars under cloudy skies,” was his monetary-policy mantra.3 Over the past 12 months, pundits and CEOs alike have been patient with the first rate cut.
...And CEO confidence isn't bad
The wait is almost over. The first-quarter point ease is on the doorstep, and it could even be a jumbo 50-basis-point cut depending on how macro data shakes out between now and Sept. 18. All the while, CEOs are feeling somewhat better about the state of business. The Conference Board's CEO Confidence Survey for the third quarter dipped sequentially, but remains above 50, suggesting a “moderately optimistic” stance.4
Solid corporate earnings
And they have at least some reason to feel upbeat. Second-quarter earnings verified above expectations, and guidance wasn't half-bad either. While retailers are still reporting (and Nvidia (NVDA, Financial) has yet to post quarterly numbers), about 79% of S&P 500 companies have topped EPS estimates. It appears the second-quarter's earnings growth rate may finalize north of 10%, too. What's more, FactSet's consensus data points to even better year-on-year quarterly profit growth figures come the fourth quarter.5
The consumer take
The consumer isn't quite as cheery. The Conference Board also reported that households feel slightly better about the future state of the economy, but their collective view of present conditions deteriorated in July.6 Despite rising real wages and growth in the jobs market, families remain on edge. Toss election uncertainty into the mix along with ongoing frustration regarding the cost of living, and the sour mood on Main Street is something companies might have to just get used to for a while.
Focus on the fall conference season
Indeed, there are many crosscurrents facing executives and investors today. The upcoming conference season may shed light on corporate hiring plans, capital allocation decisions and major themes such as artificial intelligence and potential upcoming policy changes on Capitol Hill. Fasten your seatbelt for what could be a wild ride ahead. Here are the major events to mark on your calendar:
Information technology & communication services
- Aug. 21: Needham 5th Annual Semiconductor and SemiCap 1X1 Conference (virtual)
- Aug. 26: Stifel Tech Executive Summit
- Aug. 27: Evercore ISI Semiconductor, IT Hardware & Networking Conference
- Aug. 27: Jefferies Semiconductor, IT Hardware & Communication Technology Summit
- Aug. 28: Deutsche Bank Technology Conference
- Sept. 3: Barclays Media and Telecom Forum
- Sept. 4: Citi Global Technology, Media, and Telecommunications TMT Conference
- Sept. 5: Bank of America Media, Communications & Entertainment Conference
- Sept. 9: Goldman Sachs Communacopia Technology Conference
- Sept. 10: Wolfe Research TMT Conference
Health Care
- Aug. 22: JP Morgan Healthcare Day
- Aug. 27: Stifel Back-to-School Healthcare Series
- Sept. 4: Wells Fargo Healthcare Conference
- Sept. 4: Morgan Stanley 22nd Annual Global Healthcare Conference
- Sept. 10: Baird Global Healthcare Conference
- Sept. 17: Cantor Fitzgerald Global Healthcare Conference
- Sept. 18: Bank of America Global Healthcare Conference
Consumer Discretionary & Consumer Staples
- Sept. 3: Barclays Global Consumer Staples Conference
- Sept. 4: Goldman Sachs 31st Annual Global Retail Conference
- Sept. 5: Bank of America Gaming and Lodging Conference
- Sept. 18: Wells Fargo 7th Annual Consumer Conference
Financials & Real Estate
- Sept. 4: 25th Annual Scotiabank Financials Summit Conference
- Sept. 4: Raymond James U.S. Bank Conference
- Sept. 5: Raymond James Banking on Tech Conference
- Sept. 9: Barclays 22nd Global Financial Services Conference
- Sept. 10: Bank of America Global Real Estate Conference
- Sept. 12: Wolfe Research Private Real Estate Conference
- Sept. 23: Deutsche Bank 32nd Annual Leveraged Finance Conference
- Sept. 24: Bank of America Securities 29th Annual Financials CEO Conference
- Sept. 26: Goldman Sachs European Real Estate Equity & Debt Conference
Industrials
- Sept. 3: UBS Business Services, Leisure, and Transport Conference
- Sept. 4: Jefferies Industrials Conference
- Sept. 4: Morgan Stanley Industrial CEOs Unplugged
- Sept. 5: Gabelli Funds 30th Annual Aerospace and Defense Symposium
- Sept. 24: RBC Capital Markets Global Industrials Conference
Energy & Utilities
- Sept. 2: Barclays 38th Annual CEO Energy-Power Conference
- Sept. 9: ROTH 11th Annual Solar & Storage Symposium
- Sept. 10: NYSE Energy & Utilities Investor Access Day (virtual)
- Sept. 10: Morgan Stanley European Utilities and Energy Summit
- Sept. 30: Wolfe Research Utilities, Midstream, and Clean Energy Conference
Materials
- Sept. 4: UBS Global Materials Conference
- Sept. 15: Gold Forum Americas
- Sept. 20: Raymond James Virtual Strategic Metals & Materials Conference (virtual)
Regional
- Aug. 20: Morgan Stanley Nasdaq Virtual Investor Conference in Asia (virtual)
- Aug. 21: Citi ASEAN Thematics Investor Conference
- Sept. 2: UBS China Conference
- Sept. 2: Bank of America Japan Conference
- Sept. 3: Goldman Sachs EMEA Credit & Leveraged Finance Conference
- Sept. 4: Deutsche Bank Access European TMT Conference
- Sept. 9: Morgan Stanley 27th Annual Latin America Conference
- Sept. 11: Goldman Sachs China Conference
- Sept. 25: Citi China Industrial, SMID, Transport Conference
Investor Specific & Multi-Sector
- Aug. 20: Investor Summit Group - MicroCap Forum
- Aug. 21: Nordea Small & Mid Cap Days
- Aug. 27: Bank of America Virtual Conference (virtual)
- Aug. 28: J.P. Morgan CEO Conference Call
- Sept. 3: Carnegie Small & Mid Cap Seminar
- Sept. 5: Piper Sandler 10th Annual Macro Conference
- Sept. 5: Stifel Cross Sector Conference
- Sept. 16: RMB Morgan Stanley 15th Annual Big Five Investor Conference
1 Jackson Hole Economic Symposium, Federal Reserve Bank of Kansas City, August 20, 2024, https://www.kansascityfed.org
2 Powell: Fed's inflation fight could bring ‘pain,' job losses, AP, Christopher Rugaber, August 26, 2022, https://apnews.com
3 Inflation: Progress and the Path Ahead, Federal Reserve, August 25, 2023, https://www.federalreserve.gov
4 CEO Confidence Declined Slightly in Q3 2024, The Conference Board, August 8, 2024, https://www.conference-board.org
5 Earnings Insight, FactSet, John Butters, August 16, 2024, https://advantage.factset.com
6 US Consumer Confidence, The Conference Board, July 30, 2024, https://www.conference-board.org
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