Weekly Market Recap (Sep 8-12): Markets Running Hot Into FOMC – Perfect Setup for Disappointment?
Everything you need to know about last week's markets performance and what to expect next.
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Welcome back to My Weekly Stock, where in-depth market analysis meets proven momentum-based trading strategies. My mission? To help you win in the markets with unbiased, data-driven insights you can act on.
Friday means it's time to review the week in the markets. Each week, I dedicate hours to curating this market recap, preparing insightful analysis with clear visuals and a structured layout, making it easy for you to find exactly what you need, week after week. And because it's easy to get swayed by personal bias, I like to let the data do most of the talking.
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SUMMARY
Here are this week's highlights and what to look out for next:
1. The markets were positive this week, with the S&P 500 up 1.6%, the Nasdaq 2%, and the Dow Jones 1%. Technology (+3.1%) and Utilities (+2.4%) were the best-performing sectors.
2. The S&P 500's long-term trend is positive, and the short-term momentum is also positive. 6,700 is the next resistance, while 6,515 is support.
3. The Q2 earnings season is almost over and 498 companies from the S&P 500 index have released their quarterly results, with 80% beating estimates. Earnings are expected to be up 13% in Q2 and 11% in 2025.
4. Market sentiment is at the "Neutral" level (55/100) as measured by CNN’s Fear & Greed indicator, while VIX is at a low value of 15.
5. Earnings report from General Mills and Fedex, the next Fed meeting and the latest Retail Sales data are scheduled for next week.
My take:
It was a one-directional week as the S&P 500 stayed above last week's close and edged higher following mostly encouraging inflation data. Stepping back, you have to admire the length and strength of the rally from April's low. If you've been following me for a while, you know I am not the type to call for a top at every corner, especially since my approach is all about riding trends while they last. If anything, I believe we still have more upside over the long term.
That said, coming in this hot right before an FOMC meeting where the decision has already been telegraphed makes me uneasy. When all the good news is already priced in, that's a setup for disappointment. I will approach the week ahead with caution but will continue to let price action, not opinion, be my guide.
PERFORMANCE RECAP
1. S&P 500 Sector Performance
This week, 9 out of the 11 S&P 500 sectors posted gains. Technology led the market with a 3.1% increase, while Consumer Defensive was the laggard, dropping 0.7%.
Year-to-date, 11 sectors have achieved positive performance. Communication Serv. is the top-performing sector with a 21.2 % gain, while Health Care lags behind, with a 0.4 % loss.
2. S&P 500 Top & Worst Performers
Over the last five trading days, 49% of the stocks in the S&P 500 index rose in value.
Top Performers:
$WBD (Warner Bros. Discovery Inc): 55.8%
$ORCL (Oracle Corp): 25.5%
$PSKY (Paramount Skydance Corp): 25.3%
$MU (Micron Technology Inc): 19.7%
$CNC (Centene Corp): 14.8%
Worst Performers:
$ALB (Albemarle Corp): -6.8%
$EPAM (EPAM Systems Inc): -7.9%
$HUM (Humana Inc): -10.2%
$TTD (Trade Desk Inc): -13.3%
$SNPS (Synopsys, Inc): -28.9%
In addition, 50 stocks within the S&P 500 reached a new 52-week high, while 12 stocks set new lows. The majority of this week’s highs came from the Technology sector.
Notable Highs:
$GOOG (Alphabet Inc)
$AVGO (Broadcom Inc)
$JPM (JPMorgan Chase & Co)
$ORCL (Oracle Corp)
$ABBV (Abbvie Inc)
Notable Lows:
$UPS (United Parcel Service, Inc)
$CL (Colgate-Palmolive Co)
$CMG (Chipotle Mexican Grill)
$CHTR (Charter Communications Inc)
$KDP (Keurig Dr Pepper Inc)
MARKET MOMENTUM
1. Momentum Review
To evaluate the market's current health, I examine 4 key elements: performance, breadth, trends, and key levels. Healthy bull markets typically feature indices setting new highs, broad market participation, and ascending trend lines.
Performance (POSITIVE 🟢): evaluating recent market performance to gauge the momentum’s strength. Ideally, I want to see returns accelerating short-term and index trading less than 5% from its 1-year high
1-month performance: +1.9% 🟢
3-month performance: +8.9% 🟢
vs. 1-year high: -0.1%🟢
Breadth (MIXED 🟡): assessing market participation to understand the health of the trend. Extreme levels (above 80% or below 20%) may indicate overextended trends.
% of stocks above 200-day moving average: 63% (stable from last week) 🟢
% of stocks above 20-day moving average: 53% (down from 55% last week) 🟡
Trends: analyzing trend strength across multiple timeframes using exponential moving averages, scored on a scale of 1 to 5. A score of 3 or above suggests solid trends and supports holding a position.
Weekly chart: VERY STRONG ⭐️⭐️⭐️⭐️⭐️ (stable vs last week)
Daily chart: VERY STRONG ⭐️⭐️⭐️⭐️⭐️ (stable vs last week)
4-hour chart: VERY STRONG ⭐️⭐️⭐️⭐️⭐️ (stable vs last week)
Key levels: identifying critical price zones to confirm the current trend or signal a potential reversal.
Support:
6,350 (-3.6%)
6,445 (-2.1%)
6,515 (-1.1%)
Resistance:
6,700 (+1.8%)
7,000 (+6.3%)
2. Post of the Week
This week's momentum analysis focuses on seasonality, as we just started the month of September. Since 1964, the S&P500 has been up 46% of the time in February, averaging a 0.6% loss.
EARNINGS & ECONOMIC REPORTS RECAP
1. Economic Reports
This week was all about inflation updates, coming at a timely moment as the next Fed meeting looms later in September.
PPI (Wed): Producer prices unexpectedly fell 0.1% MoM, well below the 0.3% forecast and down sharply from the prior +0.7%, signaling easing pipeline pressures.
CPI (Thu): Headline CPI rose 0.4% MoM (vs. 0.3% forecast) and 2.9% YoY, in line with expectations but up from 2.7% last month. Core CPI held steady at 0.3% MoM, matching both the forecast and the prior reading, showing underlying inflation remains sticky.
Initial Jobless Claims (Thu): Jumped to 263K, above forecast (235K) and the previous 236K, further signaling cooling in the labor market.
2. Earnings Outlook
Q2 Earnings: S&P 500 earnings are expected to grow by 13%, rising to 15% when excluding the energy sector.
2025 Full-Year Outlook: Earnings are expected to increase by 11%, above the 10-year average growth of 9%.
Analyst Revisions: Over the past month, 63% of all earnings revisions by analysts have been upward adjustments to their outlook.
Valuation: The forward 4-quarter P/E ratio stands at 23.2, above the 5-year and 10-year historical averages.
3. Earnings Season Recap
Out of the 498 S&P 500 companies that have reported second-quarter earnings, 80% exceeded EPS expectations. It is above the four-quarter average of 77% and above the historical average of 67%.
Below are some notable companies that reported earnings last week. I’ve highlighted their EPS and revenue performance vs estimate, as well as their stock return this week.
One highlight of the week was Oracle ($ORCL), which surprisingly missed earnings estimates but still posted its best single-day win in decades following an upbeat guidance. The stock gained 25% for the week.
MARKET SENTIMENT
Measures of investor sentiment can be helpful as they provide insight into the views and opinions of professional or individual investors. While not definitive predictors of market direction, these measures can serve as a valuable complement to other indicators and analysis tools, helping to paint a more comprehensive picture of the market's current state.
1. AAII Sentiment Survey (Individual Investors)
The American Association of Individual Investors (AAII) conducts a weekly survey to gauge members' expectations for the stock market over the next six months. Results are published every Wednesday.
In the latest survey, 28% of respondents had a bullish outlook, down from 33% the previous week.
2. BofA Bull & Bear Indicator (Institutional Investors)
The Bank of America Bull-Bear Indicator measures investor sentiment based on fund managers' and institutional investors' views. Scores range from 0 (extremely bearish) to 10 (extremely bullish).
The most recent reading was 5.9, a neutral sentiment reading.
3. CNN Fear & Greed Index (Technical)
This daily measure analyzes seven indicators to assess how emotions drive market decisions. Scores range from Extreme Fear to Extreme Greed.
The index closed at 55 (Neutral), up from 53 last Friday.
THE WEEK AHEAD
1. Economic Calendar
All eyes will obviously be on the Fed meeting. Officials, including Chair Powell, have hinted that the central bank will begin its easing cycle at this meeting. Markets will focus not only on the expected rate cut, but also on the path of cuts and how aggressive the Fed may get in the months ahead.
Key events to watch:
Retail Sales (Tue): Forecast at +0.3% MoM, after a +0.5% increase last month. Core sales are also expected at +0.3%, in line with July’s gain.
FOMC Meeting (Wed): The Fed is expected to cut rates to 4.25% from 4.50%, with the statement, updated projections, and Powell’s press conference giving crucial guidance on the pace of future easing.
Initial Jobless Claims (Thu): Last week came in at 263K, a level consistent with modest labor market softening.
2. Earnings Calendar
The earnings season is close to an end, and 5 companies from the S&P 500, including General Mills and Fedex, are expected to release their quarterly results.
Below are notable stocks reporting earnings next week, along with several key indicators I like to monitor:
3-Month Performance: Assessing recent stock trends.
RSI (Relative Strength Index): A reading above 70 suggests overbought conditions, while below 30 indicates oversold.
P/E Ratio: A value below 25 often points to a "cheap" valuation or low growth expectations.
Implied Volatility: The options market's forecast for the expected 1-day stock move after earnings.
3. Stock Analysis of the Week
Every week, I share my analysis of 1 stock that has reported earnings in recent weeks, focusing on implications for long-term investors. This week, I prepared an analysis of Lululemon ($LULU).
👨💻 My View :
$LULU has been in a persistent downtrend for almost 2 years, with every rally attempt failing to spark a real recovery.
Recent earnings only added fuel to the downside, with the stock now trading at multi-year lows. A retest of the COVID-19 lows can’t be ruled out.
Sure, the long-term turnaround story may sound appealing, but we’ve heard that before. Until a clear momentum shift emerges, patience is key.
Check out the post for more details about $LULU performance, trend, and key levels.
Community Spotlight
Each week, I share the work of another publication here on Substack that I think could bring you valuable insights, fresh perspectives, or a helpful approach. This week, I’m glad to feature Contrarian and Correct.
His publication is built on the belief that the best ideas live outside the consensus. The author goes through OTC-listed companies A–Z—the long way—clicking into filings and reading what others overlook. AI helps process information faster, but the true gems can’t be surfaced by filters or shortcuts. The focus is on mispriced value with a near-term catalyst to unlock it, often in places others dismiss. While long-term compounders are admired, the preference is to stumble on them by accident while hunting for actionable, event-driven ideas. The track record—contrarian bets that proved correct—shows that hard, unglamorous work pays off.
Check out one of his recent posts, where you can learn more about his approach:
CONCLUSION
Thank you for reading my Weekly Market Recap, which I hope has prepared you for the week ahead.
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Thanks again, and I look forward to sharing my market recap with you next week.
Happy investing!
My Weekly Stock
DISCLAIMER
The information provided in this newsletter is for informational purposes only and should not be taken as financial advice. Any investments or decisions made based on the information provided in this newsletter are the reader's sole responsibility. We recommend that readers conduct their own research and consult a qualified financial professional before making investment decisions. The author does not assume any responsibility for any losses or damages arising from using the information provided in this newsletter.
Really comprehensive weekly dashboard. Full of value!
Important week ahead ! 📆😃