Nvidia Earnings, PCE Deflator Highlight Week Ahead

Good morning contrarians! Welcome to the Daily Contrarian, our morning look at events likely to move markets. It is Monday, Aug. 26. The Bottom Line segment of today’s podcast starts at (3:55) for listeners who want to skip ahead.

State of Play

Israel attacked Hezbollah positions in Lebanon early yesterday. That was the major news from the weekend. As we look at our board of indicators for signs of direction at 0645, this does not appear to have impacted markets any, with one notable exception:

• Stock index futures are flat with the exception of small caps. The Russell 2000 is up 0.6% to lead major US indexes;

• Commodities are showing some signs of life, with WTI crude oil up 2% to trade around $76.50 — so maybe the events in the Middle East are taking a bit of a toll there. Copper is up 0.6%;

• Cryptos are unchanged with Bitcoin trading around $64,000;

• Bonds aren’t doing anything after gaining last week. The 2-year yields 3.90% whilst the 10-year yield is 3.79%. So the yield curve is closer to uninverting again.

Today’s Known Events

It’s a slow day ahead of a pretty slow week. Nvidia (NVDA 0.00%↑) earnings on Wednesday are probably the highlight, with Personal Consumption Expenditures, the Fed’s preferred inflation gauge, out on Friday morning.

One company of interest reports earnings before the open: Chinese ecommerce platform Pinduoduo (PDD 0.00%↑) reported mixed results, but the stock is moving a bit higher in the pre-market, up 1% and change.

Ito economic data releases, all we have to discuss are Durable Goods Orders. This gauge can be pretty volatile. Economists are expecting an increase of 4% month-over-month, compared to a decline for 6.7% at last month’s reading.