• Mixed results for the major indexes last week. While every index closed in the green on Friday, it was a mixed trading week. The Dow finished with a roughly 1% gain overall and eclipsed a record high that was set in mid-July while the S&P 500 finished fractionally higher and was up less than a percentage point below its mid-July record. The S&P 500 had its ninth positive month out of the past ten. The NASDAQ fell roughly 1%.
• Key inflation metric data came in. The core Personal Consumption Expenditures index showed July’s prices (excluding volatile food and energy) rose 0.2% from the prior month, in line with expectations. Excluding energy and food prices, the Personal Consumption Expenditures Index rose at an annual rate of 2.6% in July, slightly below economists’ consensus forecast of 2.7%. 
• Rate cuts may be on the way. The U.S. Federal Reserve’s preferred inflation gauge on Friday showed a slow-but-steady easing of price pressures ahead of a September 17–18 Fed meeting. The meeting is expected to produce the first rate cut in more than four years. 
• An upward GDP adjustment. The U.S. economy expanded at a faster rate in this year’s second quarter than originally expected. The government reported that GDP grew at a 3.0% annual rate, up from an initial estimate of 2.8% made in late July. The revision was driven by an increase in personal spending. 
• Inflation data in the EU. Inflation across the 20 countries that use the euro currency fell to the lowest level in about three years, with the eurozone’s inflation rate recording an annual rate of 2.2% in August compared with 2.6% in July. The European Central Bank's next policy meeting is scheduled for September 12th. 
• Consumer sentiment is rising. An indicator that tracks U.S. consumer sentiment saw an increase for the first time in five months. Friday’s 67.9 reading from the University of Michigan’s Consumer Sentiment Index was up slightly from a preliminary August estimate of 67.8. Consumers’ expectations of inflation over the next year remained at their lowest level since December 2020.
• Gold continued to explode. The yellow metal soared past record levels for the fifth week in a row. The commodity briefly topped $2,560 per ounce on Friday morning. Friday afternoon’s price of around $2,535 was up about 23% year to date. 
• Nvidia's earnings were stellar, but investors weren't impressed. Shares of Nvidia dropped 3% last Wednesday after the company posted better-than-expected second quarter earnings and guidance for the third quarter. The semiconductor company also announced that it has boosted its stock buyback authorization by $50 billion. That’s double the size of the $25 billion share-repurchase program announced a year ago, which still had $7.5 billion remaining on it as of the end of the latest quarter. 
• Intel shares popped. The chipmaker jumped 8.5% on news that Intel is working with bankers to explore options to address weaknesses in its core business.
• Lululemon shares went higher. The athleisure stock advanced 4.5% after following an earnings beat.
• Abercrombie and Fitch got an upgrade. The cloting retailer added 2% after Citi upgraded shares to "buy."
• Warren Buffett turned 94 this week. His conglomerate Berkshire Hathaway hit a key milestone, hitting a $1 trillion market capitalization.

• Nvidia Corp. (NVDA)
• Nu Holdings Ltd. (NU)
• Tesla, Inc. (TSLA)
• Bank of America Corp. (BAC)
• AT&T Inc. (T)

Biggest Gainers

• Intel Corp. (INTC) +9.49%
• GameStop Corp. (GME) +8.88%
• Affirm Holdings, Inc. (AFRM) +5.64%
• Dell Technologies (DELL) +4.33%
• SharkNinja Inc. (SN) +4.25%

Biggest Losers

• Astera Labs (ALAB) -10.70%
• Sasol Limited (SSL) -5.70%
• Ionis Pharmaceuticals (IONS) -4.45%
• Talos Energy Inc. (TALO) -3.94%
• Five Below Inc. (FIVE) -3.59%

Weekly Notables 

Ford to Recall 90,736 Vehicles with Engine Valve Issue

Automaker Ford will recall 90,736 vehicles with engine intake valves that might break while driving, the National Highway Traffic Safety Administration (NHTSA) said on Saturday. According to the NHTSA, the recall will impact certain 2021-2022 Bronco F-150 Edge Explorer Lincoln Nautilus and Lincoln Aviator vehicles equipped with either a 2.7L or 3.0L Nano EcoBoost engine.

Amazon Made a Big Move in the AI Realm

E-commerce giant Amazon has hired Covariant's founders Pieter Abbeel, Peter Chen, and Rocky Duan — along with “about a quarter” of the startup's employees. The company also signed a non-exclusive license to use Covariant’s robotic foundation models. “With some of the smartest minds, we will advance fundamental research, marrying our rich expertise to unlock new ways for AI and robots to assist our operations employees,” said Joseph Quinlivan, Vice President of Amazon Fulfillment Technologies & Robotics, in a statement. “[Embedding] Covariant’s AI technology into our existing robot fleet will make them more performant and create real world value for our customers.”

Warren Buffet Sold More Bank of America

 Warren Buffett added around $6 billion to Berkshire Hathaway’s cash pile this summer as it sold off Bank of America stock since mid-July. According to a new filing Friday, sales of 21.1 million shares on Wednesday, Thursday, and Friday generated $848.2 million, which is an average price of $40.24. The firm has sold Bank of America shares for six straight sessions. Since it began to reduce its holding on July 17, it has sold shares during 21 of the past 33 sessions.

The Week Ahead

• A shorter trading week. U.S. markets will be closed on Monday, September 2nd, in celebration of Labor Day.
• Potential market moving catalysts this week include: Institute for Supply Management’s manufacturing index and construction spending data will be released on Tuesday. On Wednesday the U.S. Bureau of Labor Statistics will release Job Openings and Labor Turnover Survey while the U.S. Census Bureau will release factory orders and trade balance data.  A monthly employment report is scheduled to be released on Friday. The report will show how August’s jobs growth compared with July’s gain of 114,000 jobs. 
• Earnings on deck this week include: Dicks' Sporting Goods, Hewlett Packard Enterprise, Broadcom, DocuSign, Nio, and Shoe Carnival.

 Earnings Spotlight: Dick's Sporting Goods

Among those reporting this week will be Dick's Sporting Goods (DKS), with its second-quarter results expected before the open on Wednesday. Analysts, on average, expect DKS to disclose earnings of $3.82 per share, up 35.4% year-over-year (YoY), on revenue of $3.4 billion (+6.3% YoY).

Wedbush analyst Seth Basham expects a beat-and-raise quarter for Dick's Sporting Goods. "Despite a challenging backdrop for consumer discretionary spending and the sporting goods category, we believe that DKS was able to maintain around 5% comparable-sales growth in Q2," the analyst said.