August 25, 2025

(AFTER A REST THE MARKET COULD RALLY INTO YEAR END)

August 25, 2025

Hello everyone

WEEK AHEAD CALENDAR

Monday, August 25

9:30 a.m. Australia RBA Minutes

10:00 a.m. New Home Sales (July)

10:30 a.m. Dallas Fed Index (August)

Tuesday, August 26

8:30 a.m. Durable Orders preliminary (July)

Previous: -9.3%

Forecast: -4.0%

9:00 a.m. FHFA Home Price Index (June)

9:00 a.m. S&P/Case Shiller comp. 20 HPI (June)

10:00 a.m. Consumer Confidence (August)

10:00 a.m. Richmond Fed Index (August)

Wednesday, August 27

2:00 a.m. Euro Area Consumer Confidence

Previous: -21.5

Forecast: -21.2

Earnings: Nvidia, NetApp, CrowdStrike, Agilent Technologies, J.M. Smucker

Thursday, August 28

8:30 a.m. Continuing Jobless Claims (08/16)

8:30 a.m. GDP second preliminary (Q2)

Previous: -0.5%

Forecast: 3.0%

8:30 a.m. Initial Claims (08/23)

10:00 a.m. Pending Home Sales (July)

11:00 a.m. Kansas City Fed Manufacturing Index (August)

Earnings: Ulta Beauty, Dell Technologies, Autodesk, Hormel Foods, Dollar General, Best Buy

Friday, August 29

8:30 a.m. Personal Consumption Expenditure (July)

Previous: 2.6%

Forecast: 2.6%

8:30 a.m. Wholesale Inventories preliminary (July)

9:45 a.m. Chicago PMI (August)

10:00 a.m. Michigan Sentiment final (August)

INVESTORS MIGHT NOT BE FEELING SO GLUM NOW AFTER POWELL’S SPEECH

Investors are holding their breath this week regarding Nvidia’s (NVDA) earnings and inflation data. Both could turn out to be supportive of a broad-based rally going forward. Last Friday, Powell delivered what investors were looking for – a suggestion that the central bank was ready to lower interest rates at its next meeting. The Dow hit a fresh record during the session, after rallying more than 900 points at its high. The Russell 200 also jumped more than 3%. Semiconductors, regional banks, and meg-caps all surged, and the S&P500 Equal Weight reached an all-time high.

Nvidia’s earnings are expected to beat expectations, in spite of its challenges with the Trump administration and Beijing. The company is expected to give 15% of its China chip sales to the U.S. government in exchange for export licenses.

Many analysts are still bullish on the stock; AI capital expenditure is unlikely to dwindle in the near term. That understanding may propel the tech trade forward after its brief rest.

Investors will not be surprised to see an uptick in inflation when the PCE is released on Friday. Economists polled by FactSet expect core PCE, which takes out food and energy prices, will rise 2.9% on a year-over-year basis. That compares to a 2.8% increase in June.

Markets are likely to take the data in their stride.

Morgan Stanley strategists believe that the inconsistency in Trump’s tariff policies may appear volatile on the surface; however, they think the economy is in the middle of an expansion and company fundamentals are solid, apart from health care.

They go on to argue that the recent price action is a “normal digestive phase in a secular bull market and is setting the stage for a great year-end rally.”

MARKET UPDATE

S&P500

The index rallied from recent lows back toward 6480/90 (recent high) and even above. There is a risk that new highs could be limited, and we could continue to see sideways movement or a little more downside for another few weeks. There is bearish divergence on the weekly S&P500 chart, which may play out soon. On the other hand, we know the market could continue to confuse investors with its relentless rallies to the upside.

Resistance: 6525/50 area

Support: 6335/45 area

GOLD

Gold is still stuck in limited ranges, and this pattern has been going on since April. There is scope for more of the same ahead before an eventual resolution to this pattern.

Resistance: $3393/98 and $3450/55

Support: $3319/24 and $3293/98

BITCOIN

Bitcoin has quickly stalled from the August 14 slight new high at 124.5k. This may be a bigger picture bearish sign, where we could see sideways movement to lower lows for another few weeks or a couple of months. Though we may see a bounce for a week or two, those gains may be seen as part of a topping.

Resistance: 116.2/116.7k and 118.0/118.5k and 124.5/125.5k area

Support: 111.5/112.0k area

HISTORY CORNER

On August 25