MarketBeat Week in Review – 7/24 - 7/28

Key Points

• Markets moved higher to end the week as investors prioritized moderating inflation over rising interest rates.  
• The Federal Reserve raised interest rates to their highest level in 22 years, but also indicated that the rate cycle may be near the end.  
• The latest PCE reading shows that inflation pressures continue to moderate. 
• Next week investors will hear from Amazon and Apple; the jobs report on Friday may also be a market mover. 
• Here are some of the most popular articles from this week.  

Markets rallied to end the week after the latest reading on the Personal Consumption Expenditure (PCE) Index showed that prices were rising at the slowest pace in nearly two years. However, the Federal Reserve made it clear that this is no time to declare a victory over inflation.  

The Fed raised its benchmark rate by 25 basis points. The move was largely expected, however, and that is allowing investors to look for opportunities as earnings are coming in, so far, better than expected.  

Next week will bring key earnings reports from Apple and Amazon. Investors will also get the latest employment information when the jobs report is released on August 4. 

It’s setting up to be another noisy week at a time of year when markets are usually much quieter. But as you get some R&R, the MarketBeat team will continue to help you stay on top of the news that’s moving the market. Here are some of our most popular stories from this week.  

Articles by Jea Yu 

This week, Jea Yu was asking an important question: are we starting to experience AI fatigue? In June, ChatGPT usage declined for the first time. Before you dismiss that as due to students being out of school, Yu also writes that generative AI appears to be getting less intelligent over time.  

However, artificial intelligence isn’t going away, and one example of that is in the biotechnology sector. Yu writes about the small-cap AI-driven pharmatech company, Exscientia NASDAQ: EXAI. As more attention is shining on the potential for AI to speed drug discoveries, investors are noting that Exscientia is the first company to bring AI-designed drugs to the human clinical trial stage. And partnerships with major biopharmaceutical companies are a good indicator that the company may be successful in bringing a drug to market.  

Yu was also looking at the improving outlook for Polestar Automotive Holding UK PLC NASDAQ: PSNY. The Swedish EV startup is benefiting from record quarterly deliveries in the second quarter, which is moving the company closer to profitability.  

Articles by Thomas Hughes 

Thomas Hughes was also alerting investors to the idea that the markets may be reaching peak AI. Hughes writes that the results from Microsoft Corporation (NASDAQ; MSFT) show that the market may have priced in this quarter’s earnings and is waiting to hear the forward guidance before taking AI stocks higher.  

Hughes sees a similar situation emerging with Chipotle Mexican Grill, Inc. NYSE: CMG. The company had a solid earnings report. But at a time when solid is expected, a slight miss on revenue was all it took to send shares tumbling. However, as Hughes explains, the CMG stock chart shows this could present investors with an opportunistic entry point. 

Turning his attention to an undervalued stock, Hughes was looking at the cybersecurity firm, Check Point Software Technologies NASDAQ: CHKP. The company is lagging behind the big names in this sector, but as Hughes writes, the company’s revenue and margins are increasing, which is making CHPT stock a deep value for investors.  

Articles by Sam Quirke 

Tesla, Inc. NASDAQ: TSLA is a favorite stock for many MarketBeat subscribers. It’s one of our team’s favorites too. And this week, Sam Quirke explains why investors should view the recent downgrade of TSLA stock as a buying opportunity.  

And if you enjoy learning about, and investing in, real pick and shovel companies, Quirke points you to Cadence Design Systems Inc. NASDAQ: CDNS. The company makes software and hardware that are essential to the manufacturing of semiconductor chips. Chips are the backbone of many technologies, such as AI, so Cadence has a long runway for growth.  

However, in what is becoming a familiar theme for tech stocks, the company delivered a good, but not great, earnings report and shares are down. With that in mind, Quirke explains why a pullback in CDNS stock may be a buying opportunity.  

Articles by Chris Markoch 

The Federal Reserve’s interest rate hike was expected. But as Chris Markoch explains, the existence of higher-for-longer interest rates will undoubtedly have lingering effects on the housing market. With that in mind, Markoch gave readers three housing stocks to move out of until market conditions improve.  

While the housing sector may be one to avoid, Markoch was more bullish on the autonomous vehicle sector. This is a sector that will benefit from the exploding demand for AI. Elon Musk is making a $1 billion investment in Tesla’s Project Dojo, and Markoch gave investors three autonomous vehicle stocks that are also making strides in this technology.  

And while the health of the banking sector is still a primary concern for investors, Markoch was looking at the financial technology (fintech) sector which continues to disrupt the industry. Specifically, Markoch shared his thoughts on two fintech stocks for investors to consider buying and one they should avoid.  

Articles by Kate Stalter  

One of the biggest stories of the week came from United Parcel Service Inc. NYSE: UPS which averted a strike when company management and the Teamsters union agreed to terms on a new contract. However, as Kate Stalter notes, the stock hasn’t moved much since the announcement, which means that investors are more concerned about the company's fundamentals, which continue to show declining shipments and revenue, which will eat into profits.  

Stalter was also looking at the growing market for weight loss treatments. Specifically, she was writing about the recent news that is driving shares of Eli Lilly & Co. NYSE: LLY higher. The company is buying Vesantis, a clinical-stage biopharmaceutical company that focuses on new weight-loss treatments. This is happening as the company is seeking FDA approval for its own drug, Mounjaro, as a weight-loss drug.  

And as some of the big oil companies begin to report this week, Stalter explains why investors may want to be cautious about investing in the energy sector, specifically oil stocks as analysts expect demand to decline between now and 2025 due to the effect of higher interest rates.  

Articles by Ryan Hasson 

While Jea Yu and Thomas Hughes wrote about potential AI fatigue, Ryan Hasson wrote about a different story in the sector. Specifically, Hasson explained why C3.ai, Inc. NYSE: AI) may present investors with a short-squeeze opportunity.  

Speaking of short-squeeze candidates, Hasson was also looking at the recent surge in the stock of Rivian Automotive, Inc. NASDAQ: RIVN. While the EV manufacturer did beat on production and delivery numbers, it was high short interest which led to some short covering that has pushed the stock up over 100% in the last three months. Hasson gives you the bullish and bearish case so you can decide.  

And as the market rally has started to broaden out, small-cap stocks are starting to catch a bid. With that in mind, Hasson explains the recent news around two small-cap stocks so you can decide if they belong in your portfolio.  

Articles by Gabriel Osorio-Mazilli 

This week, investors got the latest data on the housing market. The takeaway is that supply of existing homes remains tight. And as Gabriel Osorio-Mazilli explains, that is likely to be an opportunity for home builders in general, and Osorio-Mazilli focused on PulteGroup, Inc. NYSE: PHM, which may be on the verge of a breakout after its recent earnings report.  

Osorio-Mazilli was also writing about Southwest Airlines NYSE: LUV which is down sharply after posting lower-than-expected earnings in its most recent quarter. However, the long-term outlook for the industry suggests that this may be an overreaction, and patient investors may have a buy-the-dip opportunity.  

The Boeing Company NYSE: BA is moving in the opposite direction after earnings. Osorio-Mazilli explains why investors are bullish and why technical indicators point to the possibility of a monster rally in BA stock.  

Articles by MarketBeat Staff 

We can’t be sure, but it sounds like some of the MarketBeat staff might have taken part in the “Barbenheimer” phenomenon. The staff wrote about how the strong opening weekend for the two blockbuster movies may lay the groundwork for a short squeeze in AMC Entertainment Holdings, Inc. NYSE: AMC.   

The MarketBeat staff also looked at the recent earnings report for Mattel Inc. NASDAQ: MAT. The company stands to benefit from increased sales of its Barbie-related merchandise. However, that’s not showing up in the company’s stock price after a solid earnings report. That suggests that investors don’t like what they see in the company’s fundamentals. 

And as China’s economy continues to gain strength, the staff was looking at Alibaba Group Holding Limited NYSE: BABA and giving investors five reasons that it may be time for skeptical investors to buy BABA stock while it’s still below $100 a share.