Good morning!

A strong hint of a September rate cut from Fed Chief Jerome Powell propelled markets Friday after a previously dismal week on Wall Street. Here's what's happening this week...

• More than 300 companies report earnings this week, including the most valued company in the world. This morning, a pair of Canadian banks report, Bank of Montreal and Bank of Nova Scotia, but the most important numbers of the week arrive Wednesday, when NVIDIA posts its Q2 earnings, as well as CrowdStrike, Trip.com, HP, and Williams Sonoma. Thursday earnings are due from Dell, Marvell Technology, Autodesk, Affirm Holdings, Dollar General, Ulta Beauty, and Dick's Sporting Goods, followed Friday by Chinese retail giant Alibaba. *

• More inflation data hits the markets this week, as the PCE (Personal Consumption Expenditures) Index for July is released Friday. Financial forecasters expect data to show last month's inflation rose 2.6% over the past 12 months, matching June's numbers. The estimate for core PCE is 2.9%, up from 2.8% in June and a cycle low of 2.6% in April. Some analysts expect PCE inflation to keep trending higher and surpass the 3.0% mark later this year. Remember, core PCE is what The Fed references to gauge U.S. inflation when determining monetary policy. **

• The recent tech rally is showing signs of fatigue as investors grow cautious about stretched valuations and the uncertain future of artificial intelligence. While lower interest rates have buoyed sectors like real estate, banking, and manufacturing, the so-called "Magnificent Seven" tech giants—Amazon, Alphabet, Apple, Meta, Microsoft, Nvidia, and Tesla—are facing headwinds. Nvidia’s upcoming earnings report is seen as a critical test for the sector, with many investors trimming exposure to mega cap tech in favor of defensive plays. AI enthusiasm has cooled following disappointing product launches (I'm looking at you, Apple) and analysts note that Nasdaq’s sharp rise has left valuations vulnerable, especially amid persistent inflation and labor market concerns. As individual investors turn cautious and trading volumes dip during the summer lull, market volatility has increased. The shift reflects broader skepticism about the profitability of AI investments and a growing preference for more stable sectors. ***

The financial advisors at Miramontes Capital diligently keep up with anything that can impact our clients' finances and tap into more than 175 years of combined investment experience. We do our all to keep your money protected and growing. If you think you might benefit from our financial experience and oversight, contact us today for a FREE, no-obligation consultation. Just call (800) 460-1595. Until next week...

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