The S&P 500 closed out its best week of the year—and there’s good reason for the enthusiasm.

If you think of the Fed steering the economy like a pilot managing a flight, investors are the cringe passengers applauding when the plane lands safely.

“Markets are basking in their own sun-kissed bullish August holiday mood now just 9 days after being in a deep freeze of pessimism,” Deutsche Bank analyst Jim Ried wrote in a note today. “It's been one of the more remarkable turnarounds in recent memory.”

This week, macroeconomic data showed that the Fed has, at least for now, managed to avoid a significant economic slowdown while curbing inflation.

• The consumer price index rose 2.9% in July year over year, lower than the 3% expected—showing prices are continuing to decelerate.
• US jobless claims dropped for a second week in a row to their lowest since July. Initial claims fell by 7,000 last week to 227,000, far lower than expectations.
• Consumer sentiment bounced back in August, and retail sales in July rose 1% from the month prior.

Are we really in the clear?

While most economists—and Bank of America CEO Brian Moynihan—do not envision an imminent recession, there’s still uncertainty and likely to be some volatility ahead.

With every new economic report, the market narrative can change on a dime. Just two weeks ago, some economists were urging the Fed to call an emergency meeting to cut rates. Now, most investors expect a rate cut in September of only 25 basis points, as opposed to the 50-point cut some floated earlier.

How should investors play this moment? Now is a great time to move your money out of short-term yield vehicles and money market funds and into longer-term bonds, according to Head of Investment Strategy at JP Morgan Wealth Management Elyse Ausenbaugh, so you can catch the gains when rates are cut (bond prices move inversely to interest rates).

As always, stay invested through the noise. “The rebound in markets underlines our view that investors should avoid overreacting to bouts of volatility, especially in periods of thin summer trading,” explained Chief Investment Officer Americas at UBS Solita Marcelli.—LB

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🟢 What’s up

• Bavarian Nordic, which makes an mpox vaccine, jumped 15.64%, continuing its surge after the World Health Organization on Wednesday declared a public emergency over the disease’s spread in Africa.
• Bayer popped 8.36% after the firm won a legal dispute against claims that its weedkiller Roundup causes cancer.
• Rocket Lab rose 12.52% after the aerospace company announced it shipped two spacecraft to Cape Carnival in preparation for a launch to Mars.
• H&R Block had its best day since 2022 (up 12.24%) after raising its dividend by 17% and announcing a $1.5 billion share buyback.
• Maravai LifeSciences leaped 21.46% on reports that the drugmaker received a takeover offer from Repligen Corp.

What’s down

• On the flip side of that last gainer, Repligen Corp. plummeted 9.26% on the takeover news.
• Astera Labs dropped 5.52% after several investment firms, including Evercore and JPMorgan, lowered their price target for the chipmaker.
• ReNew Energy Global dropped 5.91% after the company reported it missed earnings and revenue expectations yesterday.

Y’all are cutting back on your last-minute weekend getaways to Telluride, and it shows.

Private jet flights dropped 15% in the first half of 2024 compared to 2022, when PJ trips were at their peak, according to Argus International via CNBC. There were 610,000 private jet flights in H1 of this year, compared to 716,000 two years ago.

Despite the pullback, private jet use remains above 2019 levels. But the industry’s hope that people who flew private during Covid would forever swear off commercial…hasn’t panned out.

Wheels Up, an “on-demand” private jet service, has been feeling the pain. Shares are down more than 50% this year, and during Meme Stock Mania: The Sequel several months ago, it was even more volatile than GameStop.

Volatility in itself doesn’t necessarily qualify a stock for meme status, but Intel’s epic flop this year has caught the attention of /WallStreetBets forum on Reddit, whose reputation for chaotic market vigilantism precedes them.

Business Insider found that Reddit users are elevating (or demoting, depending on your perspective) Intel to meme stock status by betting big on the flailing chipmaker. Intel was the fifth most popular stock among individual investors last week, bringing in $162 million in retail flows, according to Vanda Research. In fact, more retail traders were betting on Intel than Apple and Microsoft.

Reddit posters are hoping that Intel, which is down about 60% this year, could have a GameStop-esque meme renaissance.

To meme or not to meme

Historically, executives at some memed companies meet their avid retail base with a bewildered, but warm embrace, while others bristle at the idea of attracting investors who read Reddit posts more closely than company balance sheets.

But Intel could use some of that fanatic spirit that defies stock fundamentals, given its growth prospects. The company reported dismal earnings at the beginning of the month and warned that the third quarter was likely to keep the bad times rolling. Intel announced it will lay off 15% of its global workforce and suspend the dividend it had paid since 1992. Shares dropped 26% in a single day on August 2 after its earnings announcement.

The stock meltdown was the culmination of years of lagging behind competitors and staying one step behind each step of the AI revolution, which for chipmakers not named Intel has been a gold mine.

Morningstar equity analyst Brian Colello said a fair share price for the stock was $21, down from his previous rating of $30, after the earnings disaster, noting, “It appears that many of its customers in various end markets might be leaving Intel behind.”

Maybe Redditors can pick Intel up where customers left it and turn a meme into a miracle. –LB

• Fortnite became available on iPhones for the first time in four years (but only in Europe) due to EU regulations that compelled Apple to allow third-party app stores on its devices. The game is also available on Android devices globally.
• UK fintech giant Revolut notched a valuation of $45 billion in a share sale by employees, up from a $33 billion valuation in 2021, per the Financial Times. Europe’s most valuable startup is gearing up for a mega-IPO sought after by New York and London.
• Former President Donald Trump owns more than $1 million in cryptocurrency and sold $300,000 worth of branded Bibles, per a personal financial disclosure.
• Wealthy art collectors are borrowing against their pieces as sales have slowed, Bloomberg reports.
• Stocks are way out of whack with reality, the WSJ argues.

A few key reports this week shed light on the state of consumer spending, the labor market, and the battle against inflation. Next week will bring us some more variety, with leading economic indicators on Monday, the minutes from the Federal Reserve’s July FOMC meeting on Wednesday, and initial jobless claims on Thursday.

And of course, the rich and powerful will be gathering in Jackson Hole for summer camp a symposium on the state of global economic affairs. Jerome Powell will address the group, and he’s widely expected to use his time in the spotlight to begin laying the groundwork for rate cuts in September.

The week is almost over, as is earnings season. We’ve got slim pickings for quarterly announcements next week, though there are still a few reports worth watching.

Tuesday: Lowe’s, Medtronic, and Toll Brothers.

Wednesday: TJX, Analog Devices, Target, Macy’s, Snowflake, and Zoom.

Thursday: Intuit, Ross Stores, Cava, BJ’s Wholesale Club, and Baidu.