The benchmark S&P 500 (SP500) on Friday plunged to its worst weekly performance since early March last year, driven by concerns over economic ...
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| | Top News  mddphoto The benchmark S&P 500 (SP500) on Friday plunged to its worst weekly performance since early March last year, driven by concerns over economic growth after a slew of soft data during the week, especially on the labor market. That, coupled with historical September weakness, led to a gloomy atmosphere and heavy selling.
The hotly anticipated August jobs report was supposed to swing market expectations one way or the other on the size of the expected Federal Reserve interest rate cut later this month, but it ended up sparking a debate instead. The attention now turns to next Wednesday's consumer inflation report for further clues.
For the week, the S&P (SP500) slumped -4.3%, while the Nasdaq Composite (COMP:IND) cratered -5.8%. The blue-chip Dow (DJI) slipped -2.9%. Read a preview of next week's major events in Seeking Alpha's Catalyst Watch. | | Energy West Texas Intermediate ( CL1:COM) wiped out all of its gains of the year after dropping into the $60/bbl range for the first time since the start of January. Ample inventories and the end of the summer driving season also put pressure on gasoline. "Oil recently formed a lower high, suggesting a potential retest of the descending trendline," SA analyst Dean Popplewell wrote in a technical analysis. Apart from production and demand concerns, renewed growth worries were a major driver of the big moves and even pushed stock markets lower in the first trading session of September. ( 123 comments) | | Manufacturing There's more drama enveloping American heavy industry. The Biden administration reportedly concluded that the nearly $15B sale of U.S. Steel ( X) to Nippon Steel ( OTCPK:NPSCY) would pose a national security risk that can't be mitigated by either company. U.S. Steel insisted that there were no such issues, outlining that it would "pursue all possible options under the law to ensure this transaction closes," but the news still sent its stock plummeting nearly 18% on Wednesday. CEO David Burritt also announced the firm would close steel mills and move its HQ out of Pittsburgh if the deal collapsed. ( 232 comments) | | Bonds U.S. Treasury yields fell across the board this week. Growth concerns and a softer-than-expected July job openings print lifted bets of a 50-basis point interest rate cut by the Fed this month, as well as the mixed non-farm payrolls report. The yield curve between US10Y and US2Y briefly normalized for the second time in over two years, after un-inverting last month for the first time on 25 consecutive months. An inverted yield curve is widely seen as a recession indicator, but normalization of the curve is not necessarily a positive sign as the curve can un-invert before a recession hits. ( 3 comments) | | M&A Verizon Communications ( VZ) on Thursday announced a deal to acquire Frontier Communications ( FYBR) in an all-cash transaction valued at $20B. "This strategic acquisition of the largest pure-play fiber internet provider in the U.S. will significantly expand Verizon's fiber footprint across the nation," according to a press release. Seeking Alpha analyst Jeremy LaKosh noted that a good portion of the deal makes sense for both companies, but there is a regulatory cloud that will likely hang over it for months. | | Consumer In more M&A news, Seven & i ( OTCPK:SVNDY), the Japanese owner of 7-Eleven stores, rejected a $39B takeover offer by Canadian firm Alimentation Couche-Tard ( ATD:CA) after deeming it too low. Couche-Tard, which operates Circle K convenience stores, offered to acquire Seven & i for $14.86 per share in cash, in a transaction that would've made it the largest-ever Japanese target of a foreign buyout. Seven & i said the offer "grossly undervalues" its standalone path and does not "adequately acknowledge" the challenges the deal would face from U.S. competition regulators. | | Notable Ratings From SA Analysts | | Weekly Movement U.S. Indices
Dow -2.9% to 40,345. S&P 500 -4.3% to 5,408. Nasdaq -5.8% to 16,691. Russell 2000 -5.8% to 2,089. CBOE Volatility Index +49.2% to 22.38.
S&P 500 Sectors
Consumer Staples +0.6%. Utilities -0.5%. Financials -3.2%. Telecom -5.1%. Healthcare -2.1%. Industrials -4.4%. Information Technology -7.1%. Materials -4.8%. Energy -5.6%. Consumer Discretionary -2.9%. Real Estate +0.2%.
World Indices
London -2.3% to 8,181. France -3.7% to 7,352. Germany -3.2% to 18,302. Japan -5.8% to 36,423. China -2.7% to 2,766. Hong Kong -3% to 17,444. India -1.4% to 81,184.
Commodities and Bonds
Crude Oil WTI -8% to $67.67/bbl. Gold -0.1% to $2,524.6/oz. Natural Gas +7.6% to 2.289. Ten-Year Bond Yield -0.2 bps to 3.716.
Forex and Cryptos
EUR/USD +0.33%. USD/JPY -2.66%. GBP/USD -0.02%. Bitcoin -8.6%. Litecoin -2.1%. Ethereum -11.0%. XRP -8.1%.
Top S&P 500 Gainers
United Airlines Holdings (UAL) +8%. Mondelez International (MDLZ) +6%. AT&T (T) +6%. The J. M. Smucker (SJM) +6%. American Tower (AMT) +6%.
Top S&P 500 Losers
Dollar Tree (DLTR) -22%. Albemarle (ALB) -16%. APA Corporation (APA) -14%. Super Micro Computer (SMCI) -14%. Monolithic Power Systems (MPWR) -13%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. | | Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day. | | | | |
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