Stocks Battered By Impeachment, Trade Headlines

The relationship between the U.S. and China continues to be a roller-coaster ride

by Josh Selway

Published on Sep 27, 2019 at 2:38 PM

While it's likely an overused phrase, it truly was a wild week on Wall Street, thanks mostly to the inquiry into impeaching President Donald Trump. That wasn't the only market-moving headline out of Washington, D.C., however. Throughout the week traders were met with updates on the U.S.-China trade relationship, and even though the two sides agreed to meet on Oct. 11, news late in the week that the Trump administration could put restrictions on investments in China has the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) all set for weekly losses.

Chip Sector Underperforms

One major area of weakness, especially for the S&P and Nasdaq, came from the tech sector. Semiconductors were hit hard on Thursday by the latest Huawei report, and Micron Technology's (MU) ugly forecast only added to the sector's troubles on Friday. The retail sector was also in focus due to Nike's (NKE) well-received earnings release, and Target (TGT) received a major bull note.

It was another big week for the restaurant sector, too. Headlining the action was McDonald's (MCD) Beyond Meat partnership. Another familiar name from the space that popped up was Chipotle (CMG) thanks to more bullish analyst attention. On the beverage side of things, analysts are suddenly thirsty for Trulys.

Oil Prices Move Lower

It was another weak performance from oil prices. At the time of this writing, oil was on its way to a fourth straight loss. Liquid gold was hurt in part by reports that the Trump administration offered to remove sanctions on Iran -- something Trump denied on Twitter. Crude futures were last seen down 1.5% at $55.56 per barrel, though that still may not be low enough for Carnival Cruise (CCL).

Peloton IPO Flops

On Thursday traders absorbed the Peloton Interactive (PTON) initial public offering (IPO), which is turning out to be just the latest of IPO flops in 2019. The IPO was priced at $29, and PTON shares opened at $27. By the close of the opening day, the stock was down to $25.76, and today it's trading at $24.65, marking a very bumpy early ride on Wall Street for the at-home exercise specialist.

Another notable loser was Netflix (NFLX), which is now down almost 11% in September. This weakness has extended to a number of other media stocks, though Walt Disney (DIS) has been one of the few names to attract buyers.

More Volatility Ahead For Stocks?

As we head into a week that features the September jobs report, market volatility should remain at the front of traders' minds, especially with Schaeffer's Senior Market Strategist Matthew Timpane pointing to a number of factors that could lead to a VIX spike. The start of the fourth quarter is also ahead next week, and the numbers say a volatile three-month period could be coming our way.

 


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