Wall Street Clings to Gains to Closeout Volatile Week

FAANG stocks lost $1 trillion in market value early in the week

Deputy Editor
Sep 11, 2020 at 12:55 PM
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This week saw major indexes reverse course from the previous week’s rally, with the Dow Jones Industrial Average (DJI) in particular, plunging in dramatic fashion, thanks to steep losses in the tech sector. The S&P 500 Index (SPX) and tech-heavy Nasdaq Composite (IXIC) followed closely behind, the latter suffering as FAANG stocks sold off, losing $1 trillion in market value in a matter of days. Midweek, investors pored over dismal jobs data, as weekly jobless claims rose for a third straight week, hindering the labor market’s gradual improvement. And despite a brief respite in Wednesday and early Thursday's trading, all three indexes are eyeing weekly losses and a mixed close for Friday's session.

Vaccines and Stay-At-Home Staples Dominate Headlines

Stocks tied to the coronavirus pandemic have taken center-stage this week. Specifically, AstraZeneca (AZN) paused its vaccine trials after one of its participants presented an unexplained illness. Meanwhile, BioNTech (BNTX) rose after the company announced it was one of nine biopharmaceutical companies committed to upholding the integrity of the scientific process while working toward a COVID-19 vaccine.

Elsewhere, Peloton (PTON), a staple in the at-home workout landscape, saw a boost after the company announced it will reduce the price of its original bike, while also introducing new models to its portfolio. Lastly, Spotify (SPOT) surged after receiving praise from at least one analyst. The stock was upgraded to “outperform,” with new Spotify exclusive the "Joe Rogan Experience" podcast being cited as the main source of optimism.

Earnings Reports Trickle in as Season Slows

It's still relatively quiet on the earnings front, though some notable companies have tossed their hats in the earnings ring. Specifically, Gamestop (GME) plummeted after missing Wall Street's estimates on both earnings and revenue. Meanwhile, Zscaler (ZS) attracted the attention of analysts, landing no fewer than nine bull notes, after decimating forecasts for the company's fiscal-fourth quarter report. Lastly, cloud specialist Oracle (ORCL) notched a fresh all-time high after knocking its earnings report out of the park.

Economic Updates Set to Offset a Barren Earnings Docket 

As September reaches its apex, the earnings docket looks a bit barren; however, there's a plethora of economic data that will keep investors busy. Most notably, there's the latest Federal Open Market Committee (FOMC) interest rate decision, which will be rolled out on Wednesday. Then on the same day, Federal Chairman Jerome Powell will give remarks. Other notable data includes the Organization of the Petroleum Exporting Countries (OPEC) monthly oil market report, housing starts, and retail sales data. Lastly, a few notable names will step into the earnings confessional, including Adobe (ADBE), FedEx (FDX) and Lennar (LEN).

Until then, be sure to check out Schaeffer's Senior Quantitative Analyst Rocky White's deep dive into how stocks behave after the Cboe Volatility Index (VIX) and S&P 500 post positive returns. Another good way to run full circle on this weeks selloff is to take a closer look at the week prior, with Senior V.P. of Research, Todd Salamone.

 

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