Holiday-Shortened Week Provides Pullback as Sentiment Sours

All three indexes are set for a weekly loss

Deputy Editor
Sep 10, 2021 at 12:39 PM
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    The holiday-shortened week has the major indexes taking a step back, as sentiment surrounding the economy goes south, and investors start speculating on whether September's infamously volatile seasonality is here to stay. The Dow Jones Industrial Average (DJI) saw a dramatic triple-digit slide on on Tuesday when markets reopened, while it was joined by the S&P 500 Index (SPX) in extending its daily losing streak to two. The Nasdaq Composite (IXIC), meanwhile, brushed off some of the negativity sparked by souring analyst sentiment, hitting yet another record closing high.

    Wednesday was more of the same in regards to growing pessimism among traders, and the Dow and S&P 500 both logged their third-straight day of losses, while the Nasdaq also took a step back. On top of a record rise in job openings for July, the Federal Reserve's "Beige Book" indicated a moderate downshift in overall economic growth. 

    While stocks explored both sides of the breakeven on Thursday, the Dow and S&P 500 both strung together their fourth-straight losses, as uncertainty over the Covid-19 delta variant led several airlines to lower their forecasts. As of this writing, all three indexes are eyeing a weekly drop, while the Dow and S&P 500 are gearing up for their fifth-consecutive daily skid. 

    Stocks Getting Analyst Love This Week 

    It wasn't all doom and gloom from the brokerage bunch this week. In fact, several stocks enjoyed upgrades from analysts amid all the volatility. Barclays upgraded Cirrus Logic (CRUS) to "overweight," citing opportunities with Apple (AAPL) and Alphabet (GOOGL). Meanwhile, another tech name Spotify (SPOT) saw an uptick in bullish options trading after KeyBanc upgraded the equity to "overweight." Macy's (M) also saw a rare bull note. Cowen upgraded the stock to "outperform," commending the department store staple on its shift to digital

    Earnings Continue to Trickle In 

    While earnings season has slowed to a mere trickle, several major names are still making waves in the confessional. Famed meme stock GameStop's (GME) quarterly report was front-and-center this week, and with dismal results. Zumiez (ZUMZ) also plummeted after earnings, though it created quite a stir among options traders. Buy now pay later (BNPL) name Affirm (AFRM) had better luck, surging after a revenue beat and inviting plenty of bull notes. Meanwhile, options volume surged on Dave & Buster's Entertainment (PLAY) stock ahead of its quarterly report on Thursday evening. 

    Federal Budget Balance on Deck Next Week

    The Federal Budget balance will kick off next week, while investors have plenty to look forward to, including an update on the consumer price index, more jobs data, and a consumer sentiment reading next Friday. There will also be earnings reports from JinkoSolar (JKS), Lennar (LEN), and Oracle (ORCL). Investors will be keeping an eye on volatile seasonality, and those reading may want to check out what Senior Vice President of Research Todd Salamone has to say on the matter. Meanwhile, Schaeffer's Senior Quantitative Analyst gives a little insight into what one closely watched sentiment  indicator might mean for stocks in the long run. 

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