Fed Update, Evergrande Group Headlines Rollercoaster Week

The Dow overcame Monday's sell-off in its mid-week surge

Assistant Editor
Sep 24, 2021 at 1:07 PM
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It was a week marked by dramatic highs and lows for the major benchmarks, starting with Monday's steep sell-off. The Dow Jones Industrial Average (DJI) plummeted 614 points, while the Nasdaq Composite (IXIC) and S&P 500 Index (SPX) sank into the red as well, marking the worst daily percentage drop for all three indexes since May. Tuesday brought even more volatility, as the Federal Reserve kicked off its two-day meeting, with only the Nasdaq ending the day higher.

By the middle of the week, Wall Street's sentiment rose, after the Federal Reserve held off on tapering its $120 billion emergency bond-buying program for the time being, with the Dow nabbing its best day since July. Traders brushed off worse-than-expected weekly jobless claims data on Thursday, and the Dow surged 506 points. At last check, the Dow is on track to snap its three-week losing streak, while the S&P 500 is set to break a two-week losing streak. The Nasdaq, however, is set to end the week lower, due to weakness in tech and cryptocurrency-related stocks. 

Investors focused on China's Evergrande Group for much of the week as well. On Monday, news that the real estate developer was nearing collapse sent Hong Kong's Hang Seng plummeting, and U.S. markets reacted in turn. By mid-week the real estate developer resolved a payment on a local bond, which helped ease fears. It remains to be seen, however, whether or not it will pay an $83 million U.S. dollar-denominated bond which was due on Thursday. 

Analysts Chiming In 

There were plenty of analyst notes to sift through this week. A price-target cut from Cantor Fitzgerald weighed on Canopy Growth (CGC) stock, adding to the wed name's steady decline, while Big Lots (BIG) was sent lower after a downgrade from Piper Sandler. Deutsche Bank upgraded Colgate-Palmolive (CL) stock, citing the company's "growth mindset," which is the result of a three-year corporate culture revamp.

Elsewhere, Enphase Energy (ENPH) and SoFi Technologies (SOFI) both received upgrades, after which the latter saw a surge of call volume. Plus, analysts see growth ahead for both Disney (DIS) and Roku (ROKU). On Friday, Jefferies doled out bull notes for Dave & Buster's (PLAY) and Cheesecake Factory (CAKE), and both stocks moved higher in response. 

Vaccine Stocks Making Headlines

A few vaccine-related stocks made their way into the spotlight this week. Pfizer (PFE) was in focus following upbeat trial data showing its Covid-19 vaccine is safe and effective for children ages 5 to 11. In other positive news, Johnson & Johnson (JNJ) said a second shot of its coronavirus vaccine administered about two months after the first dose increases effectiveness against moderate to severe disease to 94%. Dynavax (DVAX) soared after Clover Biopharmaceuticals reported its Covid-19 vaccine candidate, which utilizes Dynavax's CpG 1018 adjuvant, was 67% overall effective against Covid-19 and 79% against the Delta variant. Plus, the stock pulled back to a historically bullish trendline on the charts. 

 

Volatile September Comes to an End

There will be plenty of economic data to close out the month, the bulk of which is slated for Friday, including inflation updates, as well as disposable income and consumer spending data. Plus, Bed Bath & Beyond (BBBY,) Cal-Maine Foods (CALM), CarMax (KMX), Cintas (CTAS), Jabil (JBL), Micron (MU), and Thor Industries (THO) will report earnings. 

As the rocky month of September comes to a close, Senior Market Strategist Matthew Timpane discusses whether or not investors should be spooked by fall seasonality as we enter October. Meanwhile, after this week's rough Monday, Senior Quantitative Analyst takes a look at the phrase 'turnaround Tuesday,' and whether or not it is a real phenomena. 

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