September 24, 2023

The Weekend Rip: September 24, 2023

The stock market had its worst week since March as investors adjusted to the idea that interest rates would likely be higher for longer than anticipated. 📊

Let’s recap and prep you for the week ahead. 📝

What Happened?

⏯️ The Federal Reserve paused its interest rate hikes but kept its hawkish tone. Its updated dot plot shows FOMC members expect one more rate hike in 2023 and no rate cuts until mid or late 2024, as the labor market and economy remain stronger than initially predicted. A ton of other central banks also adjusted their benchmark rates this week.

🤩 This week’s Stocktwits Top 25 report showed underperformance relative to the indexes.

📉 With the stock market selling off, traders are eyeing a new support level in the S&P 500. Meanwhile, risk appetite seems to be wavering as Instacart, Klaviyo, and Arm Holdings all pulled back to their initial IPO price. And the small-cap to large-cap ratio hit 20-year lows as investors continue to favor large and mega-cap stocks.

🏘️ A divergence is forming in homebuilder confidence and homebuilder stocks, which typically move in tandem but have disconnected recently.

🗑️ Investors continue to abandon growth stocks that aren’t growing as much as they did during a lower interest rate environment. Investors spit up Chewy shares as they fell for their tenth-straight week, while Match Group unveiled a new Tinder Select tier that costs $500/month to improve revenue and margins.

📰 Several others made headlines, including Netsol Technologies, Scholastic Corporation, FedEx, and KB Home.

🔥 Several names were on the Stocktwits trending tab for most of the week, including $CCG, $NVOS, $GNS, $TTOO, $EBET, $LIFW, and $TLT.

Here are the closing prices:

S&P 500	4,320	-2.93%
Nasdaq	13,212	-3.62%
Russell 2000	1,777	-3.82%
Dow Jones	33,964	-1.89%

Bullets

Bullets From The Weekend

❌ Worker strikes spread to new industries, hitting healthcare next. The historically tight labor market is causing unions to flex their bargaining power to secure better compensation and benefits for their constituents. This week, the Coalition of Kaiser Permanent Unions warned that more than 75,000 workers will strike at the largest nonprofit healthcare organization in the U.S. beginning in early October. Kaiser has called the unions’ claims misleading and urged employees to resist the union’s call to strike. CNBC has more.

✂️ The Fed is doing its part in softening the labor market. We’re being a bit facetious here, but the U.S. Federal Reserve system is cutting about 300 people from its payroll this year, pausing its steady headcount growth since 2010 as its reach and regulatory agenda have expanded. The impacted workers will primarily be in the information technology space as new technologies improve efficiency across the system. It marks the first time since 2010 that the number of Federal Reserve employees is slated to drop year over year. More from Reuters.

📱 India’s PhonePe launches zero-fee app store to challenge Google. The Indus AppStore Developer Platform promises zero platform fees and no commission on in-app purchases as the Walmart-backed fintech looks to steal Android developers from Google’s largest market. It will not charge developers a listing fee for the first year but move to a “nominal” cost thereafter, greatly lowering the cost compared to Google’s 15%-30% take rate on in-app purchases. The ecosystem is closely watching whether this alternative succeeds, as the Android operating system runs on over 95% of all smartphones in India. TechCrunch has more.

The Brief

Need a concise summary of what’s going on this week? Look no further. Here’s an overview of important earnings and economic data for the trading week ahead.

Economic Calendar

It’s a busy week of economic events, with investors focused on Friday’s inflation and personal income/spending data. In addition to the above, check out this week’s complete list of economic releases.

Earnings This Week

Earnings remain few and far between, with 40 companies reporting this week. Some tickers you may recognize are $MU, $JBL, $KMX, $NKE, $BB, $COST, and more.