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Fabrice Cabaud
Wall Street on Friday suffered its work week since late May, as market participants that had driven stocks to record highs faced a reality check in a combination of trade developments, weak economic data, and concerns over the independence of federal organizations from U.S. President Donald Trump.
The roller-coaster ride for equities began with the conclusion of the Federal Reserve's fifth monetary policy committee meeting on Wednesday. The central bank held its key rate steady, and chair Jerome Powell signaled that policymakers were in no hurry to cut interest rates. Stocks sold off after the Fed's messaging, and traders were quick to dial back rate cut odds for September.
Those odds took another hit on Thursday, and stocks took an additional beating after the release of a hot inflation indicator. The core personal consumption expenditures price index - widely seen as the Fed's preferred inflation gauge - came in a tad hotter than anticipated on a Y/Y basis for June, and the +2.8% reading remains stubbornly higher than the central bank's desired +2% target.
Then came Friday's nonfarm payrolls report. According to government data, U.S. job growth in July was much weaker than anticipated, while payrolls for May and June were collectively revised lower by 258K. Joseph Brusuelas, principal and chief economist at RSM US LLP, dubbed it the "worst major economic report in the post-pandemic era." Rate cut odds for September sharply whipsawed back up to above 80% following the data.
Trump alleged that the jobs data had been "rigged" to make him and the Republican party "look bad." He also said he would fire Bureau of Labor Statistics head Erika McEntarfer after accusing her of faking jobs data before the U.S. election last year.
Turning to trade, this week also marked the reinstatement of reciprocal tariffs on several U.S. trading partners that had been postponed twice since their initial announcement on "Liberation Day" in April.
Amid all the week's headlines, investors kept an eye on the second quarter earnings season as well, which picked up significant steam. Grabbing the spotlight were a mixed bag of quarterly reports from tech titans: Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) impressed with their performance, Amazon (NASDAQ:AMZN) disappointed, and Apple (NASDAQ:AAPL) largely delivered.
For the week, the S&P (SP500) slid -2.4%, while the tech-heavy Nasdaq Composite (COMP:IND) fell -2.2%. The blue-chip Dow (DJI) slumped -2.9%. Read a preview of next week's major events in Seeking Alpha's Catalyst Watch.
Seeking Alpha's Calls Of The Week
AppLovin (NASDAQ:APP) Stock Price Presents A Golden Buying Opportunity.
Here's Why Oxford Industries (NYSE:OXM) Is An Attractive Contrarian Pick.
Upgrading Albemarle (NYSE:ALB): Now It's Really Time To Look At Lithium.
VXX: Not A Buy And Hold, But Can Be Used As A Temporary Hedge.
V.F. Corp (NYSE:VFC) Is Now A Hold As Its Q1 Report Had Clear Positives.
Fannie Mae And Freddie Mac - Privatization On Unfavorable Terms.
Downgrading SentinelOne (NYSE:S) Ahead Of Upcoming GenAI Storm.
The Buying Window For Vertiv (NYSE:VRT) Has Passed, Time To Hold.
Sysco's (NYSE:SYY) Mixed Q4 Results And Weak Outlook Cap Upside.
Is FS KKR Capital's (NYSE:FSK) Hefty 12% Dividend Yield Sustainable?
Weekly Movement
U.S. Indices
Dow -2.9% to 43,589. S&P 500 -2.4% to 6,238. Nasdaq -2.2% to 20,650. Russell 2000 -4.2% to 2,166. CBOE Volatility Index +36.5% to 20.38.
S&P 500 Sectors
Consumer Staples -1.1%. Utilities +1.5%. Financials -3.8%. Telecom flat. Healthcare -3.9%. Industrials -3.4%. Information Technology -1.4%. Materials -5.4%. Energy -1.6%. Consumer Discretionary -4.5%. Real Estate -3.5%.
World Indices
London -0.6% to 9,069. France -3.7% to 7,546. Germany -3.3% to 23,426. Japan -1.6% to 40,800. China -0.9% to 3,560. Hong Kong -3.5% to 24,508. India -1.1% to 80,600.
Commodities and Bonds
Crude Oil WTI +3.3% to $67.33/bbl. Gold +0.6% to $3,413.8/oz. Natural Gas -0.9% to 3.083. Ten-Year Bond Yield -0.2 bps to 4.219.
Forex and Cryptos
EUR/USD -1.33%. USD/JPY -0.2%. GBP/USD -1.18%. Bitcoin -3.4%. Litecoin -5.3%. Ethereum -5.7%. XRP -5.8%.
Top S&P 500 Gainers
Generac Holdings (GNRC) +23%. Teradyne (TER) +16%. eBay (EBAY) +13%. Corning (GLW) +12%. Western Digital (WDC) +11%.
Top S&P 500 Losers
Align Technology (ALGN) -34%. Eastman Chemical (EMN) -25%. Baxter International (BAX) -25%. Coinbase Global (COIN) -20%. Moderna (MRNA) -19%.
Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section.
