The major benchmarks are pacing for steep weekly losses
The past five days were nothing short of a roller coaster, after the major indexes last week scored a much-needed win. Key inflation data rolled in, while initial jobless claims fell for the fifth consecutive week. However, the three indexes were last seen on track to log steep weekly losses, following a bevy of economic updates. Though the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) started the week with a fourth-straight win, they then saw their worst day since 2020, on the heels of August's consumer price index (CPI). More volatile trading followed that session, with stocks turning in a win just before the close, as both retail sales and manufacturing data weighed. To close out the week, FedEx (FDX) issued a global recession warning, which had broader-market implications.
Analyst Notes Continue to Pour In
This week brought another barrage of adjustments from the brokerage bunch. BofA upgraded SoFi Technologies (SOFI) ahead of the end of the student loan moratorium, and Nikola (NKLA) notched a bull note on potential green hydrogen demand. Jefferies, meanwhile, said Nordstrom (JWN) could be resistant to inflation. Unique entry points were highlighted as well, as Piper Sandler upgraded Carvana (CVNA) to "overweight" after saying the equity is "grossly undervalued," and Berenberg called Merck (MRK) a "low-risk value option." Meanwhile, Keybanc Capital Markets said Twilio (TWLO) is "well positioned" to increase gross margins, and Morgan Stanley said Alcoa (AA) offers "deep value."
Meanwhile, Credit Suisse weighed in on the casino sector with an upgrade to "outperform" for Wynn Resorts (WYNN), and downgraded Oatly (OTLY) after noting "more acute" inflation in Europe. Elsewhere, Adobe (ADBE) nabbed a pre-earnings bear note from Mizuho, and Goldman Sachs (GS) earned a steep price-target cut from Deutsche Bank.
This Week's Top Headlines
Arguably, the most drastic update came at the end of the week, with FedEx withdrawing its full-year outlook after its CEO warned of a "worldwide recession." Alphabet's (GOOGL) Google unveiled its secret project called Aalyria, while Adobe (ADBE) inked a deal to acquire design software firm Figma for roughly $20 billion.
The railroad industry had investors holding their breath, too, though companies and unions reached a tentative deal to avoid potentially costly strike. Meanwhile, Rent the Runway (RENT) announced restructuring plans that may save the company between $25 an $27 million. Lastly, Bristol-Meyers Squibbed (BMY) gained U.S. Food and Drug Administration (FDA) approval for its plaque psoriasis treatment, and Starbucks (SBUX) hiked its long-term forecast amid a business reinvention.
Next Week Brings Long-Awaited Fed Decision
The Federal Reserve is set to release its comments next week, and Wall Street is already anticipating another interest rate hike. In addition, housing market data and earnings reports from a handful of big names will trickle in. In the meantime, dive into what shaky investor sentiment could mean for the S&P 500.