Weekly Recap

• The major indexes extended their gains. Despite a negative start to September in the first week, the major indexes have come back with vengeance and climbed for a fifth week in a row. Each index rose more than 1% for the week. The S&P 500 and the Dow pushed their record levels higher while the NASDAQ ended just 2% below its all-time historic peak.
• Earnings season went into full swing. Two major U.S. banks, JPMorgan and Wells Fargo released Q3 earnings results on Friday with both banks climbing higher after their reports. Analysts forecast that earnings for all companies in the S&P 500 would rise by an average of 4.1% overall, according to FactSet. 
• Inflation continued to cool. On Thursday the Labor Department on Thursday said that the consumer price index (CPI) rose 0.2% in September from the prior month and was up 2.4% from a year ago. This was the lowest level in three years, though the report came in slightly hotter than expected.
• Strong U.S. labor market growth. Labor market data on Friday came in far above expectations. The U.S. economy generated 254,000 new jobs in September, exceeding economists’ consensus forecast for around 140,000 and delivering the strongest result in six months.
• Yields went higher. The yield of the 10-year U.S. Treasury note climbed for the fourth week in a row and closed at 4.08% on Friday—up from 3.98% at the end of the previous week and well above a recent low of 3.62% on September 16th.
• Fed minutes were released. Minutes released on Wednesday from the U.S. Federal Reserve’s September revealed that there was arguing over the half-percentage point rate cut that was ultimately approved. Some officials argued for a smaller quarter-point reduction, although only one of the 12 voting Fed members ended up opposing the half-point cut in the final vote tally.
• Consumer sentiment went lower. Friday’s preliminary reading from the University of Michigan’s Consumer Sentiment Index was 68.9, down from a reading of 70.1 the previous month. Most economists had anticipated a small increase.
• An update on stock buyback spending. According to a report from the S&P Dow Jones Indices, companies in the S&P 500 boosted their stock buyback spending to nearly $878 billion in the 12-month period that ended in June 2024, up 8% from the same period a year earlier, S&P Dow Jones Indices reported.
• Oil prices extended gains. Oil prices settled lower on Friday but rose for the second straight week. Brent crude oil futures settled down 36 cents, or 0.45%, at $79.04 a barrel. EDT. U.S. West Texas Intermediate crude futures settled down 29 cents, 0.38%, to $75.56 per barrel. Both benchmarks rose by more than 1%.
• China's inflation came in lower than expected. Chinese consumer prices rose less than expected in September, while factory-gate charges fell for a 24th straight month.
• Kinder made its IPO. Early childhood education provider KinderCare went public on Wednesday. The largest private provider of early childhood education debuted under the ticker "KLC" on the New York Stock Exchange at $24 per share.
• All eyes are now on the retail report for next week.  A report on U.S. retail sales scheduled to be released this Thursday will indicate whether a recent positive trend extended into September. The Commerce Department reported last month that sales rose 0.1% in August.

Most Active Stocks

• Netflix (NFLX)
• Arcadium Lithium (ALTM)
• Grab Holdings Limited (HOLD)
• Wells Fargo & Company (WFC)
• Bank of America (BAC)

Biggest Gainers

• Affirm Holdings (AFRM) +12.07%
• Uber Technologies (UBER) +10.81%
• CleanSpark, Inc. (CLSK) +10.74%
• Trump Media and Technology Group (DJTWW) +9.99%
• Lyft, Inc. (LYFT) +9.59%

Biggest Losers

• Tesla (TSLA) -8.78%
• Celsius Holdings (CELH) -6.04%
• Novavax, Inc. (NVAX) - 2.91%
• Align Technology, Inc. (ALGN) -3.31%
• Sociedad Química y Minera de Chile S.A. (SQM) -3.41%

Weekly Notables

Boeing to Slash 17,000 Jobs

Boeing plans to cut about 10% of its workforce, or about 17,000 people. The manufacturer will also delay the launch of its new 777X wide-body planes until 2026, citing development issues.  CEO Kelly Ortberg said in a staff memo Friday afternoon, "Our business is in a difficult position, and it is hard to overstate the challenges we face together. Beyond navigating our current environment, restoring our company requires tough decisions and we will have to make structural changes to ensure we can stay competitive and deliver for our customers over the long term.” A factory strike has been going on for nearly a month. 

Tesla Unveils Robotaxi

Shares of electric vehicle maker Tesla dropped 9% after the company unveiled its Robotaxi. The long-awaited Robotaxi event failed to impress investors. CEO Elon Musk said during the event that consumers would be able to buy one for a price tag under $30,000. Analysts at Barclays said the revelations had failed to highlight any near-term opportunities for Tesla, instead prioritizing Musk’s vision for a fully autonomous driving future.

The Week Ahead

• Potential market moving catalysts this week: No big data reports will be on the plate until Wednesday when the export and import prices report comes out from the U.S. Bureau of Labor Statistics. On Thursday the U.S. Census Bureau will report retail sales while the U.S. Federal Reserve will report industrial production and capacity utilization. Additionally, the National Association of Home Builders will release the housing market index, and the U.S. Department of Labor will release weekly unemployment claims. On Friday the U.S. Census Bureau will release housing starts.
• Earnings on deck this week: United Airlines, Citigroup, Bank of America, Johnson & Johnson, Progressive, Goldman Sachs, Charles Schwab, US Bancorp, Alcoa, Kinder Morgan, Morgan Stanley, Synchrony, Discover, Equifax, Netflix, American Express, and P&G.

Earnings Spotlight: Netflix

Streaming giant Netflix is set to report its Q3 earnings report late Thursday. On Friday, brokerage firms Guggenheim Securities and Macquarie Capital raised their targets for Netflix stock. Earlier in the week, price-target hikes also came in from Deutsche Bank, Morgan Stanley, Oppenheimer, Piper Sandler and TD Cowen. Shares of Netflix are up 56% YTD.  Analysts polled by FactSet expect Netflix to earn $5.09 a share on revenue of $9.77 billion in the third quarter. That would translate to year-over-year growth of 36% in earnings and 14% in sales.