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  • 🥊 September: The Worst Month For Stocks

🥊 September: The Worst Month For Stocks

+ Disney vs. DirecTV: What’s Going On?

Good afternoon! Labor Day weekend just wrapped up, and it was one for the books. With a staggering 17 million passengers flying over the holiday, airports were busier than ever, capping off a record-breaking summer for travel. The TSA has been in overdrive, reporting that its ten busiest days ever all took place this season, including a jaw-dropping 3 million passengers screened on a single day in July.

And it wasn’t just the skies that were packed. Road trips saw a surge too, thanks to lower gas prices compared to last year. But it wasn’t all smooth sailing—travelers faced thousands of flight delays and cancellations, and AAA was busy helping out more than 300,000 drivers with car troubles. From the air to the highways, this Labor Day was a true test of travel endurance!

MARKETS

*Stock data as of market close*

  • Stocks kicked off September on a sour note, suffering their worst day since the market sell-off in early August. The Dow Jones Industrial Average plummeted 1.51%, or over 600 points, while the S&P 500 tumbled 2.12%. The tech-heavy Nasdaq Composite bore the brunt of the sell-off, dropping 3.26%, dragged down by a sharp decline in technology and semiconductor stocks like Nvidia.

  • This downturn was fueled by fresh economic data that rekindled fears of a slowing economy, with key indicators such as the ISM purchasing managers' index and construction spending showing unexpected declines.

  • The market's poor performance reflects a renewed wave of anxiety over economic growth and the health of the labor market, amplified by expectations of upcoming economic reports.

STOCKS
Winners & Losers

What’s up 📈

  • Vaxcyte ($PCVX) surged 36.39% after the vaccine company reported positive results from its Phase 1/2 study for a 31-valent pneumococcal conjugate vaccine candidate, boosting investor confidence in its future prospects.

  • Under Armour ($UA) rose 5.76% following news that media company Outside has acquired its MapMyFitness platform, potentially adding value to Under Armour's digital ecosystem.

  • DexCom ($DXCM) saw a minor gain of 4.36%.

  • Cboe Global Markets ($CBOE) increased 3.62%.

  • Church & Dwight ($CHD) ticked up 3.35%.

What’s down 📉

  • Cleanspark ($CLSK) plummeted 15.62% after releasing its August mining update, revealing a mining output of 478 bitcoins last month, a decrease from 494 in July and 659 in August of the previous year, sparking concerns about its future profitability.

  • Nvidia ($NVDA) dropped 9.53% after the U.S. Justice Department delivered subpoenas to Nvidia and other companies as part of an investigation into potential antitrust law violations, which significantly impacted the broader chip sector.

  • Intel ($INTC) declined 8.80% amid ongoing speculation about its potential removal from the Dow Jones Industrial Average, driven by its nearly 60% year-to-date decline, marking it as the worst performer on the index.

  • Advanced Micro Devices ($AMD), Broadcom ($AVGO), and Qualcomm ($QCOM) fell 7.82%, 6.16%, and 6.88%, respectively, dragged down by Nvidia's sharp drop, which affected the entire chip sector.

  • Boeing ($BA) decreased 7.32% following a downgrade from Wells Fargo to "Underweight" from "Equal Weight," due to concerns about its free cash flow per share potentially peaking by 2027.

  • United States Steel Corp ($X) dropped 6.09% after Vice President Kamala Harris opposed the planned sale of U.S. Steel to Japan’s Nippon Steel during a Labor Day rally, highlighting potential political and regulatory challenges.

  • Upstart Holdings ($UPST) fell 9.98%.

  • Goldman Sachs ($GS) dipped 4.47%.

  • Shopify ($SHOP) edged down 3.79%.

  • Alphabet ($GOOGL) decreased 3.68%.

MARKETS
Worst Month for Stocks: September

Ah, September—the month when Halloween decorations start creeping onto store shelves, and if you’re a stock market investor, a time when your portfolio might give you a scare. Historically, September has been a nightmare for Wall Street, and 2024 is shaping up to be just as spooky.

A Historical Downer

Let’s get straight to the point: September tends to suck for stocks. On average, the Dow Jones Industrial Average ($DJIA) dips 1.51%, the S&P 500 ($SPX) drops 2.12%, the Nasdaq Composite ($COMP) falls 3.26%, and the Russell 2000 ($RUT) slides 3.09%. And these numbers aren't just random blips—they reflect over a century of data. It’s like Groundhog Day, but instead of six more weeks of winter, you get a month of losses.

If that wasn’t enough to make you want to close your brokerage account and head for the hills, bond investors don’t fare much better. The iShares U.S. Treasury bond ETF ($GOVT), which tracks the broad U.S. government bond market, typically has its worst month in September too. This is the part where you cue the sad trombone.

So, Why the Gloom?

Why does September get such a bad rap? Analysts have a few theories. After a summer of sand and sun, traders return to their desks and start to reassess their portfolios, which often means selling off high-fliers. Plus, companies begin thinking about their year-end financials, making it a prime time to offload some winners to balance out the losers. It’s like a spring cleaning—only, you know, in the fall.

But it’s not all bad news. Stocks actually finished August strong, buoyed by surprisingly robust economic data that calmed fears about a faltering job market. And with the Federal Reserve likely to start cutting interest rates for the first time in four years at their next meeting on September 18, there’s a sliver of hope that things could turn around.

Adding to the uncertainty, the August jobs report is due out on September 6. If it disappoints, we could see another selloff like we did last month when the July numbers came in lower than expected.

And let’s not forget about the looming presidential election and the ongoing tension in the Middle East, which could escalate into a full-blown conflict involving major oil producers like Iran and Saudi Arabia.

The Bright Side?

If there’s a silver lining, it’s that gold and the U.S. dollar—two traditional safe havens—have historically performed better in September. So, while stocks might be in for a rough ride, there are still places to park your money if you’re feeling scared.

NEWS
Market Movements

TELEVISION
Disney vs. DirecTV: What’s Going On?

DirecTV subscribers might want to double-check their TV listings this week because ESPN, Disney, ABC, and a host of other channels just vanished. Yep, you read that right—Disney pulled its programming from DirecTV, including streaming services like Hulu, due to a contract dispute.

What Happened?

The blackout happened at a pretty inconvenient time for sports fans. With the new college football season in full swing and the U.S. Open tennis tournament heating up, DirecTV viewers were left hanging. ESPN cut out during fourth-round U.S. Open matches at 7:20 p.m. ET, and just minutes before a big football game between LSU and USC. Needless to say, fans were not happy, flooding social media with complaints.

DirecTV is the third-largest pay TV provider in the U.S., with 11.3 million customers who suddenly have a lot less to watch. The main sticking point? Carriage fees—the amount DirecTV pays Disney to carry its channels. DirecTV wants more flexibility in choosing which channels to offer its customers, while Disney is pushing for a bundled approach that would keep all their channels together, which typically costs subscribers more.

Why the Blackout?

At its core, this dispute is about money—surprise, surprise. DirecTV argues that Disney is being anti-consumer by insisting on bundled packages that drive up costs. For example, ESPN's monthly fee has jumped to about $10, up 40% from $7.19 in 2019. DirecTV’s CFO, Ray Carpenter, claims customers are tired of these "bloated packages" that force them to pay for channels they don’t watch. Disney, on the other hand, says it’s not going to sign any deals that undervalue its content.

When Will This End?

Unfortunately, no one knows when the channels will be back. Blackouts like these can last anywhere from a few days to several years, depending on how quickly both parties can reach an agreement. DirecTV is giving its customers a $20 credit as a consolation, but that’s cold comfort for sports fans missing out on their favorite games.

What Can You Do?

If you’re a DirecTV subscriber missing out on Disney’s channels, you have some options. You could switch to a streaming service like YouTube TV or Hulu Plus Live TV, both of which offer Disney’s full lineup. Just be prepared to shell out between $73 and $80 a month, depending on the service.

In the meantime, keep your fingers crossed that Disney and DirecTV can sort this out before the next big game or episode of your favorite show.

Calendar
On The Horizon

Tomorrow

This week is packed with key labor market data, starting with tomorrow's release of the Job Openings and Labor Turnover Survey (JOLTS). The JOLTS report provides a snapshot of the previous month’s job openings, hires, and separations (like layoffs and retirements) across the U.S. It's a critical indicator of labor market health, especially the job openings figure, which sheds light on the demand for workers.

The previous JOLTS data showed little change, with job openings at 8.18 million—down by 941,000 from a year ago—while the job openings rate held steady at 4.9%. For the upcoming report, economists expect the number of job openings to be slightly lower, around 8.09 million, which isn't expected to cause much concern in the markets.

Earnings:

  • Wednesday: Dick’s Sporting Goods ($DKS), Dollar Tree ($DLTR), and Hormel Foods ($HRL) will report.

  • Thursday: Nio ($NIO), DocuSign ($DOCU), and Bowlero ($BOWL)—yes, the publicly traded bowling company.

  • Friday: Genesco ($GCO) and Big Lots ($BIG) wrap up the week.

Before Market Open:

  • Dick’s Sporting Goods ($DKS) has had a stellar year in 2024, perhaps too much so. While the company boasts a solid balance sheet with plenty of cash to fuel growth or reward shareholders, its stock is currently priced high, suggesting limited upside. Analysts are cautious, recommending a tentative buy. The consensus estimates are earnings per share (EPS) of $3.81 on $3.44 billion in revenue.

  • Dollar Tree ($DLTR), on the other hand, has faced a challenging year, struggling amid high inflation that has particularly affected lower-income consumers. However, with inflation easing and potential rate cuts on the horizon, the outlook might brighten for both the company and its customers. Analysts are cautiously optimistic, noting the stock has significant upside, with the average price target suggesting a 55% increase from current levels. The consensus estimates for Dollar Tree are $1.05 EPS on $7.50 billion in revenue.

NEWS
The Daily Rundown

RESOURCES
The Federal Reserve Resource

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