September 12th Market Overview

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Happy Thursday everyone.

September's shaking off its sluggish start, with tech stocks flexing their muscles again. We're seeing green across the board as as the market bets on a dovish Fed next week.

Nvidia's chip chat is still the talk of the town, but I’m keeping an eye on those biotech rollercoasters – they're giving whiplash today.

Lets dig in…

Executive Summary

• S&P 500 gains 0.7%, heading for fourth straight winning session, now just 1.3% from a new record

• Inflation data and upcoming Fed meeting fuel expectations of a quarter-point rate cut

• Tech and communication services sectors lead gains, with Nvidia jumping 2.5% on AI demand optimism

• Moderna plunges 17% after announcing major cost-cutting measures, raising questions about growth strategy

Market Overview

We’re seeing continued upward momentum in the market today. The S&P 500 is up 0.7%, while the Dow Jones Industrial Average has added 150 points, or nearly 0.4%. The tech-heavy Nasdaq Composite is leading with a 1.1% gain. Despite a tough start to September, the S&P 500 has cut its monthly losses to just 0.9% and now sits only 1.3% away from a new record.

Key Market Drivers

1. Rate Cut Anticipation: The market is widely expecting the Federal Reserve to announce a quarter percentage-point interest rate cut at its September 17-18 meeting, boosting market sentiment.

2. Inflation Data: The Producer Price Index (PPI) rose 0.2% in August, in line with expectations. This follows Wednesday’s Consumer Price Index (CPI) report, which showed core prices ticking up but overall inflation declining to its lowest level since February 2021.

3. Tech Rally: Megacap tech and semiconductor stocks continue to boost the market, with investors showing strong interest in AI and chip companies.

4. Economic Indicators: Weekly jobless claims data showed a marginal increase to 230,000 for the week ending September 7, contributing to the overall economic picture.

Stock Spotlight

1. Nvidia (NVDA): Shares jumped 2.5% as CEO Jensen Huang touted strong demand for the company’s new Blackwell AI chips and emphasized the need for public-private collaboration in the AI industry.

2. Warner Bros. Discovery (WBD): Leading the communication services sector with a 6.6% gain.

3. Moderna (MRNA): Stock plummeted nearly 17% after announcing plans to cut $1.1 billion in expenses by 2027, signaling a potentially cautious path forward in R&D despite plans for 10 new product approvals.

4. Gilead Sciences (GILD): Shares rose around 2% following positive phase three trial results for its HIV drug, lenacapavir, which showed a 96% reduction in infections.

5. Meta Platforms (META): Shares increased by 2.6%, contributing to the strong performance in the communications sector.

Other Magnificent 7 Updates

• Alphabet (GOOGL): Gained about 2%, adding to the tech sector’s robust performance.

Other Notable Company News

• Kroger (KR): Shares rallied more than 4% after reporting mixed fiscal second-quarter results, beating earnings expectations.

• Petco (WOOF): The pet retailer’s stock soared 14%, building on Wednesday’s 33% post-earnings rally.

• McDonald’s (MCD): Announced an extension of its $5 value meal into December in most U.S. markets to attract budget-conscious consumers.

• Oxford Industries (OXM): Shares dropped 10% after the upscale clothing company posted disappointing quarterly results.

Sector Watch

Bond Market

The bond market remains steady as investors focus on equitys. The upcoming Fed meeting is expected to impact yield movements.

Policy Watch

The Federal Reserve’s upcoming meeting on September 17-18 is drawing significant attention as investors assess potential shifts in monetary policy. A quarter-point interest rate cut could provide further momentum to the stock market and bolster investor confidence in sustainable economic growth.

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Note: This newsletter is intended for informational purposes only.