Stimulus Package Back and Forth Confuses Market

The markets this week have been heavily influenced by President Trump’s decision to halt and subsequently reopen talks regarding the proposed $2.2 trillion stimulus package. The markets reacted poorly to the decision on Wednesday to halt the talks, with ten of the S&P 500’s 11 sectors falling into the red after the announcement. The recovery — once talks were reopened the following day — was distinct and obvious with all three major US stock indices climbing back by close to 2% across the board as investors and businesses alike remained optimistic that a consensus would be reached.

Last Week’s Top Five Market Winners

Nasdaq Stock Market (NASDAQ)

  • GoPro saw a surge of 35% this week off the back of better-than-expected subscriber numbers, driven by a strong global launch of their new HERO9 Black.
  • The Biotech sector has continued to perform strongly with CRISPR stock Intellia showing gains of 39% after one of the company’s cofounders received a Nobel Prize in Chemistry for her work in developing the gene-editing CRISPR technology.
  • SunPower also experienced favorable trading this week with a rise of 28%, due to the perception that a Biden victory could result in an extension of the federal solar investment tax credit. The continued support of renewable technology has obviously got investors excited.
  • Another strong performing Biotech stock Veracyte made a gain of 27% this week after announcing the release of third-quarter financial results.
  • Food distributor and grocery store retailer SpartanNash experienced a late jump of 30.64% when the news came through that it had issued a warrant to Amazon to purchase 5.4 million common stock.

New York Stock Exchange (NYSE)

  • Asset management firm Eaton Vance saw huge gains this week after the announcement that finance heavyweight Morgan Stanley (MS) has agreed to buy out the firm for 7 billion.
  • 3D Systems was another winner this week with a 37.37% price jump after analysts at Craig-Hallum once again rated the stock as a buy and predicted that the price would in fact double within the year.
  • Cloud software firm Alteryx made gains of 34% this week after better-than-expected revenue and earnings as well as the announcement of new leadership, with a new CEO taking the helm.
  • Another tech stock showing gains this week, Fastly gained 32.77% off the back of good momentum and news that the stimulus package is back on track.
  • Lemonade Inc. also saw big movement this week as investors continued to back the growth stock with a gain of 31.47%.

Last Week’s Top Five Market Losers

Nasdaq Stock Market (NASDAQ)

  • Corbus Pharmaceuticals dropped 33.33% this week after it announced that its research into lenabasum had failed to meet its primary endpoint.
  • Betting company Draftkings experienced a downturn this week after the company and insiders sold off $832 million worth of stock.
  • Nikola Corporation has continued to falter after allegations of fraud led to an 11.93% downturn this week.
  • Fellow sports betting app Penn also got hit with a downward turn this week of 11.07% after sports viewership ratings tumbled.
  • Intercept Pharma dropped 10.72% after the FDA opened an inquiry into the safety of one of its products.

New York Stock Exchange (NYSE)

  • Cinemark stock took a hit this week of 16.45% after competitor Regal cinemas announced they were temporarily closing down theatres due to a lack of demand.
  • Arch Resources was left down 10.09% after news that the company’s current-year earnings were revised by 17.7% downward.
  • Pizza Giant Dominoes fell 9.87% after weak third-quarter earnings underscored otherwise impressive sales growth numbers.
  • Fortive Corporation dropped 9.79% after completing its spin-off of Vontier Corp.
Cinemark Holdings Inc. -1.66 (-16.45%) $8.44 USD Consumer Services
Arch Coal Inc. -4.52 (-10.09%) $40.36 USD Energy Minerals
Dominos Pizza Inc. -42.83 (-9.87%) $391.55 USD Consumer Services
Fortive Corporation -7.58 (-9.79%) $70.11 USD Electronic Technology
Oasis Petroleum Inc. -0.0161 (-9.41%) $0.1556 USD Energy Minerals

Highlights and Lowlights

Stimulus Package Proves Politics Will Continue to Drive Markets

This week we saw more clearly than ever that pre-election uncertainty can have dramatic effects on the markets with President Trump’s tweet on Tuesday calling for a halt to stimulus talks, resulting in a drop across all three major US markets. Historically, market volatility increases in the lead-up to an election, so be prepared for more events of this nature as we approach November 3rd.

Biotech Technology CRISPR Continues to Gain Momentum

It was a big week for biotech stocks involved with the groundbreaking gene-editing tool CRISPR with two scientists behind the technology receiving Nobel Prizes for Chemistry for their work in developing the tool. With the ability to provide treatments for inherited illnesses such as sickle-cell anemia, it is easy to see why the markets have rallied around Intellia Therapeutics(NTLA) and other CRISPR-powered stocks such as Editas Medicine(EDIT).

What is in Store for the Market this Week?

This upcoming week features the proper start of a new earnings season, with the previous season’s earnings results expected to be even more closely followed than usual, due to the particularly tumultuous last quarter, leaving investors eager to understand exactly how revenues and profits have been affected. Uncertainty aside, investor optimism seems to be running high even with the US presidential election just around the corner.

Two big headlines to watch out for include the expected Apple(AAPL) iPhone 12 launch event, at which Apple will be hoping for a positive reception to its new line of devices, as well as Amazon’s(AMZN) Prime Day sales event which runs from October 13-14. The sale has been forecast to generate as much as 9.9B globally and bring with it a hopefully early start to holiday shopping.

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