By: Brian Sozzi
Six sessions into the month and this much is clear: It will be a weird September.
Weird in the sense the market is sending out red flags, but the bulls are ignoring them and instead praying for an amazing third-quarter earnings season. But there are enough negative undercurrents in this market right now to batten down the hatches for a month’s end/early October storm.
(1) Dow Jones Industrial Average and S&P 500 down slightly on the month despite the strong August employment report.
(2) Amazon (AMZN) down 2% since hitting a record high on Sept. 4.
(3) the cryptocurrency rout continues — the MVIS CryptoCompare Digital Assets 10 Index has crashed 80% from its January peak. The index is a modified market cap-weighted index that tracks the performance of the 10 largest and most liquid digital assets.
(4) the Philadelphia Semiconductor Index, aka the SOX, dropped below its 50-day moving average on Tuesday for the first time since Aug. 23.
Even favorable product news from the red-hot Advanced Micro Devices hasn’t saved this leading indicator index. If anything, you do have to like how the market acts with 10-year yields hovering back around 3%. More on that via TheStreet’s @Jacobsonenshine. But pullbacks in hotter areas of the market hint at a nervousness about something, perhaps the elections, perhaps a few more Federal Reserve meetings. Whatever it is, it’s getting priced in.
Last check has #HurricaneFlorence packing gusts north of 170 mph as it barrels toward the Carolinas. To those in its path, stay safe.
Weather data firm Planalytics’ initial estimate on the potential economic impact of Florence in the consumer and retail sector is $700 million in lost sales. Think closed stores and short-term delays in getting products back onto shelves. But per the usual with storms of this magnitude, some companies are poised to benefit from the clean-up efforts.
Long-time Baird retail analyst Peter Benedict noted that Home Depot (HD) and Lowe’s (LOW) often see a 50-basis-point-plus positive sales impact during a quarter when a storm hits. The companies will often see sales increases for several quarters as communities rebuild. Unsurprisingly, Home Depot and Lowe’s shares have gained 5.3% and 4.7%, respectively, over the past five sessions.