TECH-HEAVY: Inside Elon; Outside Trump’s SPAC; did the S&P 500 break bad; and (will) Smith & Wesson shoot the lights out?

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This was Wall Street on Friday:

Yes, the three majors reversed all their gains, despite a decent August jobs report (+315,000)

For the week, the S&P 500 and Dow Jones Industrial Average fell 3%, the tech-heavy Nasdaq gave up well over 4%.

Talking of jobs, the US stock market will be closed on Monday night Sydney time, for Labor Day, the first Monday of September and a celebration of not working.

A little irony there as this pic from Mizuho shows the yawning chasm between average hourly earnings growth in the States and rampant inflation.

Image: Mizuho Securities

US investors remain transfixed by the struggle playing out across markets dominated by a Federal Reserve intent on hitting its 2% inflation target vs actual real inflation which has already taken a pound of Wall Street flesh and sparked a technical recession.

Those worries will remain at the forefront of another busy, albeit shortened week of US trade.

Earlier in the week, the S&P 500 slipped through the K-Hole of its 50-day moving average – literally the average of the last 50 closing prices – techno-thrilling analysts like Carl Capolingua tell me this is breaking bad and a negative sign for whatever momentum is out there.

Year to date, these nagging fears of recessionary conditions and its impact on labor markets have taken 15% off the Dow Jones Industrial Average, 16% off the S&P 500 and the flight from growth intertwined within the souring sentiment has lopped a full 25% off the tech-heavy Nasdaq.

Now into the mix comes an inflection point for a global economy wracked by volatile energy prices, resurgent inflation and a wave of monetary tightening.

At lunchtime in Sydney, European futures, the Euro and most commodity currencies are down sharply as the union’s disintegrating energy crisis is exposed by Russia’s Nord Stream-owning state-run Gazprom which has again turned off the taps.

European ministers will have confab next week while G7 leaders have already agreed to cap Russian oil in the shadow of worsening conflict in Ukraine.

Germany — most affected by the Nord Stream pipeline cutoff — has unveiled a $65 billion package to protect consumers.

Shares in the Asia-Pacific traded mixed on Monday as investors digest China’s Caixin Services Purchasing Managers’ Index for August which came in at 55.0, compared with July’s print of 55.5.

This Week in America:

From Tuesday in New York, listed companies will begin to update investors on the outlook for the rest of 2022. This week also brings the US August jobs numbers.

Elsewhere on the economic data front, investors will take in the S&P Global services PMI flash, employment trends and the ISM non-manufacturing PMI.

OPEC+, that bastion of cooperation, will meet to argue over production cuts.

And lots of. central bank decisions starting with ours, then Canada’s and then Christine Lagarde’s.

This week in Elon’s head:

also…


 

US updates & earnings this week:

Tuesday, September 6

Digital World Acquisition Corp (DWAC) will be fun to watch as the special purpose acquisition company holds a shareholder meeting on Tuesday to decide how to play the looming merger with Trump Media and Technology Group (TMTG).

That’s right. TMTG – an American icon and media and technology SPAC founded in January 2021 by the ex-Pres and headed by Republican US representative Devin Nunes who resigned his House seat to become the SPAC’s CEO.

DWAC shares dropped last week as federal filings show more troubles for the media set up and its attempted merger with former President Donald Trump’s tech and social-media platform.

In June the ex-Trump left the board of TMTG, which is being investigated by the SEC and a grand jury in Manhattan.  These exits from the board occurred just three weeks before the co. got served subpoenas from all over.

Wednesday, September 7

Kicking off the week for earnings will be John Wiley & Sons, NIO, Asana, Casey’s General Stores, Dave & Buster’s Entertainment and GameStop.

Apple Inc is said to be holding an Apple event on Wednesday too. An event which looks a lot like an excuse to unveil some new tech. It could be a watch.

Barclay’s: A beat for eBay is incoming.

There has been a dramatic shift in sentiment around eBay’s business the lineage of which can be traced back directly to its growth hangover. eBay shed 13% last quarter and 9% before that.  In the balance is the global commerce company’s long-term status as a serious tech-heavy player. eBay Inc connects through its Marketplace platforms, buyers and sellers in more than 190 markets around the world. Its primacy of its seat at the table is likely to be determined by the trajectory its share price takes and that will likely depend on how well the marketplace platform can succeed at slowing and then reversing those losses over the next few quarters.

eBay Inc via Nasdaq year to date

After soaring in earlier phases of the pandemic, organic growth turned negative in recent quarters, and investors aren’t chuffed and while the street isn’t expecting a miracle turnaround this week, Wednesday’s earnings update has been supercharged by a note from Barclay’s suggesting there’s potential upside to eBay in the vicinity of 30%.

eBay executives projected organic sales would fall by as much as 9% this quarter, with losses moderating for the rest of fiscal 2022, so it might just be worth watching volumes and trades when the word is given.

Barclay’s sees a fiscal-year EPS of $4.07, compared with a consensus estimate of $4.05.

eBay did report Q2 top and bottom line beats and it also recently announced the acquisition of trading card company TCGplayer and myFitment Group, an auto parts and accessories e-commerce platform.

Thursday, September 9

Smith & Wesson Brands (SWBI) will be in focus after the bell on Thursday.  The stock hit a record high of $39.61 a pop late in 2021 and is currently trading near $13. SWBI is prone to big moves after mass shootings and reporting earnings.

SWBI via Nasdaq YTD

Chances are they shot the lights out again.
 

NASDAQ IPOs this week

Jupiter Neurosciences, Inc. is a clinical stage research and development pharmaceutical company located in Jupiter, Florida. CEO Christer Rosen says Jupiter has developed a unique resveratrol platform product primarily targeting treatment of neuro-inflammation. The product candidate is primarily targeting Mild Cognitive Impairment/early Alzheimer’s disease with an early development program in TBI/concussions.