Gooood morning folks and welcome to this week’s Market News Roundup 🗞️ Here’s the agenda for today’s quick stock market news review:

1. 🖼️ big picture: this week’s overall market sentiment

2. 📊 interesting set-ups: a few stocks worth watching

3. 🔭 Market Mood™ outlook for the week(s) ahead

THIS IS OUR FINAL WEEK GIVING AWAY 100% FREE DISCOUNTS TO SUBSCRIBERS OF OUR BETA MARKET SENTIMENT PLATFORM. SIGN-UP HERE WITH THE PROMO CODE “FIRST250” BEFORE NEXT SUNDAY TO CLAIM YOUR SPOT — ONLY 34 LEFT!

I. Overall News Sentiment 🖼️

• Overall news: -1% sentiment, slightly bearish🔴

• S&P 500 (large cap) news: +9% sentiment, slightly bullish🟢

• Russell 2000 (small cap) news: -75% sentiment, strongly bearish🔴🔴

🎢 Stocks bounce around, finish above even for the 1st time this month

• In a rollercoaster week, stocks started on a sharply positive note with rallies on Monday and Tuesday (the S&P’s biggest two-day surge since March 2020), only to turn negative the next three days. Nevertheless, the major US indexes posted weekly gains of around 1% to 2%, marking just the second positive week out of the past eight.1

🙋‍♀️ September jobs report beats expectations, unemployment at 3.5%

• Stocks ended the week with a drop Friday after a solid monthly jobs report raised expectations that the Fed will approve another rate increase of 75 basis points (+0.75%) next month. Although September’s jobs gain total of 263,000 was down from the prior month’s 315,000 figure, it was modestly above economists’ expectations, and the unemployment rate slipped to 3.5% from 3.7%. The bigger story remains hourly wages, which continued to trail inflation for the 18th (!!) straight month:

🏛️ Bonds: 10-year Treasury yield hovers near 14-year high

• The yield of the 10-year US Treasury bond rose yet again in another volatile week in the bond market. On the heels of Friday’s monthly jobs report, the yield climbed to around 3.88% — down from its recent high of 3.96% on September 27, but still near the highest level in 14 years.

🛢️ Commodities: oil rebounds back toward $93 per barrel

• Oil prices reversed their recent downward momentum after the OPEC consortium of oil producers and its Russia-led allies agreed on Wednesday to cut output by 2 million barrels of oil a day. After ending the previous week just below $80 per barrel, U.S. crude oil was trading near $93 on Friday. 

II. Stocks to Watch 🔥🧊

Now, a quick look at two notable stocks to keep an eye on based on their sentiment detected in stock market news coverage this week:

Advanced Micro Devices (AMD) 👨‍💻 bearish sentiment 🔴

this week: 🔻-98% news sentiment | 🔻-9.4% stock price | view news profile 📰

In a relatively modest week for the market, chipmaker AMD took the cake as the most pessimistic ticker in Wall Street news coverage after falling -13% on Friday behind disappointing preliminary third-quarter results. As part of its quarterly guidance, the company projects its Q3 revenues will be ~14% lower than originally expected, attributing the decline to waning demand in the PC market. 

AMD’s spooky revenue warning sparked declines across the broader semiconductor market, sending peers like Intel , Nvidia , and Micron Technologies down with it as analysts and investors alike fear that corporate earnings this quarter could be much worse than originally anticipated. As a whole, chipmakers — which have been among the largest stocks by market cap over the past few years — are experiencing a full-blown valuation recession. AMD's current market value has decreased by nearly 50% from $178B last December to $94B today; meanwhile AMD's stock has declined 59.4% year-to-date.

In the revenue warning aftermath, several firms have cut their price targets for AMD following suit, though each has maintained a “buy” or “overweight” rating. The silver lining here is that AMD’s valuation is much more attractive now for long-term investors compared to its lofty prices of the past few years (assuming reasonable revenue growth over the next few years). More on this below:

top AMD article this week:

• “AMD: a great stock for the long run, but there are more risks in the near term” ~ Simply Wall St.

Pinterest (PINS) 📍 bullish sentiment 🟢

this week: 🔺+77% news sentiment | 🔺+5.6% stock price | view news profile 📰

On the other end of the spectrum, social media marketplace Pinterest finished highly optimistic in news coverage this week, rising more than +5% driven by a rating upgrade and price target boost from Golden Sachs. Goldman analyst Eric Sheridan issued a statement on Wednesday premarket, raising his rating from 'neutral' to 'buy' and hiking his price target from $24 to $31, citing rising engagement trends on the platform and pointing toward potential for revenue increases in 2023 and 2024.

Pinterest is somewhat of a big fish in the small pond of the “social commerce” market, with a relatively unique business model compared to other social networks — its platform integrates advertisements into pictures shared between users with common interests from home decor to arts & crafts (among other themes). According to analysts like Sheridan, given its ability to capture a greater share of ad budgets vs. competitors, the platform is well-positioned to grow its user base and monetize advertisements in the post-COVID “creator economy”. Add in some alleged acquisition interest from Alphabet, the stock appears poised to grow its valuation over the mid-term:

top Pinterest headline this week:

• “Pinterest stock pops 5% on Goldman Sachs upgrade” ~ InvestorPlace

III. Market Mood™ Outlook 🔭

This week’s relatively neutral news coverage reflected a break in the overwhelmingly bearish market trend of the past month. Persistent inflation and an economic recession continue to dominate the zeitgeist, though this week’s somewhat positive employment report provided a sliver of optimism. Looking ahead, a few major events dot the horizon: the September CPI report due out this upcoming Friday, and the ensuing Q3 corporate earnings schedule over the following few weeks. Here’s what to expect and what to look for:

1. September CPI Report

• After last month’s CPI report revealed more persistent inflation at a higher-than-expected 8.3% growth year-over-year, all eyes will be on this Friday’s inflation report to set the tone for the coming months. This month’s reading will be particularly important, given how high inflation has been over the past few months relative to the Fed’s initial expectations.

• The bottom line here is that inflation absolutely needs to show considerable signs of receding over the next few months before the Fed even thinks about halting interest rate hikes. With projections for this month’s reading to come out at 8.1%, anything higher will all but certainly assure another +75bps rate hike at the next FOMC meeting in November.

2. Q3 Earnings Schedule

• Thursday and Friday of this week will mark the first major set of corporate earnings to be released for third-quarter 2022, led by reports from the country’s largest banks — JP Morgan , Citi , and Wells Fargo . All signs appear to point to lower quarterly financial expectations this quarter vs. the previous as inflation and interest rates begin hitting the balance sheets.

• According to FactSet, companies in the S&P 500 are expected to report the lowest year-over-year earnings growth since the third quarter of 2020. If this rings true, it’s not unlikely that lower corporate earnings could lead to another major wave of job cuts at large institutions, spurring a shift in the employment rate over the months to come and further turning the flywheel into recession; by some accounts, the economy actually needs a higher unemployment rate for inflation to decline markedly.

Anyways, that’s all for this week. As always, the future remains to be seen — let us know if there’s anything we missed by commenting below, replying to this email, or emailing us directly at [email protected]. And if you liked this post, please support us by clicking the like button! Best of luck to all of you in the markets this week, stay safe out there, and thank you for reading. 😎

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Credit to the respective teams cited below: