It's been a week to forget for the big US equity indices, including a 5% one-day slump in the Nasdaq on Tuesday 13 September thanks to fears about inflation.
While the headline figure eased to 8.3% in August versus 8.5% in July, it was worse than the 8.1% forecast by economists. Dig into the data and you'll realise why investors got the hump.
Petrol prices might have dipped, but plenty of other stuff is going up in price including property rent, food and medical care. That frustrated the market as high inflation is proving stickier than previously expected.
It also means we face the prospect of further interest rate hikes, with the Federal Reserve set to announce its latest rate decision next Wednesday (21 September) along with its new economic predictions.
FedEx (FDX:NYSE) issued a big profit warning on 15 September which made investors fret about the near-term outlook for the global economy. Adobe (ADBE:NASDAQ) also saw its shares take a tumble after saying it would spend $20 billion on buying design company Figma and issuing cautious earnings guidance.
The big stocks reporting next week include Costco (COST:NASDAQ) on 22 September, which will be closely watched by the market as a litmus test for consumer spending.
RIVIAN
While the headlines indices and various big-name stocks caused investors a headache, there were several names moving higher.
Electric vehicle maker Rivian (RIVN:NASDAQ) enjoyed another strong week on the stock market, a somewhat different situation to its struggles earlier this year.
Investors continued to bid up the shares after last week's announcement that the firm had inked a deal with German automotive giant Mercedes-Benz (DAII:FRA) to develop light commercial vehicles in Europe.
Rivian shares, which were trading at $120 at the start of the year, hit $40.75 on 15 September which is quite a gain on the $32 level seen at the start of the month.
The agreement will see the firms jointly produce two electric commercial vans, one based on Mercedes architecture and one based on the Rivian platform, with the aim of moving to production in a few years' time.
The design of the Rivian version is different to the electric delivery van the firm is making for Amazon (AMZN:NASDAQ) and expands the company's geographic presence.
Wedbush tech analyst Dan Ives sees the European electric van market being worth over $20 billion in annual sales in just a few years.
ORACLE
Database software firm Oracle (ORCL:NASDAQ) pleased investors after first quarter revenues came in ahead of analysts' expectations on Monday (11 September), pushing the shares up 9% on the day.
Revenues through August climbed 18% year-on-year to $11.8 billion, beating estimates of $11.6 billion while adjusted earnings per share was $0.56.
The strong dollar crimped growth and reduced earnings per share by eight cents in the quarter.
The company said it continued to benefit from increased demand for cloud infrastructure spending. First quarter cloud infrastructure revenues jumped 58% in constant currencies while cloud application revenues increased by 48%.
The two fast growing divisions now represent over a third of group revenues. CEO Safra Catz commented: ‘As our cloud businesses become a larger-and-larger percentage of our overall business, we expect our constant currency organic revenue growth rate to hit double-digits with a corresponding increase in earnings per share.’
Oracle guided for second quarter revenues to grow between 21% and 23% in constant currencies.
PELOTON
Shares in Peloton (PTON:NASDAQ) plunged after the connected fitness kit seller announced that co-founders John Foley and Hisao Kushi were leaving the company. Yet the shares subsequently rebounded on optimism over the leadership shakeup, part of chief executive Barry McCarthy's aggressive turnaround of the struggling business.
Formerly Peloton's long-serving CEO, Foley, who is widely regarded as the creative force behind today's global connected fitness industry, stepped down from the hot seat in February amid a round of layoffs and has now resigned from his position as executive chairman.
His fellow co-founder Hisao Kushi will leave his position as chief legal officer on 3 October and chief commercial officer Kevin Cornils will leave the company on 23 September.
Peloton's business boomed during the pandemic amid a craze for connected bikes and treadmills during lockdowns, sending the shares north of $160 in December 2020. However, that pandemic boost has faded, with fourth quarter results (25 August) revealing declining sales and deeper operating losses, and the shares down 90% over one year.
