Markets Continue to Crumble as Fed Reiterates Hawkishness

While the central bank has been anything but shy about its hawkish intentions, investors seem convinced that the aggressive rate hikes are putting the economy on track for a recession. As such, purse strings are tightening up, and the Dow Jones Industrial Average (DJI), S&P 500 Index (SPX), and Nasdaq Composite (IXIC) are all pacing for another round of weekly losses. While the major benchmarks started the week with a last-minute win, surging bond yields put a dent in sentiment ahead of the Fed's interest rate decision. As expected, the central bank raised rates by 75 basis points, sending stocks lower, while recession fears took hold and sent the market deeper into the red. To close out the week, the Cboe Volatility Index (VIX) is moving higher, as the blue-chip index breaks below the psychologically significant 30,000 level.

Earnings Calls & Revenue Outlook Revisions

While the earnings docket has been relatively thin of late, a few notable companies released their reports this week. General Mills (GIS) had one of the best post-earnings reactions, hitting a record high after hiking its full-year forecast. Conversely, Stitch Fix (SFIX) hit rock bottom after missing on earnings, revenue, and 2023 guidance. AutoZone (AZO), meanwhile, saw its same-store sales increase 6.2% year-over-year. 

Cosmetic concern Coty (COTY) revised its full-year forecast, issuing a hefty raise thanks to strong demand for its luxury beauty products. On the other end, Novavax (NVAX) lowered its second-quarter guidance, but J.P. Morgan Securities warned that the revision wasn't nearly enough.

Analyst Notes You May Have Missed

With volatility high in China, excess inventory in North America, and currency headwinds in Europe, Barclays downgraded Nike (NKE) ahead of the blue-chip apparel maker's latest quarterly report. Western Digital (WDC) hit two-year lows following a bear note, while Canada Goose (GOOS) brushed off an upgrade as options bears targeted the equity. Meanwhile, Eli Lilly (LLY) popped on a bull note and U.S. Food & Drug Administration (FDA) approval, Goldman Sachs was notably optimistic that Estee Lauder's (EL) headwinds were already priced in, and Norwegian Cruise Line (NCLH) was upgraded on strong bookings.

 

Next Week Brings Long-Awaited Fed Decision

Next week marks the end of September, and there's plenty to unpack before we head into the new month. Wall Street will digest a deluge of consumer-related reports, while a handful of companies are set to enter the earnings confessional. Also check out what shorting opportunities await with call buyers out of the picture.