Stocks Continue to Fall On Inflation Concern
4:03 pm Thursday, September 30th, 2021
Stock markets continued to fall Thursday as inflation fears persisted and expectations grew that the U.S. Federal Reserve will tighten policy in the coming months.
Six sectors were down at least 1.0%, including industrials (-1.3%), financials (-1.3%), and real estate (-1.3%) tied for last. The information technology sector outperforms on a relative basis with a 0.4% decline.
Early softness in the value stocks has turned into weakness, which has trickled over to the large growth stocks on no confirmed catalyst. Quarter-end rebalancing could be playing a subtle role, but there has been have evident headwinds today.
For instance, CarMax (KMX) missed EPS estimates, Bed Bath & Beyond (BBBY) provided terrible earnings results and guidance, and McCormick (MKC) trimmed its full-year EPS guidance due to ongoing supply chain issues. Notably, BBBY shares are down 23%.
In addition, weekly initial claims were higher than expected at 362,000 (Briefing.com consensus 340,000), China’s September Manufacturing PMI entered contraction territory with a reading of 49.6, and the Chicago PMI decreased to 64.7 in September (Briefing.com consensus 65.0) from 66.8 in August.
The Treasury market has firmed up with the negative bias in stocks and the accompanying softness in the economic data. The 10-yr yield is down three basis points to 1.51% after hitting 1.55% earlier today. The U.S. Dollar Index is unchanged at 94.34.
In positive-sounding news, Merck (MRK) confirmed an acquisition of Acceleron Pharma (XLRN 174.20, -1.16, -0.7%) for approximately $11.5 billion, or $180.00 per share, in cash. Separately, Congress reportedly reached an agreement to fund the government through Dec. 3.
