Stocks End Sharply Lower on Inflation Worries
4:00 pm Friday, September 10th, 2021
Stocks edged lower in choppy trading Friday, keeping major indexes on track to end this holiday-shortened week lower.
The major indices, however, did start the day with decent gains ranging from 0.6-0.7% in a buy-the-dip effort. The positive start came despite continued upwards pressure in the Producer Price Index (PPI) report for August, which showed producer prices for final demand up 8.3% year-over-year.
The market faded the positive start on no specific news, and then it was reported that a judge ruled against Apple on several issues in the Epic Games case. Notably, Apple must provide developers a way for outside payment options. Interestingly, one thing in Apple’s favor was that the judge did not find AAPL is an antitrust monopolist in the submarket for mobile gaming transactions.
Shareholders are interpreting the ruling as a setback for app stores, including the one from Alphabet (GOOG), which operates the Google Play store.
On the broader market action, there is a split between the cyclical and counter-cyclical sectors. The materials (+1.0%), energy (+0.6%), and consumer discretionary (+0.6%) sectors outperform in positive territory, while the utilities (-1.0%), real estate (-0.6%), and health care (-0.1%) sectors underperform in negative territory.
The semiconductor space is another pocket of strength amid some encouraging revenue numbers for August from Taiwan Semi (TSM). The Philadelphia Semiconductor Index was up 1.8%.
Looking at other individual movers, Affirm (AFRM) was soaring more than 30.0% following its earnings report, while Kroger (KR) was struggling with a 7% decline following its results.
The 10-yr yield was up four basis points to 1.34% as investors digest the hot PPI data.
