The stock market shakeout is likely not over yet, even with Friday’s comeback
- Stocks reversed some of their worst losses Friday, but they are still expected to be choppy in the week ahead as investors return from the long Labor Day weekend.
- Investors took profits in tech names in the past week, amid worries that the market and Nasdaq, in particular, had become too frothy.
- There are a few economic reports in the coming week, with the most important Friday’s report of consumer inflation,
The tech wreck is probably not over, despite Friday’s market comeback.
Analysts expect the shakeout in stocks to continue after the long Labor Day weekend, especially in technology names and the Nasdaq, areas of the market that notched the sharpest gains.
After August’s 7% gain in the S&P 500, stocks started September strong, and then just as quickly rolled over. The Nasdaq lost 5% Thursday and was down sharply Friday but pared losses to decline 1.5%. The S&P 500 was down about 2.3% for the week, even after a 3.5% loss Thursday.
“I think this is a good wake-up call and a reminder that there are risks out there,” said Leo Grohowski, chief investment officer at BNY Mellon Wealth Management. “In August, we did take a little bit off the table.”
Analysts expect the week ahead to be busy, with holidays ending and more market pros back at their desks. There is some economic data, most importantly Friday’s consumer price index. The reading on consumer inflation is expected to show little change in core inflation with forecasts for a gain of just 0.2% in August, or 1.6% year over year.
What stocks to look out for this week:
Tesla (TSLA) – Stock split complete. Looking for slight follow through then some bad news to come! That was last weeks prediction by the way…
Apple (AAPL) – Stock split complete. Where she goes only insiders know..
Novavax (NVAX) – The bubble did indeed burst last week.. Continued downside ahead.
Draftkings (DKNG) – This has held up quite well over the last couple of weeks. Once sports betting ramps up this will no doubt be set for take off. Consider buying at these levels! Hope you got in before Mr. Jordan did!