How did stocks perform for the week of September 7-11?
The S&P 500 fell 0.8% for the week ending Friday, September 11, with the Dow down 1.6% and the Nasdaq off 0.7%. Markets were closed Monday for Labor Day, leaving four trading sessions. The index dropped for four straight days before Friday's rally, per Yahoo Finance, pulled down by a hawkish repricing of Fed odds and a rocky pair of earnings nights from Oracle and Adobe.
What did Friday's rebound look like?
The S&P 500 closed at 7,656.98, up 0.86% on the day. The Dow added 0.98% to 52,573.29 and the Nasdaq gained 0.96% to 26,333.04. The bounce snapped the four-session losing streak but wasn't enough to erase the week's damage, since Monday through Thursday had already priced in a cooler read on the Fed.
What did the August PPI report show?
Producer prices rose 0.4% month over month in August, in line with consensus, and sit 5.4% higher than a year ago, according to the Bureau of Labor Statistics. Core PPI, which excludes food and energy, rose only 0.2%, a tenth below the 0.3% forecast. Diesel fuel alone jumped 24.1% and accounted for more than a third of the goods-side increase.
What did the August CPI report show?
Headline CPI rose 0.4% month over month and 3.4% year over year. Core CPI, which strips out food and energy, rose 0.3% month over month, a tenth above the 0.2% forecast, while the year-over-year core rate cooled to 2.4% from 2.5% the month before, per the BLS CPI release. The hot monthly core print was the trigger for Friday's rate-odds repricing even as the annual trend kept easing.
How did Oracle and Adobe react to their earnings?
Oracle beat on every line Thursday night: adjusted EPS of $1.92 versus $1.74 expected, revenue of $19.35 billion versus $19.14 billion expected, and remaining performance obligations, its cloud backlog, up $26 billion quarter over quarter to $664 billion, according to CNBC and Investing.com. The stock rose about 5.5% Friday, roughly half the 11.5% move options had priced in.
Adobe also beat, posting non-GAAP EPS of $6.13 against $6.07 expected on revenue of $6.76 billion, up 13% year over year, per Yahoo Finance. Shares still fell more than 2% in the after-hours session and extended that decline the next day on soft fourth-quarter guidance, a reminder that a beat means little to the tape when guidance disappoints.
Why did the VIX jump this week?
The VIX closed at 17.84 on Friday, up 8.4% on the day and its highest level in 28 sessions, as the hot core CPI print collided with falling oil prices and a stack of risk events now sitting on the calendar. Options dealers price volatility ahead of an event, not just in reaction to one, and next week gives them two: a Fed decision and a quarterly options expiration landing four trading days apart.
What's on the calendar next week?
The Federal Reserve announces its rate decision Wednesday, September 16 at 2:00 PM ET, with the press conference at 2:30 PM ET, per the Fed's own FOMC calendar. Two days later, Friday September 18 is a quadruple witching session, the quarterly expiration where stock index futures, index options, single-stock options and single-stock futures all expire together. Large open-interest unwinds on quad-witching days tend to concentrate dealer hedging flow into the close, which is part of why implied volatility was already climbing into it before the Fed even speaks.
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