Wall Street Breakfast: What Moved Markets

Stocks turned lower Friday after the White House and congressional Republicans reached an impasse in negotiations on the debt ceiling, and talks were broken off with no immediate plans to resume. But the declines were mild, suggesting the markets still believe a deal will be reached. There were also fresh signs of weakening consumer spending in poor quarterly results from Foot Locker, whose shares plunged 27% after the company said lower tax refunds and higher prices for gas, food and rents are hurting its customers' ability to spend on discretionary goods. And shares of regional banks tumbled after Treasury Secretary Janet Yellen said more mergers might be needed. But the three major stock market indexes scored gains for the week, with the Nasdaq Composite climbing 3% for its best weekly showing since March, while the S&P 500 jumped 1.6% and the Dow Jones Average added 0.4%. Read a breakdown of next week's major stock market events in Seeking Alpha's Catalyst Watch.

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Top News Shutterstock Stocks turned lower Friday after the White House and congressional Republicans reached an impasse in negotiations on the debt ceiling, and talks were broken off with no immediate plans to resume. But the declines were mild, suggesting the markets still believe a deal will be reached. There were also fresh signs of weakening consumer spending in poor quarterly results from Foot Locker, whose shares plunged 27% after the company said lower tax refunds and higher prices for gas, food and rents are hurting its customers' ability to spend on discretionary goods. And shares of regional banks tumbled after Treasury Secretary Janet Yellen said more mergers might be needed. But the three major stock market indexes scored gains for the week, with the Nasdaq Composite climbing 3% for its best weekly showing since March, while the S&P 500 jumped 1.6% and the Dow Jones Average added 0.4%. Read a breakdown of next week's major stock market events in Seeking Alpha's Catalyst Watch. Featured Drive winning investment decisions with Premium Research shows that individual investors collectively underperform the stock market, because their decisions are often driven by emotions. We believe that as an investor you can do really well if you find investment opportunities based on 360-degree analysis - not hype. Seeking Alpha Premium's unparalleled stock coverage gives you the insights you need to stay ahead of the curve. With timely insights on stocks, ETFs, and more, you can track the investments that matter most to you. Plus, you can discover hidden gems and compelling new ideas with our exclusive stock ratings. In fact, Seeking Alpha's 'Strong Buy' rated stocks have outperformed the S&P 500 every single year for the last 12 years, according to our backtest. Try Premium for one month for only $4.95 and experience its incredible value for yourself. Go Premium now Autorenews at $239/year. Past performance is no guarantee of future results. Financials Short-handed Renewed concerns over regional banks have been pushing regulators into uncomfortable areas, like facilitating and allowing the largest U.S. banks to get even bigger. Other things that have been invoked are "systemic risk exceptions," which allowed the FDIC to guarantee banks' uninsured deposits, and there are now even proposals for blanket deposit guarantees. The fear is that the situation could spiral if left unchecked and traditional policies may be overlooked to stamp out the crisis. Another hot topic of discussion has been centering around the short-selling of bank stocks. A short-selling ban in 2008 only lasted three weeks and many have argued that the restrictions were not only unnecessary, but actually harmed market quality and stability. (58 comments)       Financials 13F season First quarter's 13F season kicked off this week, giving investors a chance to see what they bought and sold during Q1, like long positions, and call and put options, though shorts aren't included in the statements. Stanley Druckenmiller's Duquesne and David Tepper's Appaloosa showed sizable positions in stocks benefiting from the artificial intelligence boom, such as AI-focused Microsoft (MSFT), as well as Nvidia (NVDA), which is up over 100% YTD. Bill Ackman's Pershing Square and Daniel Loeb's Third Point also upped their stakes in Alphabet, which hastily released a chatbot called Bard in March after Microsoft poured billions of dollars into ChatGPT maker OpenAI. Investors additionally eyed the new positions of Warren Buffett - Berkshire Hathaway (BRK.A, BRK.B) took new stakes in Capital One Financial (COF) and alcoholic beverage maker Diageo (DEO). (125 comments)       Consumer Retail on the radar This week saw a flurry of data from the retail sector. Kicking off the festivities was Home Depot (HD), which fell 2% on Tuesday after comparable sales missed estimates and guidance came in light. Target (TGT) said its sales barely grew Y/Y, while a soft forecast was issued due to inventory impacts and retail theft. The macro data may be just as important as individual earnings, and many have an eye out for the figures as well. Data published on Tuesday showed U.S. April retail sales on their first upswing since January, but the 0.4% monthly expansion was still below the expected figure of 0.7%. In terms of Y/Y numbers, things have been steadily declining since last July, with the latest print coming in at 1.6% (and below the 4.9% inflation rate for the same period). Consumers have also continued to shift away from goods spending like furniture, home appliances and electronics - which was all the rage during the pandemic - into services spending such as restaurants, health and personal care, etc. (21 comments)       Tech See you in court The next big tech battle is in the making after Montana Gov. Greg Gianforte signed a bill that would ban TikTok. It's the country's first bill that outright bans TikTok for private citizens, and is set to go into effect in January 2024 - barring an injunction or defeat in the legal system. Proponents of the measure claim it will protect users against "Chinese Communist Party surveillance" and from pro-Beijing misinformation reaching the public, with TikTok being owned by China-based ByteDance (BDNCE). The law will prohibit downloads of TikTok in the state by fining any "entity" - namely the app stores of Apple (AAPL) and Google (GOOG, GOOGL), or TikTok itself. $10,000 would be leveled per day for each time someone "is offered the ability" to access or download the app, though individual TikTok users would not be punished. (77 comments)       Top News Pulling the plug Walt Disney (NYSE:DIS) is scrapping a near-$1B office campus it planned to build in Florida, as well as related plans to relocate some 2,000 of its California workers to the offices, citing "changing business conditions." Reading between those lines, though, it's part of the ongoing feud with Florida Gov. Ron DeSantis over what Disney has called "targeted retaliation" against the company through crackdowns on its special taxing district. The planned Lake Nona Town Center was set to bring more than 2,000 jobs to the Orlando region. Most of them complained harshly about the planned move, set up in 2021 amid what Disney Parks chief Josh D'Amaro called Florida's "business-friendly climate". Now D'Amaro says business conditions are changing, and "I hope we're able to" continue plans for $17B in construction at Orlando's Disney World. But he's now looking at moving some 200 employees that already relocated back to California. (701 comments)       U.S. Indices Dow -0.3% to 33,427. S&P 500 +1.7% to 4,192. Nasdaq +3% to 12,658. Russell 2000 +1.9% to 1,774. CBOE Volatility Index -1.3% to 16.81. S&P 500 Sectors Consumer Staples -1.7%. Utilities -4.4%. Financials +2.2%. Telecom +3.1%. Healthcare -0.7%. Industrials +1.2%. Information Technology +4.2%. Materials +0.7%. Energy +0.9%. Consumer Discretionary +2.6%. Real Estate -2.4%. World Indices London flat at 7,757. France +1% to 7,492. Germany +2.3% to 16,275. Japan +4.8% to 30,808. China +0.3% to 3,284. Hong Kong -0.9% to 19,451. India -0.5% to 61,730. Commodities and Bonds Crude Oil WTI +2.3% to $71.67/bbl. Gold -2% to $1,979.9/oz. Natural Gas +14.4% to 2.593. Ten-Year Bond Yield -0.2 bps to 3.691. Forex and Cryptos EUR/USD -0.38%. USD/JPY +1.63%. GBP/USD -0.09%. Bitcoin +0.3%. Litecoin +13.7%. Ethereum +0.9%. XRP +9.4%. Top S&P 500 Gainers Comerica (CMA) +20%. Zions Bancorporation, National Association (ZION) +19%. Western Digital (WDC) +16%. Capital One Financial (COF) +13%. Catalent (CTLT) +13%. Top S&P 500 Losers First Solar (FSLR) -12%. V.F. Corporation (VFC) -10%. PerkinElmer (PKI) -10%. Insulet (PODD) -9%. ONEOK. (OKE) -8%. Where will the markets be headed next week? Current trends and ideas? Add your thoughts to the comments section. Seeking Alpha's Wall Street Breakfast Podcast Seeking Alpha's Wall Street Breakfast podcast brings you all the news you need to know for your market day. Released by 8:00 AM ET each morning, it is a quick listen that you can put on as you get ready to start your working day.
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