The S&P 500 Index had its best two-day percentage win since Covid lows

A blowout start to a new quarter and month quickly turned sour this week. U.S. Treasury yields retreated from their highest levels in more than a decade, with the Dow Jones Industrial Average (DJI) reclaiming the psychologically significant 30,000 level, as the S&P 500 Index (SPX) turned in its best two-day percentage win since March 2020. That feverish rally came to an end after Wednesday’s volatile session, on the heels of an upbeat ISM services index and private payrolls data for September. Jobless claims that came above expectations pushed the Dow back below 30,000 later in the week, while the Cboe Volatility Index (VIX) snapped its four-day losing streak and reclaimed the 30 region. Friday’s jobs report and rising bond yields solidified pessimism, though the early week rally was big enough to put the major indexes on track for their first weekly win in four.

Under Analysts’ Judging Gaze

Analysts took aim at several stocks this week. Morgan Stanley praised Box (BOX) on its “strong large deal momentum,” while MoffettNathanson was lacking confidence in Roblox’s (RBLX) Metaverse aspirations. UBS said it’s time to buy the dip on Domino’s Pizza (DPZ), and Bernstein noted Airbnb (ABNB) may become the largest travel platform over the next five years. Meanwhile, another analyst turned bearish on Lyft (LYFT), and Splunk (SPLK) was downgraded amid a lawsuit. On a more positive note, Goldman Sachs sees plenty of upside potential in Take-Two Interactive (TTWO).

The bank sector didn’t escape judgement, either. Both Morgan Stanley (MS) and Goldman Sachs (GS) received bear notes, though the latter is historically among the best stocks to own in October. Bank of New York Mellon (BK) earned an upgrade to “buy” before earnings, however.

Deal or No Deal

Arguably one of the biggest headlines this week was Tesla (TSLA) CEO Elon Musk’s revival of his original Twitter (TWTR) buyout bid. Speaking of big acquisitions, South Korea-based Naver bought Poshmark (POSH) for $1.2 billion, Viasat (VSAT) sold its Link 16 tactical data business, and Myovant Sciences (MYOV) rejected Sumitomo Pharma’s takeover offer.

Rumors are also floating that sports betting name DraftKings (DKNG) might be nearing a deal with Walt Disney’s (DIS) ESPN. Plus, Inhibrx’s (INBX) rare lung disease treatment could see fast Food & Drug Administration (FDA) approval, and Norwegian Cruise Line (NCLH) tossed Covid protocols overboard. Elsewhere, Rivian Automotive (RIVN) boasted strong electric vehicle (EV) production, and Peloton (PTON) announced a fresh round of layoffs.

Inflation Data, Fed Minutes Ahead

Next week will be packed full of inflation readings, including the producer price index (PPI) and the consumer price index (CPI), as well as the Federal Reserve’s meeting minutes. Some big names will be trickling into the earnings confessional to boot, with Delta Air Lines (DAL), JPMorgan Chase (JPM), PepsiCo (PEP), and Walgreens Boots Alliance (WBA) among them. Before then, here’s what to expect of gold’s multi-month selloff, and why unwinding short-term bearishness could support stocks.

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