Stocks are facing a losing streak, with each of the three major indexes on track to have their second consecutive negative month, a feat not seen since September 2022. The tech-heavy Nasdaq is down 5.9% in September, heading towards its worst month since December 2022. The S&P 500 is trading lower by 4.6%, set for its worst month since December 2022, and the Dow is down roughly 3%, on pace for its worst month since May. In the midst of this, Grantham, Mayo, Van Otterloo, an investment management firm, warns of higher inflationary pressures in the future and the need for higher real interest rates to control inflation. They highlight the impact of these higher rates on expensive and leveraged assets, suggesting that investors should prepare for a recession not by reducing risk, but by strategically owning risk where they are well-compensated for it.
In another update, some notable stocks are making headlines after hours. Vail Resorts, a ski resort chain, saw its shares slide 1.8% following a disappointing quarterly report. Nike, the athletic retailer, experienced a 1.8% rise in its shares after posting better-than-expected earnings for the first quarter. Conversely, cybersecurity company Blackberry saw its shares increase by 1.5% in after-hours trading following a smaller-than-expected loss per share in the second quarter. Despite this, its revenue fell short of analysts’ estimates.
With stocks experiencing a downward trend, investors are facing concerns about inflationary pressures and the impact of higher real interest rates on asset values. While individual stocks like Vail Resorts and Nike have had mixed performances in the latest quarterly reports, the broader market is at risk of recording its second consecutive negative month, signaling potential challenges ahead. Blackberry’s performance in after-hours trading offers a glimmer of hope, but the overall sentiment remains cautious.