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Monday, December 5, 2022

What Happened This Week: Index Swings, Grocery Giants And Short Records

 

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If there was an over-arching theme that encapsulated the events related to the markets this week, it was there was no middle of the road. Examples of extremes – as in, the biggest, quickest, shortest – were in vogue.

So let’s jump in.

Market Swings Described By Superlatives

It was another week of big swings on Wall Street. The big day, of course, was Thursday, when the major indexes put in one of their best days in quite a while.

Looking at the stats, Thursday finished with the S&P 500 posting its fifth largest intraday reversal in its history, according to SentimenTrader, while over on the NASDAQ , the one-day upswing was the fourth largest.

The Dow, which gained 2.8% on Thursday, marked its biggest percentage increase so far in 2022. But let’s not get carried away. It is still down about 18% so far this year.

The moves were all data driven, led by a better-than-expected Consumer Price Index reading.

But then came Friday, and all those gains evaporated. And again, it was all data driven, as worry over the impact of inflation ruled the sentiment.

The Dow closed the day down 1.34%, the S&P 500 lost 2.37%, while the NASDAQ shed 3.08%. And, unfortunately, there was nothing superlative there to take away.

Grocery Behemoth In the Making

A $24.6-billion deal that will see the two largest stand-alone grocery store chains in the U.S. merge was announced yesterday.

The deal, which will see Kroger (NYSE:KR) buy up its smaller rival Albertsons Companies (NYSE:ACI), was hatched in an attempt to take on Walmart (NYSE:WMT). There is nothing mom-and-pop about this grocery-store clash in the making.

And there was nothing middle of the road with this deal. The merger could have an impact on how millions of Americans fill their fridges for years to come. It also has the potential of creating the largest private employer in the U.S.

The deal would face a lot of regulatory scrutiny before being finalized in 2024, however.

According to the terms of the deal that were announced, Kroger will pay $34.10 per share to buy Albertsons, which represents about a 30% premium above the grocer’s average share price in the last month.

Shares of both Kroger and Albertsons were down yesterday. Kroger saw its stock price drop 7.3% to close at $43.16, while Albertsons shares slipped 8.45% to end the day at $26.21.

What Happened This Week: Index Swings, Grocery Giants And Short RecordsKroger Weekly Chart

Source: Investing.com

What Happened This Week: Index Swings, Grocery Giants And Short RecordsAlbertsons Weekly Chart

Source: Investing.com

Speaking Of Records

In the U.K., the fact that Chancellor of the Exchequer Kwasi Kwarteng was fired this week perhaps did not come as a surprise. But the fact that he was not the shortest serving head of the nation’s Treasury was.

Kwarteng was, in fact, the second-shortest serving head of the Treasury when he was sidelined yesterday. Of course, this fact, begged the questions: Who was the shortest serving finance minister in the U.K.? And what did he/she do to earn that honor?

Well, as it turns out, there is only one thing that was worse than Kwarteng’s disastrous mini-budget in September that sent the pound crashing and forced the Bank of England to intervene to prevent bonds from crashing and pension funds from being gutted – and that is death.

The shortest serving U.K. finance minister was Iain Macleod in 1970. He had the job for 30 days when he died. Kwarteng had the job for 37 days.

Kwarteng’s mini-budget, of course, outlined the general thrust of the new government led by Prime Minister Liz Truss, which included huge tax cuts for some and aimed to shock the U.K. economy and get it back on the path toward growth. Ah, so much for intentions. The shock only triggered market chaos.

Former foreign minister Jeremy Hunt was tapped to replace Kwarteng. Anyone taking bets on what happens next?

Yesterday, in reaction to the firing, ah, I mean “resignation,” the British pound faded against the U.S. dollar, moving 1.37% lower.

What Happened This Week: Index Swings, Grocery Giants And Short RecordsGBP/USD Weekly Chart

Source: Investing.com

Top Winners And Losers Of The Week

Again, for all those out there who are keeping score, here are the top gainers of the past week:

On the S&P 500

Moderna (NASDAQ:MRNA): +12.3%
Amgen (NASDAQ:AMGN): +9.74%
Viatris Inc (NASDAQ:VTRS): +9.27%
Walgreens Boots Alliance Inc (NASDAQ:WBA): +8.91%
Kraft Heinz (NASDAQ:KHC): +8.71%

On the NASDAQ Composite

Pineapple Holdings Inc (NASDAQ:PEGY): +50.79%
Qumu Corp (NASDAQ:QUMU): +40.63%
Compugen (NASDAQ:CGEN): +31.83%
Green Giant Inc (NASDAQ:GGE): +28.22%
Stabilis Solutions Inc (NASDAQ:SLNG): +23.37%

And the biggest losers:

On the S&P 500

Wynn Resorts (NASDAQ:WYNN): -22.90%
First Republic Bank (NYSE:FRC): -17.85%
Las Vegas Sands (NYSE:LVS): -17.13%
Etsy (NASDAQ:ETSY): -16:33%
KLA Corporation (NASDAQ:KLAC): -16.06%

On the NASDAQ Composite

GSI Technology (NASDAQ:GSIT): -31.56%
NeuroMetrix Inc (NASDAQ:NURO): -30.04%
Rigel Pharmceuticals (NASDAQ:RIGL): -28.86%
SunPower (NASDAQ:SPWR): -23.78%
Mullen Automotive Inc (NASDAQ:MULN): -23.72%

Source: Investing.com

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