S&P 500 Extends Winning Streak as Wholesale Inflation Cools

The S&P 500 continued its winning streak for the fourth consecutive day on Thursday, September 12, 2024, as the latest Producer Price Index (PPI) data showed a softening in wholesale inflation. This data could potentially influence the Federal Reserve’s decision on an interest-rate cut during their upcoming meeting.

Market Performance

The S&P 500 rose by 0.8% on Thursday, maintaining its positive momentum from earlier in the week. The Nasdaq also experienced a 1% increase, while the Dow added 0.6%.

Warner Bros. Discovery and Charter Communications

Shares of Warner Bros. Discovery (WBD) led the S&P 500 higher, surging by 10% after the entertainment giant renewed its distribution deal with Charter Communications (CHTR), the largest pay TV provider in the country. The new agreement includes increased fees for carrying certain Warner Bros. Discovery TV channels, while fees for TNT will remain stable despite the network losing its NBA broadcasting rights.

Kroger’s Strong Earnings

Kroger (KR), the largest supermarket chain in the United States, experienced a 7.2% surge in its stock price after reporting better-than-expected adjusted profit for the second quarter. The company’s CEO expressed confidence in Kroger’s position as it works towards completing its acquisition of Albertsons grocery stores, despite federal regulators taking measures to block the deal.

Axon Enterprise’s Positive Outlook

Shares of Axon Enterprise (AXON), a manufacturer of law enforcement equipment such as Tasers and body cameras, gained 6.3% after JMP Securities increased its price target on the stock. Analysts highlighted the growth potential of Axon’s Taser 10 and Body Camera 4, as well as its software tools. Axon’s Draft One software, which utilizes artificial intelligence (AI) technology to generate initial incident reports using audio recorded by officers’ body cameras, has also garnered attention.

Moderna’s Research and Development Cutbacks

Moderna (MRNA) experienced the largest decline among S&P 500 constituents, with its shares plunging by 12%. The biotechnology firm announced plans to reduce research and development spending, leading to the suspension or termination of certain product development. Moderna will focus on later-stage trials as part of its cost-cutting measures.

Enphase Energy’s Slip

Shares of solar technology company Enphase Energy (ENPH) slipped by 4.3%. This decline partially offset the gains made after Tuesday’s presidential debate, where Vice President Kamala Harris’ performance was seen as favorable for green energy policies, resulting in a rally for industry stocks.

Wells Fargo Faces Regulatory Action

The Office of the Comptroller of the Currency (OCC), a federal agency overseeing the banking industry, issued an enforcement action order against Wells Fargo (WFC) on Thursday. The regulatory action is related to the bank’s anti-money laundering (AML) and financial crimes risk management practices. As a result, Wells Fargo shares dropped by 4%.

Overall, the S&P 500’s winning streak continued as the latest PPI data indicated a cooling in wholesale inflation. The market responded positively to strong earnings reports from Kroger and renewed distribution deals for Warner Bros. Discovery. However, Moderna’s announcement of research and development cutbacks led to a significant decline in its stock price. Investors will continue to monitor these developments as they anticipate the Federal Reserve’s decision on interest rates.