Modest Mood and Price Declines 🙃 | News Sentiment Roundup 9/6-9/10
Stock market news sentiment falls slightly to match decreases in the price of major indexes. We dive into sentiment for American Express, Boeing, Raytheon, and Amgen.
Hello again y’all, welcome back to another weekly review of stock market sentiment. I am your host Ramsey Shaffer (@ramsey_stocks on Twitter), thank you for being here. Subscribe below to stay up to date on all stock market news and sentiment. If you like what you see, tell a friend! Reply or comment with any thoughts or questions. 🤠
This past week we analyzed another 1,852 stock market news articles from across the internet and summarized the results of our analysis into this 5-minute report to help you gauge the aggregate mood about stocks and the market overall. A breakdown of how this report is written:
This Week’s News Sentiment
Most Mentioned Tickers
Best and Worst Ticker Sentiment
Market Mood Outlook
1. This Week’s News Sentiment 📰
The keyword for this week’s stock market and news is unchanged. In the first full week of September 2021, stock market news coverage remained very much the same in its mood, if not slightly less bullish than last week in terms of sentiment expressed. On average, news articles published about the market this week recorded a 0.35 sentiment score (on a scale from -1.0 to +1.0, this means that roughly one-third of sentences this week were highly optimistic). The average article also recorded a 0.53 time-sense score, signaling that the majority of sentences written about the market this week were future-tense in their sentiment expression. Overall, the market mood is showing no noticeable signs of slowing down in the short term. Here’s a look at the major news events driving the conversation sentiment:
📈 Stocks: The S&P 500, DOW and Nasdaq all posted small declines throughout the week (<2% each), and the Russell 2000 small-cap index posted another weekly decrease, extending its run of recent underperformance versus its large-cap peers.1 U.S. large-cap growth stocks outperformed value stocks by a substantial margin for the fourth week in a row. The recent results have moved the growth style back into the performance lead over value year to date.
₿ Cryptos: The global cryptocurrency market capitalization fell slightly this week by 8% but remains over the $2-trillion dollar hump. The market cap dip was driven in part by larger drops from the world’s biggest crypto’s, including a 12% drop from Bitcoin ($BTC), a 17% drop from Ethereum ($ETH), and a 15% drop from Cardano ($ADA). Outside of the large-cap crypto’s, smaller alt-coins finished the week with slight price increases overall.
🦅 Economy: New filings for federal unemployment benefits dropped to a pandemic-era low, with 310,000 claims submitted in the latest weekly count. That’s down from the previous week’s 345,000 figure and the lowest since March 2020. However, the government reported on Wednesday that U.S. employers had a record 10.9 million job openings in the latest monthly count, exceeding economists’ expectations. Inflation still remains a hot-button topic of conversation.
2. Most Mentioned Tickers 📊
Each week we analyze the number of headlines written about each stock and cryptocurrency. The most mentioned tickers in this week’s news and the tickers with the biggest volume increase compared to last week are shown below:
📦 Amazon Inc. ($AMZN): Amazon was mentioned more than any other stock in this past week’s news coverage on momentum from multiple key events, including the company’s announcement that it plans to cover 100% of college tuition (+ books and fees) for its 750,000 U.S. hourly employees starting in January — this statement came Thursday, less than a month after retail rivals Target and Walmart announced similar education benefits packages. Other big news from Amazon this week included rumblings that the company’s streaming service is the likely front-runner for the NFL’s multi-year $2.5 billion-dollar “Sunday Ticket” deal, appearing to be the more viable option than competitors like NBCUniversal’s Peacock. The deal would be a groundbreaking event in the global transition from cable to streaming TV services, as Sunday Ticket has been owned by DirecTV for the past 27 years. As if these two announcements weren’t big enough for $AMZN, the company published this blog post on Wednesday stating its plans to debut the “JustWalk Out” checkout-less purchasing technology from its Amazon Go stores at multiple Whole Foods locations throughout the United States. Despite all the big headlines, $AMZN stock finished the week relatively flat around $3,469 per share, up almost 12% from its price this time last year.
“Amazon to Cover 100% of College Tuition for U.S. Hourly Employees” | CNBC
🏃♂️ Marathon Digital Holdings Inc. ($MARA): The ticker with the biggest increase in news headlines this week compared to last week was $MARA after dropping 18.5% to $35.74 per share throughout the trading period. Marathon’s primary business lies in its Bitcoin mining operations and as a result, its stock price (and conversation) is highly correlated with the price of Bitcoin (which also fell more than 11% on the week). A penny stock through half of 2020, $MARA posted over 400% growth at the start of 2021 before shedding more than half its value by mid-May. Along the way, trading in MARA stock was even halted by the U.S. Securities and Exchange Commission (SEC). While the dip in stock price this week is not reassuring in the short-term, many analysts suggest that Marathon’s value rests in its long-term potential (it’s not a sprint). Other tickers with large increases in mentions this week compared to last week include online used car seller Copart Inc. ($CPRT), United Airlines ($UAL), Chinese ag-tech company Pinduoduo Inc. ($PDD), and fellow Bitcoin mining company Riot Blockchain ($RIOT).
“Despite Its Risks, Marathon Digital Stock Is Worth Taking a Chance On" | InvestorPlace
3. Sentiment Winners and Losers 👍👎
Each week we summarize the most extreme sentiment scores in the news for each ticker to help you decide where to focus your attention. Here’s a look at which tickers scored the highest (and lowest) in terms of optimism, pessimism, speculation, and reaction expressed in this past week’s news:
Sentiment: Most Optimistic😀 and Pessimistic😒 Tickers
💳 American Express Company ($AXP): This week’s most optimistic individual stock in news coverage was American Express (optimism score: 97.4%). Despite the fact that its stock fell slightly in share price on the week (-1.26%) to $158.72, it’s still up nearly 50% in value over the past year. With the dip in price, $AXP news coverage this week centered on its low price-to-earnings ratio (18.03x) lower price-to-book ratio (4.12x) as many analysts now say the stock is undervalued, especially compared to attention-getting competitors like Square ($SQ) and Paypal ($PYPL). To add fodder to the fire, word broke this week that AmEx is now the third-largest holding of Warren Buffett’s Berkshire Hathaway — a healthy signal that the stock warrants consideration as a longer-term value investment. Other analysts cite the added momentum of the fast-growing $79.3 billion digital payments industry as a reason to watch American Express; among its younger, less established industry peers, $AXP has shown to be one of the safest, most profitable, and most efficient stocks. Other highly optimistic tickers in news this week include AmEx’s industry rivals Paypal Inc. ($PYPL) and Goldman Sachs ($GS), the Invesco QQQ Trust ($QQQ), and biopharma giant Vertex Pharmaceuticals Inc. ($VRTX).
“Raise Your Bets on American Express” | Seeking Alpha.
✈️ Boeing Company ($BA): This week’s most pessimistic ticker in news coverage was Boeing (pessimism score: 24.9%). $BA stock fell 4.18% on the week to $210.30 as the feathers of the US commercial aviation industry continue to be ruffled by softening consumer demand — the US Global Jets ETF ($JETS) which tracks the industry’s indexed performance has fallen 3.1% on the week and more than 22% over the past six months. When fewer people choose to take flights, airline companies lose revenue and cut costs, and therefore buy fewer planes from the likes of Boeing and Airbus. This is precisely the predicament Boeing finds itself in, as long-time customer Ryanair walked away from a $10-billion purchase deal with Boeing last week and became the lastest of a slew of airliners to halt purchasing of new planes over the past year. In fact, demand has gotten so low for new planes that analysts now see “no reason to expect” any new plane deliveries from Boeing during the remainder of Q3. The lack of production has led analysts like UBS’s Myles Walton to cut their $BA price targets on reduced revenue estimates for the company, compounding the current news negativity even further. Outside of Boeing, upstream industry peers Delta Airlines ($DAL) and American Airlines ($AAL) were the 2nd and 3rd most pessimistic tickers in this past week’s news coverage. This week’s most pessimistic $BA article:
“Boeing Stock Falls After UBS Analyst Cuts Price Target, But Says Estimates Have "‘Bottomed Out’” | MarketWatch
Time-Sense: Most Speculative🤔⏩ and Reactive😮⏮️ Tickers
🚀 Raytheon Technologies Corp. ($RTX): The stock with the most speculative (ie. future-tense) sentiment measured in the news coverage this week was Raytheon (speculation score: 79.7%). $RTX stock finished the period little changed as its stock price slipped 1.64% to $83.00 even per share (the stock is still up nearly 34% over the past year). The multinational aerospace and defense conglomerate has received more than its fair share of speculative news conversation in recent weeks driven in part by the stock’s significant volatility. Some analysts say that the stock’s dip this week is well warranted, considering its current price-to-earnings ratio of 59.8x makes it one of the most expensive stocks in its peer group. Other analysts suggest the market is merely pricing in the company’s future potential as a churn and burn investment. If there’s one thing for sure about $RTX, its that uncertainty will remain prevalent in the stock’s news coverage into the near future, as its position relative to the growing commercial rocket industry and the growing international defense tension in the Middle East make it difficult to peg its price trajectory. That said, both aerospace and defense applications will continue to grow in importance and value, so one could expect Raytheon to be a relatively sound investment for the long term. Other highly speculative tickers in this week’s news include Dollar General Corp. ($DG), NeoGenomics Inc. ($NEO), and Kroger Co. ($KR).
“Should You Investigate Raytheon Technologies Stock at $84.10?” | Simply Wall St.
💊 Amgen Inc. ($AMGN): The stock with the most reactive (ie. past-tense) sentiment measured in the news coverage this week was PVH Corp. (reaction score: 53.6%). $AMGN stock fell 5.32% this week to $213.75 per share on Morgan Stanley’s downgrade of the stock’s rating and lowering of its price target. Morgan Stanley also downgraded $AMGN’s biopharma competitor Merck & Co. ($MRK) this week, saying investors should “hunt for upside elsewhere”. Amgen has been the brunt of negative news in recent weeks as its price has trended downwards, so the downgrade does not come as much of a surprise. The silver lining here is that analysts say $AMGN’s stock is now firmly in value territory, with some even arguing that the stock is trading at more than 20% below its underlying value. While Amgen is also a volatility stock — partially driven by its experimental nature — the company did release data from its tezepelumab asthma treatment trials (a partnership with AstraZeneca). An Amgen company spokesperson stated that the drug could realistically generate $2B in annual revenue for the company within the next decade — I suppose time will tell. Other tickers with highly reactive sentiment expressed in this week’s news include Chinese tech giant Baidu Inc. ($BIDU), Backup-power manufacturer Generac Inc. ($GNRC), and Johnson & Johnson ($JNJ). This week’s most reactive $AMGN article:
“Merck and Amgen Fall on Morgan Stanley Downgrades” | TheStreet
Biggest Mood Swings and Changes 🎭🔀
Each week we compare the sentiment of each ticker to its sentiment from the previous week. Presented below are the tickers that saw the biggest change in each of our four sentiment metrics this week compared to last.
💰 USD Coin ($USDC) saw the largest increase in optimism expressed this week compared to last week as the US dollar stablecoin has been the recipient of an array of significant news events, including its achievement of reaching the 2-billion unit circulation mark on Solana. The crypto also recently announced that it is now backed by cash and short-term US Treasuries, a significant move forward for the efficacy of the crypto.
📮 United Parcel Service, Inc. ($UPS) recorded the largest increase in pessimism expressed this week after falling 2% to $193.26 per share on the week. UPS stock has now fallen almost 10% on the month. Despite the tumble, UPS is expected to rebound in stock price with a “record peak holiday season” this year, and could rebound in news sentiment when it finalized its potential acquisition of gig delivery platform, Roadie.
💲 Dollar General Corp. ($DG) posted the biggest increase in speculative language expressed this week compared to last. $DG stock price has fallen 2.74% over the past week and nearly 8% over the past month despite a Q2 earnings beat two weeks ago. This — coupled with comments from its CEO about potential expansion into health food — has left analysts to wonder about the company’s short term future.
💱 Paypal Inc. ($PYPL) received the biggest increase in reactive language expressed this week compared to last after announcing a $2.7B acquisition of Japanese buy-now-pay-later (BNPL) platform, Paidy. The move highlights Paypals explosive growth within the BNPL landscape, and bodes well for the company’s global payment processing strategy.
4. Market Mood Outlook 🌡️🔭
After another week of comparatively bullish sentiment to kick off the month of September, the market’s mood this week felt little changed; perhaps slightly lower in sentiment. For the most part, the major stock and cryptocurrency indexes declined modestly this week and inflation remains top of mind. Looking ahead into this upcoming week, a government report scheduled to be released on Tuesday will show whether June and July’s spike in consumer prices carried over into August. The Consumer Price Index released last month showed that prices surged 5.4% for the 12-month period that ended in July. While high, that figure was in line with expectations and lower than June’s rise on a seasonally adjusted basis. We will be watching the effects of inflation on next week’s conversation for any signs of switched momentum towards increased pessimism in the future. That’s all for today’s report; good luck this week everyone, and thanks for reading. 🙏
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