Amid market turmoil; compelling earnings coming
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What market trends are investors focusing on this week?
Brian Stewart, welcome back to Wall Street Breakfast. Great to be here on a Friday with you.
Thanks. Great to be here.
Yesterday, we had some discussion talking about markets going lower. What are you seeing out of the markets? What are you most focused on at week's end and looking ahead to next week?
So as you mentioned, the markets were down pretty sharply on Monday and continued to drift lower later in the week. So it was definitely a down week for the market. When we're looking at it, I think it's important to kind of pick out outliers and stocks that maybe buck the trend a little bit.
Why are oil stocks outperforming in a down market?
If you go to the kind of winners and losers leaderboards for the week, there's just a lot of red and a lot of stocks that are down sort of similar amounts. It's kind of hard to pick out. ones to focus on. So if we're looking for some green and a big wash of red, you can look at some big oil players. So ConocoPhillips and ExxonMobil were both up over the past week. ConocoPhillips is up 10%, ExxonMobil up 4%. They were both up as the markets fell on Monday. I think this is just sort of a seeking shelter kind of play. Overall, the stocks have been tracking oil prices over the past year and are actually down over the course of a year, underperforming the major averages. But now both stocks are beating the S&P 500 for year to date. So
What is causing the decline in weight-loss drug stocks?
they've kind of jumped past the S&P 500. So I think that's just a sign that people are looking for safe havens in an overall dangerous market. And then we look at the other side, some of the unexpected leaders on the downside so far this week have been the weight loss drug makers. So Novo Nordisk is down 18% over the past week and Eli Lilly is down 12%. I think this is sort of a a commentary on the overall weight loss market. I think there's a fear of saturation. There was a survey that came out recently that said one out of five Americans have tried GLP-1. So we're sort of getting to the point where people who want it are already using it. And so there's a question of where the next growth is coming from.
And then in terms of what's in the pipeline, there's been some underwhelming trial results lately. So there's not something on the horizon, the next great weight loss drug from these companies meant to take it over. So I think in the sort of selling spirit that gripped the markets in general earlier this week, I think people in those stocks took the opportunity to sort of take profits, dump their position and look for other opportunities elsewhere.
What were those trials and
So Novo Nordisk, I don't know the drug off the top of my head, but it hit its primary endpoint, but it was less than people had expected in terms of the efficacy for the drug. This is sort of the next generation of their weight loss drug program. This came after another disappointing trial on the same drug earlier. So there's just sort of a feeling that while this drug is performing competently, it's not a game changer on the market. So it's just going to be another kind of weight loss drug on a market. And so it might have some benefit for some users, but isn't going to open up the market the way people had once hoped.
How is recession fear impacting consumer stocks like Tesla and Starbucks?
Along with the losses from the weight loss drug makers, we also saw some big losses from the big discount retailers. Tesla, nobody paying attention to the markets is ignoring that fact. Tesla has been down pretty consistently. Starbucks has been down pretty consistently. What would you, is there a theme there?
So all those have the similarity that they're consumer focused stocks. So I do think that worry of a recession is just sort of eroding general sentiment for consumer stocks. Tesla obviously has been a major story, will remain a major story as we go forward. Elon Musk in his Doge role has really Put a spotlight on the company in a way that's become a difficult brand management situation, to say the least, for the rest of the people at Tesla while he does his trip to Washington, his step away from Tesla leadership to be part of the Trump administration. So people are starting to get antsy, bulls in Tesla, people who have been kind of by the dip people so far this year.
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Chapters
6 chapters
1
What market trends are investors focusing on this week?
0:10–0:46
2
Why are oil stocks outperforming in a down market?
0:46–1:35
3
What is causing the decline in weight-loss drug stocks?
1:35–3:28
4
How is recession fear impacting consumer stocks like Tesla and Starbucks?
3:28–5:27
5
What challenges is Tesla facing with its current leadership?
5:27–6:49
6
What internal changes are happening at Starbucks?
6:49–13:39