Stocks struggled for direction Monday, though the main indexes notched definitive gains for both the month and quarter. A mid-afternoon speech from Fed Chair Jerome Powell failed to lift sentiment, with all eyes now firmly set on the September jobs report, due at the end of the week.
During an appearance in Nashville, Powell said that the Fed sees its dual policy mandate – inflation and employment – as roughly balanced and feels the economy is in good shape.
He added that the central bank will continue to lower interest rates, but the pace and magnitude of those cuts will depend on the current economic data. For its November meeting, the Fed will take in the totality of the economic data – including the two jobs reports that will be released ahead of the event.
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The next job report hits ahead of this Friday's open. Barclays economists think it will show that job growth accelerated a bit last month. "We expect a 150,000 increase in nonfarm payroll employment in September, slightly faster than August's 142,000 gain," the group writes. "On the household side, we look for the unemployment rate to remain at 4.2%."
Ahead of the payrolls data, futures traders are pricing in a 60% chance the central bank will cut rates by a quarter-percentage point in November, according to CME Group's FedWatch Tool. Odds that it'll be by a half-percentage point are currently at 40%.
Stellantis sinks on profit warning
In single-stock news, Stellantis (STLA) plummeted 12.6% after the automaker lowered its full-year operating margin amid deteriorating "global industry dynamics" and increased competition from China.
Ford Motor (F, -2.0%) and General Motors (GM, -3.5%) also declined on the news.
AT&T sells DirecTV stake
Elsewhere, AT&T (T, +0.5%) said it is selling its 70% stake in DirecTV to private equity firm TPG (TPG, -0.8%) for $7.6 billion. This will allow DirecTV to merge with fellow satellite TV provider Dish Network, which is currently owned by EchoStar (SATS, -11.5%). This news was confirmed in a separate announcement.
CVS jumps on activist investor news
CVS Health (CVS) stock popped after media reports indicated Glenview Capital took a position in the embattled pharmacy chain. The hedge fund met with leadership on Monday and could be pushing for changes, according to The Wall Street Journal.
Also on Monday, the company told employees that it is eliminating roughly 2,900 jobs as part of previously announced cost-cutting initiatives.
The healthcare stock jumped 2.4%, but remains 20% lower for the year to date.
Stocks end September with a win
Thanks to a late-day burst of buying power, the Dow Jones Industrial Average finished the session up 0.04% at 42,330, the S&P 500 was 0.4% higher at 5,762, and the Nasdaq Composite gained 0.4% to 18,189.
All three main benchmarks finished up on the historically tough month and ended Q3 back near record highs.
"While the third quarter was a volatile one, with the early August and the early September selloffs, stocks are ending the quarter with gains," says Emily Bowersock Hill, CEO and founding partner of Bowersock Capital Partners. "We expect the fourth quarter to be quite similar to the third quarter – elevated volatility, but with a strong finish."
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