The week in 60 seconds
What happened, and nothing elseAn oil shock reached the official inflation data, and the Federal Reserve's next move flipped from a cut to a hike.
- The S&P 500 fell 2.01 percent while the equal weight version fell 3.13 percent, the third straight week the average stock lost to the index.
- August producer prices rose 0.4 percent as diesel fuel jumped 24.1 percent, putting the twelve month rate at 5.4 percent.
- Futures moved to roughly a 73 percent chance of a rate increase on September 16, at a meeting widely expected to deliver a cut.
- The 10 year Treasury yield rose 18 basis points to 4.94 percent and software fell 5.38 percent on the same arithmetic.
- Signet Jewelers and Academy Sports raised earnings guidance while leaving sales guidance untouched, and both trade near eight times those raised numbers.
You have the headline. The brief adds the market setup behind it, a line on each of the five, and what matters next. Continue to the 5-minute brief →
The 5-minute brief
~7 minMarket read
The S&P 500 fell 2.01 percent from the September 3 close to the September 10 close and the average stock did worse, with the equal weight version of the same index down 3.13 percent. Nothing broke in credit and nothing broke in the economy: August payrolls came in at 162,000 on September 4, the strongest print since March and the first positive month in five. What changed was the price of money. On September 10 the August producer price report put final demand up 0.4 percent, with more than three quarters of that traced to energy and more than a third of the goods increase traced to diesel fuel, which rose 24.1 percent in a single month. The twelve month rate is now 5.4 percent. By the close, futures were pricing roughly a 73 percent chance that the Federal Reserve raises rates on September 16, a meeting the market spent the summer expecting to deliver a cut. The 10 year Treasury yield rose 18 basis points to 4.94 percent and the five year rose 22, and everything whose value depends on cash flows a decade away was marked down. Software fell 5.38 percent. Against that, two specialty retailers filed results on the same morning, raised their full year earnings forecasts, left their sales forecasts completely alone, and were paid 19 and 24 percent for it at roughly eight times earnings. Both facts are the same fact. This was the week the market paid for profit in hand and stopped paying for profit promised.
Market Risk Score: 73 / 100 (High).
The risk score grades overall market conditions from 0 (calm) to 100 (high risk). It sets how cautious the week's read is. It is not a signal to buy or sell anything.
The five
- 01SIG, view score cardSignet Jewelers LimitedEarnings Forecast RaisedWeekly moveup 19.1 percent
It is the largest filed guidance raise in the issue and the cheapest price attached to one.
- 02ASO, view score cardAcademy Sports and Outdoors, Inc.Margin, Not DemandWeekly moveup 24.1 percent
It is the cleanest illustration of what this week rewarded, and the only pick the market kept paying for on the second day.
- 03DOCN, view score cardDigitalOcean Holdings, Inc.Growth Outlook RaisedWeekly moveup 19.8 percent
It is the one pick here that rose in the half of the market this week was built to punish, and the reason is a change in what the business sells.
- 04NET, view score cardCloudflare, Inc.Fifty Percent PromiseWeekly moveup 9.4 percent
The relative move is the most striking number in this issue.
- 05HCA, view score cardHCA Healthcare, Inc.Nothing BrokeWeekly moveup 2.9 percent
It is here because of what it is not.
Weekly move is each stock's movement during the window this issue analyzes (Week of September 3 to September 10, 2026), which closes before the issue publishes. It is not a return earned after publication. How each figure is measured →
What matters next
- Sep 11. August consumer price index, 8:30am Eastern
- Sep 16. Federal Reserve decision
- Sep 17. Whether Brent crude is still settling at or above 100 dollars a barrel
You have the briefing.
Full research adds:
- the evidence behind the market read, and what would break it
- the complete case and the bear case on all five
- the next dated event for each name, and what result confirms or ends the thesis
- the primary sources every claim rests on
- the calls this issue is willing to be graded on next week
Full research
~23 minWeek ahead: the full analysis
I expect Energy to stop leading. Over the week from the September 11 close to the September 18 close, through the Federal Reserve decision on September 16, I expect the Energy sector to trail the S&P 500 rather than beat it, because the thing that broke this week was not the oil price but the willingness to pay for it. Settled Brent rose 5.84 percent over the commodity window, from 95.63 dollars on September 2 to 101.21 on September 9, while the Energy sector fund rose 0.48 percent. That is a 5.4 point gap between the commodity and the companies that sell it. On September 10, with crude rising again, the Energy fund fell 0.58 percent, and it did that sitting at 98.1 percent of its own 52 week high. A sector that will not rise on its own good news has run out of marginal buyers. I am putting this at 65 percent and I want to be direct about why it is not higher: I made a version of this call last week, at 70 percent, and it was falsified. What keeps me here is my own measured record. A sector I label Leading has gone on to beat the market in 1 of 8 non flat weekly readings, with an average edge of negative 2.13 points, which makes betting on the leader to keep leading the single worst call I make. So I am making the call again with a tighter kill condition rather than a looser one. Last week the trigger was Energy beating the index by more than 2.0 points. This week it is 1.0. Loosening a threshold after a miss is how a forecaster quietly stops being gradeable. One last thing you are owed before the verdict lands: my ledger measures how far a kill condition sits from where the market already is, in units of that spread's own volatility, and mine sits 0.236 of one standard deviation away over five sessions. That is inside the noise. Ordinary random movement can settle it either way, so whatever next Friday's verdict says, treat it as a weak read on whether I am right about the mechanism. I am publishing at that distance on purpose, because the alternative is a comfortable threshold the market cannot reach, and a call nobody can lose is not a call.
What would prove me wrong. The Energy sector fund XLE beats the S&P 500 fund SPY by more than 1.0 percentage point from the September 11 close to the September 18 close, measured as the percentage change in XLE minus the percentage change in SPY. I put the odds of this view holding at 65%.
- Sep 11. August consumer price index, 8:30am Eastern
It lands the same morning as this issue, so I am writing without it. Producer prices already showed energy up 4.2 percent and diesel up 24.1 percent. If that has reached the consumer index, the September 16 increase stops being a 73 percent probability and becomes the base case. A cool core reading is the only thing that takes it back off the table. - Sep 16. Federal Reserve decision
The market spent the summer expecting this meeting to deliver a cut and now prices roughly a 73 percent chance of an increase. Three voters already wanted one in July. A hike confirms the repricing. A hold with a hawkish statement is the outcome that hurts the average stock most, because it leaves the question open for another six weeks. - Sep 17. Whether Brent crude is still settling at or above 100 dollars a barrel
The entire chain in this issue starts with crude. If the supply premium unwinds, diesel follows it down, the inflation impulse fades, and the rate increase and the consumer risk both get smaller at once. I put a hold above 100 dollars at 74 percent. - Sep 18. Whether the software group claws back above 105.50, having closed at 101.20
Software fell 5.38 percent this week while semiconductors rose 1.39 percent, and two of this issue's picks sit in the half that fell. A recovery says the discount rate scare was temporary. No recovery says the repricing is structural, and the two cloud names have to earn their gains from the business rather than from the rate. - Sep 18. September quarterly options expiration and index rebalance, effective at the close
Three straight weeks of the average stock losing to the index gets a mechanical test when index funds rebalance. It is the one event in the window that moves prices for reasons that have nothing to do with any company in this issue.
The biggest risk right now. The fuel bill reaches the household before these margin gains reach the profit line, and Signet, Academy Sports and HCA fall together on the same squeezed consumer. Three of these five picks are one bet on the United States household, and I would rather name it than let you find it. August producer prices put energy up 4.2 percent with diesel fuel up 24.1 percent, and a diesel bill is a delivery cost on everything a retailer sells. Academy Sports raised earnings guidance while reporting comparable sales of negative 0.4 percent, and its own chief executive said consumer spending remains pressured, particularly among lower income households. HCA disclosed roughly 22,000 adjusted admissions that shifted from exchange coverage to uninsured. None of that is a forecast, it is what the companies and the government reported this week. And neither retail raise came from selling more: both left sales guidance untouched and took the whole increase from margin, which is the line a cost shock arrives at second. There is no hedge anywhere in these five, because the other two are long duration assets that also fall when the discount rate rises. The retail fund XRT closing below 79.45, more than 5 percent below its September 10 close of 83.63, on or before September 25, 2026. I put it at 25% by September 25, 2026.
Last week I said, and I was wrong
That Energy would give back part of its lead rather than extend it, over the three sessions from the September 4 close to the September 10 close. From the September 4 close to the September 10 close the Energy sector fund rose 1.36 percent while the S&P 500 fund fell 1.60 percent. I had expected the broad index to hold up while the energy bid decayed, and the opposite happened on both halves, so the error is recorded as too bullish. That is the second falsified call in four, one in each direction, so there is no standing lean to correct, only a run of being wrong about energy specifically. Two more ledger entries belong here because they do not flatter me. My skill against a baseline that simply assumes nothing moves is negative 0.667: on the three calls where that baseline could be resolved, it survived all three and I survived one. And Issue No. 10's biggest risk materialised. I said software could hand back its late August re-rating and set the confirming reading at the software fund closing below 103.70 by September 11. It closed at 103.42 on September 2 and has since fallen to 101.20. I put that at 25 percent and it happened, which only counts because the trigger was written down in advance. Not a near miss, and I am not going to dress it up as one. I said I was wrong if Energy beat the index by more than 2.0 percentage points. It beat it by 2.96, so the market cleared my own kill condition by almost a full point, 0.256 of a standard deviation past it. I stated 70 percent and I was wrong.
This week's five
SIG, view score card · Signet Jewelers Limited · Consumer Discretionary / Specialty Retail
- Move before publication
- +19.1%
- Next date
- Sep 11
Signet filed second quarter results before the open on September 9 and raised its full year adjusted earnings guidance to 10.45 to 12.15 dollars a share from 9.20 to 11.00, a 13.1 percent increase at the midpoint. It left its sales guidance completely unchanged at 6.7 to 6.9 billion dollars, so every dollar of the raise came from profitability rather than from expected demand. The stock rose 19.13 percent in a week its own sector fell 3.86 percent, and at 97.71 dollars it is 8.6 times the midpoint of the forecast it had just raised.
The catalyst. On September 9, 2026 Signet Jewelers reported second quarter fiscal 2027 total sales of 1,528.1 million dollars with same store sales up 2.2 percent, GAAP diluted earnings of 1.33 dollars a share against negative 0.22 a year earlier, adjusted diluted earnings of 2.19 dollars against 1.61, and adjusted operating income of 107.2 million dollars against 85.4 million. It raised full year fiscal 2027 adjusted earnings guidance to 10.45 to 12.15 dollars a share from 9.20 to 11.00 and adjusted operating income guidance to 535 to 605 million dollars from 480 to 560 million, while leaving total sales guidance unchanged at 6.7 to 6.9 billion dollars. It extended its Bread Financial credit card agreement through December 2035, expecting 30 to 40 million dollars of non comp revenue and gross margin, and repurchased 87 million dollars of stock in the quarter under a 125 million dollar accelerated programme. The stock rose 23.96 percent on September 9 and fell 4.65 percent on September 10. U.S. Securities and Exchange Commission, September 9, 2026
Why it made the five. It is the largest filed guidance raise in the issue and the cheapest price attached to one. Adjusted earnings came in at 2.19 dollars a share against 1.61 a year earlier and adjusted operating income at 107.2 million dollars against 85.4 million, on same store sales up 2.2 percent. The raise has a named source rather than a vague one: the Bread Financial credit card agreement was extended through December 2035 with a signing bonus and profit sharing. And the catalyst type is the one my own record actually supports. A Guidance Raise has averaged 12.06 percent against the index at one month across eight matured names, the best performing type in this newsletter with a sample bigger than one. The tape agreed for a session: the stock gapped 23.96 percent on September 9 on 6.81 times normal volume.
What to watch next. Sep 11: August consumer price index, 8:30am Eastern Confirms the thesis: A core reading at or below 0.3 percent leaves the discretionary buyer intact and gives the margin story room to play out Breaks it: A hot core print with energy passing through means the jewellery buyer is squeezed before the raised forecast is earned
The case against it. It handed back a fifth of the move the next day. Signet fell 4.65 percent on September 10 on 2.77 times normal volume, which is the market declining to extrapolate a gap it had just paid for. Be careful with the credit card headline too. Secondary reporting described the partnership as worth more than a billion dollars over time; the filing says the company expects 30 to 40 million dollars of non comp revenue and gross margin. I am using the filed number. Then there is what the raise does not include. Sales guidance was left untouched, which means Signet is not telling you it expects to sell more jewellery, only to keep more of what it sells, and a jewellery purchase is the most deferrable thing in this issue if the fuel bill keeps climbing. At about 64 million dollars of trading a day it is also the thinnest name in the five.
Weekly move (before publication): +19.1%
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ASO, view score card · Academy Sports and Outdoors, Inc. · Consumer Discretionary / Specialty Retail
- Move before publication
- +24.1%
- Next date
- Sep 16
Academy Sports filed second quarter results the same morning as Signet and did the same thing: it raised full year adjusted earnings guidance to 6.50 to 6.90 dollars a share from 6.40 to 6.80 while leaving net sales guidance untouched. The engine was gross margin, which reached 40.4 percent against 36.0 percent a year earlier and carried adjusted earnings up 19.1 percent even though comparable sales fell 0.4 percent. The stock rose 24.12 percent, the largest gain in the issue, and unlike Signet it kept going, adding 5.99 percent on September 10.
The catalyst. On September 9, 2026 Academy Sports and Outdoors reported second quarter fiscal 2026 net sales of 1,647.3 million dollars, up 3.0 percent, with comparable sales of negative 0.4 percent, gross margin of 40.4 percent against 36.0 percent a year earlier, GAAP diluted earnings of 2.17 dollars a share against 1.85 and adjusted diluted earnings of 2.31 dollars against 1.94, with ecommerce sales up 12.8 percent and three new stores opened for 327 in total. It raised full year fiscal 2026 adjusted earnings guidance to 6.50 to 6.90 dollars a share from 6.40 to 6.80 and GAAP earnings guidance to 6.05 to 6.45 from 5.95 to 6.35, while leaving net sales guidance unchanged at 6,230 to 6,355 million dollars. It reported a net tariff refund impact of 0.06 dollars a share including reinvestments and 182.1 million dollars of stock repurchased year to date. The stock rose 14.40 percent on September 9 and a further 5.99 percent on September 10. U.S. Securities and Exchange Commission, September 9, 2026
Why it made the five. It is the cleanest illustration of what this week rewarded, and the only pick the market kept paying for on the second day. A company whose same store sales went backwards still grew adjusted earnings 19.1 percent, because it held 440 more basis points of every sales dollar than it did a year ago. In a week when diesel rose 24.1 percent, the market decided a retailer that has already proved it can protect margin is worth more than one that is merely selling more, and it paid 24 percent for the proof. At 54.22 dollars the stock is 8.1 times the midpoint of the forecast it just raised, the cheapest in the issue.
What to watch next. Sep 16: Federal Reserve decision Confirms the thesis: A hold leaves credit where it is and the margin story keeps running Breaks it: A quarter point increase lands directly on the lower income customer the company itself called pressured
The case against it. Measure the raise before you accept the move. Guidance went up ten cents at each end, 1.5 percent at the midpoint, and the stock went up 24.12 percent, so this is a re-rating and not a change in the numbers. It is the same lesson Okta taught in Issue No. 10, and it cost that pick most of its gain. Worse, roughly three fifths of the raise will not repeat: the company reports a net tariff refund impact of 0.06 dollars a share including reinvestments, against a ten cent increase. And the comparable sales figure is the part I keep returning to. Minus 0.4 percent is a customer buying less, and Academy Sports' own chief executive said consumer spending remains pressured, particularly among lower income households. That is the company telling you where the risk is, and I believe it.
Weekly move (before publication): +24.1%
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DOCN, view score card · DigitalOcean Holdings, Inc. · Technology / Cloud Infrastructure
- Move before publication
- +19.8%
- Next date
- Sep 16
DigitalOcean's chief executive and chief financial officer raised the company's full year 2027 growth outlook to more than 50 percent at the Goldman Sachs Communacopia conference on September 8, and said roughly 85 percent of its artificial intelligence revenue now comes from higher margin inference work rather than renting out bare machines. The stock rose 12.64 percent that session and 19.79 percent on the week, while the software group it belongs to fell 5.38 percent. Two days later it filed for up to 725 million dollars of committed equipment financing, which is the part of the story most people will miss.
The catalyst. On September 8, 2026, at the Goldman Sachs Communacopia and Technology Conference, DigitalOcean chief executive Paddy Srinivasan and chief financial officer Matt Steinfort raised the company's full year 2027 growth outlook to more than 50 percent and said roughly 85 percent of its artificial intelligence revenue comes from higher margin inference services against about 15 percent from bare metal. The stock rose 12.64 percent that session. On September 10, 2026 the company filed a Form 8-K disclosing equipment financing agreements with MUFG Americas Capital Leasing and Finance providing up to 725 million dollars of committed financing, expandable to 1.025 billion through an accordion feature, funding up to 90 percent of data centre equipment costs on advances requested through September 10, 2027, amortising monthly to September 10, 2030, priced at a term SOFR swap rate plus 2.75 percent a year and secured by the equipment. U.S. Securities and Exchange Commission, September 10, 2026
Why it made the five. It is the one pick here that rose in the half of the market this week was built to punish, and the reason is a change in what the business sells. Inference is compute you charge a margin on. Bare metal is a landlord business. Moving from one to the other is why an 85 percent revenue mix is a more interesting number than the growth target it was announced beside. It is also the only pick still well below its own recent peak, 30.1 percent under a 52 week high of 187.50 dollars, so the re-rating starts from a marked down base rather than from a record.
What to watch next. Sep 16: Federal Reserve decision Confirms the thesis: A hold keeps the swap curve where it is and the new facility stays cheap to draw on Breaks it: An increase raises the price of every advance not yet drawn on a facility that runs to September 2027
The case against it. Read the September 10 filing next to the September 8 stage. Two days after raising a growth outlook, the company committed to up to 725 million dollars of secured equipment debt, expandable to 1.025 billion, priced at a term SOFR swap rate plus 2.75 percent a year, with draws available through September 2027. That is the growth plan's funding cost, and it is set by the same swap curve that moved 22.4 basis points at the five year point this week. Every advance the company has not yet drawn gets priced at whatever that curve does next. The growth target was also stated on a stage and not in a filing: a verbal long run number carries none of the liability a guidance range does and can be revised without a document. And this is the second name in this very issue paid for saying 50 percent out loud at the same conference, which is a pattern worth distrusting.
Weekly move (before publication): +19.8%
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NET, view score card · Cloudflare, Inc. · Technology / Internet Infrastructure and Security
- Move before publication
- +9.4%
- Next date
- Sep 18
Cloudflare's chief financial officer raised the company's long run growth target to 50 percent a year from 40 percent at the Goldman Sachs conference on September 9, describing a shift from selling software subscriptions to running an agentic artificial intelligence platform. The stock rose 10.51 percent that session and 9.37 percent on the week, against a software group down 5.38 percent, a gap of almost 15 points in five sessions. The week before, on September 3, it had announced a vulnerability detection and patching service built on OpenAI models.
The catalyst. On September 9, 2026, at the Goldman Sachs Communacopia and Technology Conference, Cloudflare chief financial officer Thomas Seifert raised the company's long run north star growth outlook to 50 percent a year from 40 percent, described the company moving beyond a software as a service model toward an agentic artificial intelligence platform, and named inference, content protection and payments infrastructure as the opportunity set. The stock rose 10.51 percent to 314.18 dollars that session. On September 3, 2026 the company had announced Vulnerability Discovery and Remediation, in early access through Cloudflare Managed Defense and built on OpenAI's Daybreak model family including its dedicated cyber model, available by invitation to selected enterprise customers, citing 60,475 vulnerabilities logged in the National Vulnerability Database by September 2026 against 48,185 across the whole of 2025. Cloudflare, September 3, 2026
Why it made the five. The relative move is the most striking number in this issue. Cloudflare rose 9.37 percent in the same week its own industry group fell 5.38 percent and the 10 year Treasury yield rose 18 basis points, which is exactly the combination that should hurt a company valued on distant cash flows most. It happened anyway, and the reason is that the company reframed what it sells: the announced service searches a customer's code for weaknesses and writes the patch, which is work that customer currently pays people to do. The backdrop it cited is real and checkable, 60,475 software vulnerabilities logged by September against 48,185 across the whole of 2025.
What to watch next. Sep 18: September quarterly options expiration and index rebalance, effective at the close Confirms the thesis: Holding the gain through a rebalance that mechanically reprices the whole software group says the move was company specific Breaks it: Giving it back into the rebalance says the gain was positioning rather than a change in the business
The case against it. This is the most expensive name in the issue by a wide margin, on a multiple of sales in the low forties, and it is the pick whose story rests least on a number anyone filed. A growth target raised from 40 percent to 50 percent was said out loud at a conference. There is no guidance range, no document and no liability attached to it. The product itself is in early access by invitation to selected enterprise customers, which is a long way from revenue. And the valuation is the whole risk: at a multiple like that the price is a promise about the next several years, and the one thing this week proved is that the market has started charging more for promises. The stock closed at 93.7 percent of its 52 week high.
Weekly move (before publication): +9.4%
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HCA, view score card · HCA Healthcare, Inc. · Health Care / Health Care Facilities
- Move before publication
- +2.9%
- Next date
- Sep 11
HCA told the Wells Fargo healthcare conference on September 9 that 99 percent of its business performed as expected or better than in 2025 and that the core business is running at the high side of its long term 4 to 6 percent EBITDA growth range. The stock rose 2.93 percent, the smallest gain in this issue, in a week its own sector fell 4.39 percent and was the worst of the eleven. That is a 7.3 point gap earned by a company saying nothing had broken.
The catalyst. On September 9, 2026 HCA Healthcare presented at the Wells Fargo 21st Annual Healthcare Conference and said that 99 percent of its business performed in line with or better than 2025 expectations and that the core business is running at the high side of its long term 4 to 6 percent EBITDA growth range. It reported 2.1 million adjusted admissions across the first six months of 2026, said commercial volume excluding the insurance exchanges rebounded in the second quarter, and disclosed roughly 22,000 adjusted admissions that shifted from exchange coverage to uninsured status. In its January 27, 2026 fourth quarter release the company had set full year 2026 guidance of 76.500 to 80.000 billion dollars of revenue, 15.550 to 16.450 billion of adjusted EBITDA and 29.10 to 31.50 dollars of diluted earnings a share, and named the expiration of the enhanced premium tax credits among its guidance assumptions. It has since revised that outlook lower. The stock rose 4.93 percent on September 9. Yahoo Finance, September 9, 2026
Why it made the five. It is here because of what it is not. Health Care was the worst sector of the week and biotech fell 4.60 percent inside it, and HCA rose, on no new product, no raised forecast and no deal, purely on a confirmation that the business is tracking. In a week when the market repriced the cost of money, a hospital operator running at the top of its own growth range became one of the plainest things in the market to own. It is also the most liquid pick here by a wide margin at roughly 574 million dollars of trading a day, and the furthest below its own peak at 75.7 percent of a 52 week high.
What to watch next. Sep 11: August consumer price index, 8:30am Eastern Confirms the thesis: Medical care services inflation holding up says HCA can still price its own services Breaks it: Medical care services cooling while everything else heats up means the cost side rises and the revenue side does not
The case against it. I will say the obvious first: a 2.93 percent move on conference remarks is the weakest catalyst in this issue, and the best source I have for what was said is trade reporting rather than a filing. The company filed nothing at all with the regulator between September 1 and September 10. The substance of the bear case is policy, and HCA disclosed it itself. Roughly 22,000 adjusted admissions shifted from exchange coverage to uninsured as enhanced premium tax credits expired, and the company named that expiry in its own guidance assumptions back in January. It then revised its 2026 outlook lower during the year, from an original 29.10 to 31.50 dollars a share, which is why a business running at the high side of its growth range trades between 13 and 15 times earnings instead of higher. A company telling you nothing broke is not the same as a company telling you something improved.
Weekly move (before publication): +2.9%
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Stock of the week
Signet Jewelers Limited (SIG, view score card)
Stock of the Week is the most instructive name in the issue, not the largest weekly mover.
One number decides it. Signet raised the midpoint of its full year adjusted earnings forecast 13.1 percent, from 10.10 dollars a share to 11.30, and left its sales forecast exactly where it was. That is a company telling you it will keep more of every dollar without promising to sell more of anything, in the week the cost of every dollar went up. At 97.71 dollars the price is 8.6 times that raised number. I will be straight about the thing that argues against the choice: Academy Sports did the same thing on the same morning and held its gain better, adding 5.99 percent on September 10 while Signet gave back 4.65 percent. Signet gets the slot on the size of the raise and the price attached to it. Academy Sports gets the credit for what the market did next.
Sector rotation
Into: Energy · Technology · Utilities · Communication Services
Out of: Health Care · Consumer Discretionary · Materials · Financials
Rotation is money moving between industry groups. It shows where big investors added this week and where they pulled back.
Terms in this issue
Margin Expansion. Keeping more profit out of each dollar of sales than you did before. A company can grow its earnings through margin expansion even when it sells no more than last year, which is exactly what two of this week's picks did. More in the Learn hub →
Producer Price Index. A monthly government measure of the prices companies receive for what they sell, before anything reaches a shop shelf. It usually moves before consumer prices do, which is why a jump in it changes what investors expect the Federal Reserve to do.
Equal Weight Index. A version of an index that gives every company the same weight rather than weighting by size. Comparing it with the normal index tells you whether the average company is doing as well as the biggest few.
Basis Point. One hundredth of one percentage point. Interest rates are quoted this way because the differences that matter are small, so a rise from 4.76 percent to 4.94 percent is 18 basis points.
Comparable Sales. Sales from stores a retailer has already been running for at least a year, which strips out the effect of opening new ones. It is the cleanest read on whether existing customers are spending more or less.
Secured Equipment Financing. Borrowing where specific machinery is pledged as collateral, so the lender can take the equipment if the loan is not repaid. It is usually cheaper than unsecured debt, and the interest is often tied to a market rate that can move.