What Happened?
Shares of financial services firm Stifel Financial (NYSE: SF) fell 2.6% in the afternoon session after a weaker-than-expected U.S. jobs report sparked broader market concerns about a potential economic downturn. The U.S. Labor Department's report indicated that employers hired fewer workers in August than economists had forecast. Furthermore, previous hiring estimates for June and July were revised downward by a collective 21,000 jobs. This disappointing data follows other recent lackluster economic reports, leading traders to bet on a near-100% probability of a Federal Reserve interest rate cut at its next meeting. The broader market slipped as investors grappled with whether the job market has slowed just enough to warrant a rate cut or so much that it signals an impending economic downturn.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Stifel? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Stifel’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3.7% on the news that the major indices rebounded, as Fed Chair Jerome Powell delivered dovish remarks at the much-awaited Jackson Hole symposium. Powell suggested that with inflation risks moderating and unemployment remaining low, the Federal Reserve might consider a shift in its monetary policy stance, including potential interest rate cuts. This outlook eased market concerns about prolonged high interest rates and their impact on economic growth. The prospect of lower borrowing costs bolstered investor confidence, particularly in sectors that have lagged, leading to a broad rally across the market.
Stifel is up 6.2% since the beginning of the year, and at $112.75 per share, it is trading close to its 52-week high of $117.72 from November 2024. Investors who bought $1,000 worth of Stifel’s shares 5 years ago would now be looking at an investment worth $3,342.
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