What Happened?
A number of stocks fell in the morning session as the broader market tumbled in the morning session after a surprisingly weak U.S. jobs report and the announcement of new, widespread tariffs on imported goods. The U.S. economy added only 73,000 jobs in July, falling far short of the 109,000 forecast. Compounding the issue, job gains for May and June were revised down by a combined 258,000, signaling what some see as “increasing signs of fragility” in the labor market. Simultaneously, the White House announced new tariffs, ranging from 10% to 41%, on goods from 92 countries. This “double whammy” of negative news has intensified fears that ongoing trade wars are damaging the U.S. economy. The combination of a weaker labor market and new trade barriers has rattled investor confidence, fueling expectations that the Federal Reserve may be forced to cut interest rates to support the economy.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Footwear Retailer company Shoe Carnival (NASDAQ: SCVL) fell 3.2%. Is now the time to buy Shoe Carnival? Access our full analysis report here, it’s free.
- Apparel Retailer company Zumiez (NASDAQ: ZUMZ) fell 3.1%. Is now the time to buy Zumiez? Access our full analysis report here, it’s free.
- Vehicle Retailer company America's Car-Mart (NASDAQ: CRMT) fell 5.7%. Is now the time to buy America's Car-Mart? Access our full analysis report here, it’s free.
- Boat & Marine Retailer company OneWater (NASDAQ: ONEW) fell 3%. Is now the time to buy OneWater? Access our full analysis report here, it’s free.
- Department Store company Dillard's (NYSE: DDS) fell 3.1%. Is now the time to buy Dillard's? Access our full analysis report here, it’s free.
Zooming In On America's Car-Mart (CRMT)
America's Car-Mart’s shares are very volatile and have had 24 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 3.4% on the news that the company announced a delay in filing its annual report and stated that its financial statements for the past two fiscal years should not be relied upon. The auto retailer said it was unable to file its Form 10-K by the July 29 deadline due to incomplete disclosures related to loan modifications for customers experiencing financial difficulty. This process led the company to identify significant deficiencies and what it expected to be one or more 'material weaknesses' in its internal control over financial reporting. Consequently, America's Car-Mart warned investors that previously issued financials for fiscal years 2024 and 2025 were unreliable. The company also anticipated receiving a non-compliance notice from Nasdaq, adding to investor uncertainty.
America's Car-Mart is down 15.2% since the beginning of the year, and at $42.22 per share, it is trading 35.6% below its 52-week high of $65.55 from July 2024. Investors who bought $1,000 worth of America's Car-Mart’s shares 5 years ago would now be looking at an investment worth $441.54.
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