Stocks sell-off in return from Labor Day weekend 📉

Good Afternoon! 

Hey, everyone. It's Adam from Elite Trade Club. 

Here’s what moved the market today.

Markets 📈

Stocks sold off in their return from the Labor Day weekend, with the Nasdaq leading the fall lower. The small-cap Russ2K was also an underperformer.

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Market-Moving News 📈

Oil and Copper Prices Tumble After Goldman Sachs Cuts Chinese Demand Forecast 📉

Oil and copper prices took a significant hit after Goldman Sachs downgraded its outlook for Chinese commodity demand. U.S. crude futures fell 4.4% to $70.34 per barrel, marking the steepest decline since November and the lowest price for oil this year. Copper prices also dropped by 2.7%.

Goldman Sachs Cuts Forecast 📉
Goldman Sachs revised its copper price forecast for 2025 down to $10,100 per ton, a sharp reduction from its previous estimate of $15,000 per ton. The revision comes after data this summer pointed to softening demand in China for both oil and copper, leading to broader concerns about the Chinese economy.

Industry Impact 🏭
The warning from Goldman Sachs sent shockwaves through the markets, with shares of major copper producers declining. Freeport-McMoRan dropped over 6%, while Antofagasta and Glencore fell more than 3% in London trading. Analysts are also watching for potential increases in oil supplies from the OPEC+ cartel, which could further impact prices.

Broader Economic Concerns 🌍
The market reaction reflects growing unease about China's economic outlook, particularly its demand for key commodities. Official data for August indicated a slowdown in Chinese manufacturing activity, adding to the concerns about future demand and economic stability.

Insurers Face Steeper Losses From Natural Disasters 📉

Insurers are being warned to prepare for a significant increase in annual global losses from natural disasters. According to Verisk Analytics, these losses are projected to average $151 billion per year, more than double the $60 billion annual average recorded just 12 years ago. This surge is driven by a combination of more frequent and severe weather events, as well as economic factors.

New Benchmark for Insurers 📊
The $151 billion benchmark set by Verisk is meant to help insurers assess whether a particularly costly year is an anomaly or part of a trend. Unfortunately for insurers—and their policyholders—the recent uptick in losses appears to be the new normal. Over the past five years, insured losses have averaged $106 billion annually, far exceeding previous expectations.

Potential for Even Larger Losses ⚠️
Verisk's data also suggests that in any given year, there is a 1% chance of insured losses reaching as high as $400 billion. This eye-popping figure highlights the growing financial risks that insurers face as natural disasters become more devastating.

Factors Beyond Climate Change 🌍
While global warming is expected to play an increasing role in future losses, it’s not the sole culprit. Rapid urban expansion has placed more people and property in harm’s way, and high inflation has driven up the costs of repairs and replacements, compounding the financial impact of natural disasters.

Retailers Face Pressure as Consumers Tighten Spending 💸

Dollar General took a hit, with its stock dropping by a third after reporting weaker-than-expected sales. Lower-income shoppers, earning less than $35,000 annually, are struggling, particularly at the end of the month. Over 60% are cutting back on essentials due to rising prices, reflecting broader financial stress.

Consumer Confidence Shifts 📉
Despite overall consumer confidence rising, those earning under $25,000 are feeling the squeeze, echoing the tough financial reality faced by Dollar General’s customers. Inflation for necessities is easing, but with smaller savings and a cooling job market, the pressure is still on.

Big-Box Retailers Gain Ground 🛍️
Middle- and higher-income shoppers are favoring big-box stores like Walmart and Target, which have reported better-than-expected sales growth. These retailers have attracted a wealthier customer base by cutting prices on frequently purchased items.

Discount Retailers Outshine Department Stores 📊
Shoppers looking for deals are turning to off-price retailers like Burlington and T.J. Maxx, which outperformed department stores. Meanwhile, mid-tier stores like Macy’s and Kohl’s are seeing declining sales as consumers continue to seek better value.

Holiday Season Outlook 🎄
With the holiday season approaching, retailers like Kohl’s plan to ramp up discounts, while others have trimmed inventory to avoid deep markdowns. Consumers are clearly waiting for the best bargains before opening their wallets.

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BranchOut Food [BOF] $3.38 (+69.0%)
rallied after a Form 4 filing revealed the company’s CFO recently purchased another 131,891 shares of stock, bringing his total position to 161,891 common shares.

Conifer Holdings [CNFR] $1.15 (+65.9%)
completed the sale of its insurance agency operations in exchange for a $45 million consideration from an unnamed buyer.

SpAr Group [SGRP] $2.40 (+65.5%)
agreed to be acquired by Highwire Capital for $2.50 per share, with the deal expected to close in Q4 2024.

Windtree Therapeutic [WINT] $3.19 (-60.6%)
filed a Form 424B5 prospectus for the sale of up to 27,668,106 shares of common stock.

Agape ATP [ATPC] $1.63 (-36.0%)
pulled back after rallying more than 60% on Friday, despite no recent news for the Malaysian company.

IO Biotech [IOBT] $1.00 (-33.3%)

announced after Friday’s closing bell that the data monitoring committee recommended it continue a Phase 3 study of IO102-IO103 + KEYTRUDA combination therapy for melanoma patients.

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That's it for today! Please, write us back, and let us know what you think of the Closing Bell Roundup. We're always eager to hear feedback!

Thanks for reading. I'll see you at the next open! 

Best Regards,
— Adam G.
Elite Trade Club

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