What Happened?
A number of stocks fell in the afternoon session after markets pulled back, reversing early gains, as investor sentiment remained cautious despite a softer-than-expected inflation reading.
Stocks rose in the morning session after an unexpected drop in the Producer Price Index (PPI) for August signaled easing inflation and raised expectations for a potential Federal Reserve interest rate cut. The U.S. Bureau of Labor Statistics reported that the PPI, which measures wholesale prices, edged down 0.1% the previous month, contrary to analyst expectations for a 0.3% rise. This data gives the Federal Reserve more flexibility to consider lowering interest rates to stimulate 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:
- Healthcare Technology for Providers company Astrana Health (NASDAQ: ASTH) fell 4.5%. Is now the time to buy Astrana Health? Access our full analysis report here, it’s free.
- Healthcare Technology for Providers company Privia Health (NASDAQ: PRVA) fell 3.6%. Is now the time to buy Privia Health? Access our full analysis report here, it’s free.
- Genomics & Sequencing company Illumina (NASDAQ: ILMN) fell 3.3%. Is now the time to buy Illumina? Access our full analysis report here, it’s free.
- Research Tools & Consumables company Waters Corporation (NYSE: WAT) fell 3.4%. Is now the time to buy Waters Corporation? Access our full analysis report here, it’s free.
- Surgical Equipment & Consumables - Specialty company LeMaitre (NASDAQ: LMAT) fell 3%. Is now the time to buy LeMaitre? Access our full analysis report here, it’s free.
Zooming In On Astrana Health (ASTH)
Astrana Health’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 19 days ago when the stock gained 3.1% 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.
Astrana Health is down 8.8% since the beginning of the year, and at $29.37 per share, it is trading 53% below its 52-week high of $62.54 from October 2024. Investors who bought $1,000 worth of Astrana Health’s shares 5 years ago would now be looking at an investment worth $1,671.
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