What Happened?

A number of stocks fell in the afternoon session after the U.S. government hurtled toward a potential shutdown, sparking economic uncertainty and weighing on investor confidence. 

Market volatility increased as a partisan standoff pushed the federal government closer to a shutdown. If lawmakers fail to reach a spending agreement, a shutdown would begin, furloughing thousands of federal workers. This prospect has weighed on investor sentiment, creating a 'risk-off' mood in the markets as traders brace for potential economic disruption. The political uncertainty adds a layer of caution for investors heading into the final day of the month. 

Adding to the weakness, a key report showed U.S. consumer confidence unexpectedly fell to a five-month low in September. The Conference Board's consumer confidence index slid to 94.2, a steeper drop than analysts had anticipated and its lowest reading since April. This downturn reflects growing pessimism among Americans about inflation and a weakening job market. Consumer confidence is a closely watched economic indicator as it gauges households' willingness to spend. A decline suggests that consumers may pull back on discretionary purchases, such as dining out or shopping for non-essential goods, which could negatively impact the future revenues and profits of companies in these sectors.

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:

• Asset Management company TPG (NASDAQ: TPG) fell 3.4%. Is now the time to buy TPG? Access our full analysis report here, it’s free.
• Custody Bank company StepStone Group (NASDAQ: STEP) fell 3.3%. Is now the time to buy StepStone Group? Access our full analysis report here, it’s free.
• Custody Bank company P10 (NYSE: PX) fell 3.5%. Is now the time to buy P10? Access our full analysis report here, it’s free.
• Credit Card company Bread Financial (NYSE: BFH) fell 4%. Is now the time to buy Bread Financial? Access our full analysis report here, it’s free.
• Diversified Financial Services company Payoneer (NASDAQ: PAYO) fell 4.8%. Is now the time to buy Payoneer? Access our full analysis report here, it’s free.

Zooming In On Payoneer (PAYO)

Payoneer’s shares are very volatile and have had 21 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 biggest move we wrote about over the last year was about 1 month ago when the stock gained 5.7% 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.

Payoneer is down 39.5% since the beginning of the year, and at $6.14 per share, it is trading 44.4% below its 52-week high of $11.05 from November 2024. Investors who bought $1,000 worth of Payoneer’s shares at the IPO in October 2020 would now be looking at an investment worth $634.30.

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