What Happened?
A number of stocks fell in the afternoon session after the release of a stronger-than-expected Producer Price Index (PPI) for January, fueled concerns about inflation and its impact on consumer spending.
The U.S. Bureau of Labor Statistics reported that the PPI, a measure of wholesale prices, rose 0.5% in January, exceeding economists' expectations. A significant driver of this increase was a 0.8% advance in the index for final demand services. Specifically, the data showed a sharp 2.5% jump in margins for trade services, which reflects the profits received by wholesalers and retailers. This suggests that businesses are passing on higher costs, potentially including import tariffs, to customers. With recent data also showing a rise in consumer loan delinquencies, investors are worried that already-stretched households will cut back on discretionary purchases, negatively affecting companies tied to consumer spending.
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:
- Boat & Marine Retailer company OneWater (NASDAQ: ONEW) fell 4.7%. Is now the time to buy OneWater? Access our full analysis report here, it’s free.
- Department Store company Macy's (NYSE: M) fell 3.7%. Is now the time to buy Macy's? Access our full analysis report here, it’s free.
- Beauty and Cosmetics Retailer company Bath and Body Works (NYSE: BBWI) fell 3.3%. Is now the time to buy Bath and Body Works? Access our full analysis report here, it’s free.
Zooming In On OneWater (ONEW)
OneWater’s shares are extremely volatile and have had 40 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 9 months ago when the stock dropped 13.7% on the news that the major indices pulled back (Nasdaq -1.3%, S&P 500 -1.1%) as Israel carried out significant strikes on Iranian nuclear and military sites, dramatically escalating fears of a broader conflict in the Middle East. This development has sent crude oil prices surging, as investors fear potential disruptions to global oil supply and a wider regional conflict. The conflict has intensified investor anxiety, compounding existing market volatility, especially in risk assets like stocks, and prompting a pronounced shift toward safe-haven assets.
OneWater is up 5.8% since the beginning of the year, but at $11.39 per share, it is still trading 36.1% below its 52-week high of $17.83 from March 2025. Investors who bought $1,000 worth of OneWater’s shares 5 years ago would now be looking at an investment worth $308.76.
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