What Happened?
Shares of bedding manufacturer and retailer Sleep Number (NASDAQ:SNBR) jumped 5.6% in the afternoon session after markets rallied, fueled by signs of easing trade tensions between the U.S. and China.
Investor confidence received a boost after conciliatory comments were made regarding trade negotiations, leading to a broad-based rally across equity markets. Major U.S. indices like the S&P 500 and the Nasdaq composite jumped significantly, recovering from previous session losses. The positive sentiment extended to European markets as well. The Consumer Discretionary sector, to which Sleep Number belongs, also benefited from the improved market mood. The move appeared tied to this widespread optimism rather than any company-specific announcements.
After the initial pop the shares cooled down to $6.18, up 3.5% from previous close.
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What Is The Market Telling Us
Sleep Number’s shares are extremely volatile and have had 84 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 6 days ago when the stock dropped 3.8% on the news that a confluence of negative economic data pointed to a weak economy. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations are rising, while their outlook on the labor market is deteriorating. Consumers expressed greater concern about potential job losses and expect lower earnings growth, factors that directly impact discretionary spending. Adding to the unease, Chief Economist at Moody's Analytics, Mark Zandi, warned that 22 states are already showing clear signs of a recession, placing the broader U.S. economy in a precarious position. The ongoing U.S. government shutdown further dampens sentiment, threatening to weigh on incomes and purchasing power.
Sleep Number is down 58.7% since the beginning of the year, and at $6.18 per share, it is trading 69.7% below its 52-week high of $20.41 from December 2024. Investors who bought $1,000 worth of Sleep Number’s shares 5 years ago would now be looking at an investment worth $103.66.
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