There is something different about the meme-stock suite
The meme stock craze is back, but it’s a little different this time around.
First, the similarities. AMC Entertainment AMC,
the operator of the cinema chain, climbed 36% on Thursday, and has more than doubled in the past four days. There is, of course, no fundamental news to drive such a rapid increase, and in contrast, Cineworld Group CNWGY,
operator of US and UK theaters, is up 8% in the past five days. Short sellers lost $ 1.3 billion on the AMC surge, Bloomberg News reported, citing data from S3 Partners.
And it’s not just AMC. GameStop GME,
the video game retailer, has climbed 49% in the past five days, and Beyond Meat BYND,
the maker of meat substitutes, is up 32% during this period. Trading volume on the New York Stock Exchange and Nasdaq on Thursday was the highest since March 19.
But there are a few differences from what happened the last time popular stocks on the Reddit WallStreetBets bulletin board valued. For one thing, a quick glance at the App Store rankings, for iPhones and Androids, doesn’t find the likes of Robinhood Markets or any other brokerage at the top. Options activity is not so spectacular either – still strong, but well below the February peak, said George Pearkes, analyst at Bespoke Investment Group. The Cboe VIX volatility index,
unlike the situation in February, is contained.
The larger market has its eyes elsewhere, on the economic rebound and whether soaring inflation will cause the Federal Reserve to step on the brakes sooner than it wants. As anyone who has contributed to AMC’s revenue knows, sequels just don’t have the same impact.
Inflation gauge hits 13-year high
The Fed’s favorite inflation gauge, the PCE price index climbed 0.6% in April, reaching the highest level in 13 years, while the annual base reading was the highest since 1991. The US goods trade deficit narrowed to $ 85.5 billion in April, after a record high. 92 billion dollars. Data on manufacturing and consumer sentiment in the Chicago area will be released shortly after the opening.
A White House budget is nothing more than that – exactly what the executive thinks lawmakers should do, and often the proposals have no bearing on reality. But it’s still telling to see the news that President Joe Biden will come up with a $ 6 trillion budget. Treasury Secretary Janet Yellen said the budget proposal would result in reduced tax deficits and increased tax revenue going forward.
Investors criticized HP’s HPQ,
results, despite the computer maker exceeding profit expectations and raising its outlook. On the other hand, the Salesforce.com CRM database software publisher,
climbed, having exceeded expectations with its results and outlook.
Wholesale Costco Discount Price,
reported an increase in profits, as same-store sales jumped 15% in its fiscal third quarter. Retailer Ollie’s Bargain Outlet Holdings OLLI,
jumped after exceeding expectations, despite the lack of a financial outlook.
US DJIA equities,
were stronger at first. The 10-year Treasury yield TMUBMUSD10Y,
Chinese yuan CNYUSD,
climbed to a five-year high against a basket of rivals.
struggled, falling below $ 37,000.
If you are looking for diversification, international small caps can be a source. This table, compiled by Putnam Investments, shows the low earnings correlations between non-US small caps and other asset classes. The fund manager also notes the low analyst coverage of these stocks, with a median of three short analysts covering each stock, compared to a median of 20 for US large caps.
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