The market indices ended in the green today as the Treasury yield steadied.
All three market indices ended in the green today.
There wasn't a major story that could have moved the market. The Treasury yield, earnings reports, and the number of new COVID cases are the typical market forces that came into play today. On the positive side, the 10-year Treasury yield leveled out, and there were quite a few positive earnings reports. However, the news of the new COVID delta variant continues to worry investors.
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SolarEdge Technologies (SEDG) managed to deliver great results on today’s earnings report despite supply chain issues.
On today’s list of winners on Stock Card, you’ll find SolarEdge Technologies (SEDG) up by 16%. While the company went through some supply chain issues, the CEO stated in today’s earnings report that the company had the foresight to see these difficulties and managed to turn even more profit.
SolarEdge beat forecasts for revenue and earnings per share with an increase in revenue from $331.9 to 480.1 million this quarter. Such a performance was cause for celebration, and investors welcomed the numbers by pushing the stock higher. Management also forecasts an increase to $520-540 million of revenue for the upcoming third quarter. This optimism attracted investors and gave it the push it needed to rise 16% by closing time.
I own the stock, so I'm a happy camper. The reason I held the stock despite some volatility in the past is apparent on the company’s Stock Card. The solar power industry is growing rapidly, and the company is profitable with solid cash.
Also, folks, before we head to the loser stock, I want to revisit a big story quickly. Robinhood (HOOD) stock had a rough IPO, as we discussed a few days ago. Today, however, the stock closed up over 24%, reaching a price of $46.80. This is a rebound from the low it hit of $33.25. The stock price jump seems to be the courtesy of the individual investors who are just warming up to the idea of being a Robinhood investor. CNBC says HOOD was the most traded stock on Fidelity. Because Robinhood has at least 25% of its share available for trading by individual investors, we should expect volatility. Also, it didn't hurt that Cathie Wood's funds started picking up shares as soon as the stock went public. It seems retail investors are pushing their favorite stock up. I genuinely want to know why Cathie is investing in HOOD, and why she is not concerned about its revenue sustainability.
Tencent (TCEHY), Activision (ATVI), and NetEase (NTES) all took losses today as the Chinese government puts its sights on the video game industry.
On the losers' side, if you’ve been following the situation overseas, you’ll know that China is in the middle of quite the crackdown on some of its stocks, like we've seen in the education industry, which we covered earlier. Today, a new industry is taking up space on the Stock Card losers list. Video game companies in China and the U.S. took losses after the government heavily criticized the gaming industry over its effects on the younger generation.
Tencent (TCEHY) was one of the first companies to respond to the state’s remarks, announcing that it would be taking action to keep younger players from spending so much time on one of its popular games, Honor of Kings, and eventually more titles. This will damage its revenue stream from gaming, and the stock price reflected this by falling over 7% by the close.
Tencent also holds a 5% stake in gaming giant Activision Blizzard (ATVI). This company has a large exposure to the Chinese gaming industry through popular titles such as Call of Duty, World of Warcraft, Overwatch, etc. This relationship caused Activision’s share price to drop by 3.5% today as well.
NetEase (NTES) is a rival entertainment company in China, heavily involved in gaming as well. The government’s criticism of video games caused NetEase stock to slide almost 11.5% by the close. This is causing widespread losses, but one can assume that China won’t destroy its lucrative industries. I'm wondering if the recent volatility in China may mean a good opportunity to buy an index fund or ETF that tracks China's growth. It's hard to target exactly which company is your best bet for buying the dip, but if overall China is beaten down now, it may mean a good chance to pick up some China-focused ETFs. Type in China in the search bar, and China Fund ETF (CHN) or MS China A Shares (CAF) will appear. These may be worth watching if the situation begins to improve. I'm researching these for now.
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Check out Wealthy Nurse Janee's portfolios, our featured investor and partner of the week.
Let's wrap up by stopping by Jane Clay's portfolios on Stock Card. Janee is the founder of Wealthy Nurse Janee, and is our featured investor of the week. Janee runs two portfolios on Stock Card: her Dividend & Value portfolio and her Higher Risk portfolio.
I'm so impressed by her return, but also by her superwoman powers. She is a nurse, as you can guess from her name, a mom, an avid investor, and she is quite active on TikTok.
I'll leave a link to my conversation with Janee. I would highly recommend looking her up on the Stock Picks page and following her portfolios to get notified when she adds new stocks to her portfolio.
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