The market took losses today as Tokyo announced a COVID emergency for the Olympics, and new unemployment claims rose.
Today’s market ended the session with all 3 major indices in the red.
There were two negative news stories that brought down the mood. Specifically, Tokyo announced a COVID emergency this morning and banned spectators from the upcoming Olympics. This caused sell-offs around the market for stocks banking on the global reopening, like cruise lines and other tourism-related businesses.
Moreover, the new unemployment claims rose, possibly worrying investors of a slowdown in the reopening of the economy. Fortunately, total claims remained the lowest since March 2020. Nevertheless, the market didn't feel too optimistic today.
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NEW STOCK LIST
Introducing the Potential Meme Stock Collection on Stock Card!
We just published a new list of stocks on Stock Card. Type in 'meme stocks' in the search bar and get the list of the Potential Meme Stocks. If you visit blog.stockcard.io, you can find a recap by our analyst Felipe of the methodology and criteria used to compile these stocks.
Many investors frown upon investing in meme stocks, but we wanted to publish this list for you for two reasons:
#1) Not every potential meme stock is a bad investment. Just because a stock gets caught in the meme stock phenomena doesn't disqualify it as a good long-term buy.
#2) When you see the "meme stock" bubble on any stock on Stock Card, it can help you understand the possible high volatility that can come with investing in that stock.
Potential meme stock Virgin Galactic (SPCE) experiences wild volatility as the founder’s manned flight approaches.
Speaking of potential meme stocks, Virgin Galactic (SPCE) grabbed my attention on the list. The stock has been fluctuating rapidly all year in reaction to delays and resuming of test flights. It had almost doubled since January before it shot up significantly on June 25th, when the FAA announced the green light for commercial passengers.
Investor sentiment is growing more excited by the day as the July 11th flight date for founder Richard Branson approaches. This flight has been in the spotlight for its race against Jeff Bezos' Blue Origin company. Now that Reddit retail has piled on, the volatility is getting quite turbulent. For example, if you go to the sentiment section on the company's Stock Card, you can see the stock is heavily shorted. Every time there is a possibility of good news, the opportunity presents itself for a significant price rally because the stock meets the criteria for being a potential meme stock.
This is a classic meme stock with high short interest and new external triggers such as the billionaires’ space race. I own a few shares after selling a big portion of what I owned before that last drop. I plan to hold the rest as a bet on humanity's progress in conquering the space frontier.
Squarespace (SQSP stock), a potential meme stock, continues on a downward trend despite the market opportunity.
Squarespace (SQSP) is another stock on the meme stock list that grabbed my attention. It is a new publicly traded stock, having direct-listed its IPO on May 19th. While the first few days may have been rocky, the stock gained a lot of ground in the month afterwards. Despite this, the stock has been on a steady downtrend since the end of June, including today’s loss of -3.45%. It’s unclear what exactly is causing such poor investor sentiment, but it may be the case that potential shareholders are waiting for an earnings call or something of the sort to indicate whether this will be a stock worth holding.
Although Squarespace is one of the clear leaders in the non- and low-code website design market, its competitors are constantly challenging it. For example, Wix (WIX stock) extended its business model to connect restaurants to their customers. Overall, the revenue is expected to grow double-digit this year, similar to the last year, as you can see on its Stock Card. I'm not 100% sure about its balance sheet because the company's short term and long term assets are not as strong as some of the latest IPOs. Moreover, new IPOs are often the target of short-term investors looking to capitalize off the initial hype. No wonder it ended up on the Potential Meme Stock list. I don't plan to jump on board anytime soon, at least until we get more clarity on its growth trend and balance sheet.
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