Master your fundamental research. Join 79,627 investors who trust our platform and content.
Save 54+ hours of fundamental research with free access to Stock Card.
We only ask your name and email address.
KEY POINTS
OVERALL MARKET
Despite the Fed's insistence on maintaining favorable monetary policies until 2023, the markets finished the day in the red.
The stock market indices finished in the red today amidst new estimates from the Fed.
The Federal Open Market Committee (FOMC) released its public statement today. Despite the positive economic outlook, theFed's officials decided to keep interest rates low until 2023 to make sure the impact on economic recovery is long-lasting and not transitory. On the other hand, the FOMC’s Summary of Economic Projections still shows continued worrying signs of inflation. Officials use the core personal consumption expenditure to measure inflation, and so far, the inflation is at 3.0%, up by 0.8% from its March forecast. The Fed's headline inflation expectation is 3.4%, with long-term target inflation at 2%. The Fed believes the higher prices are temporary and not systematic. Put the positive and negative news together and the final result was a decline in all three indices. PAY FOR YOUR IPHONE WITH DIVIDENDS
Folks, one of my goals from investing in the stock market is to pay for things I want to do in life. Of course, retirement is a classic investment goal. But what about paying for the next iPhone you'd like to buy. Our partner Joseph Hogue has the same idea. In his latest video, he talks about three dividend-paying stocks that you could invest in and use the dividends to pay for your next iPhone in September. Watch the video and let me know if you like the idea of paying for things you need with your stock picks and dividends.
WHAT'S UP?
Arrival (ARVL) could be the new meme stock you may want to consider.
Redditors on WallStreetBets continue to hunt for short-squeeze-able stocks, and today I noticed a new one on Stock Card’s winners and losers page. Arrival (ARVL) is looking like the new meme stock.
Arrival is an electric van and bus maker. It started five years ago in England but has come to public attention in 2021. The company is currently building micro-factories to allow for quicker production. It’ll need a faster production capacity because it struck a deal with UPS for a whopping 10,000 vans. The ride-sharing company Uber has also recruited the English start-up to provide it with a custom electric vehicle to supplement its fleets and drivers. While it may still need to streamline and scale its operations, the company has built a trustworthy brand across the EV sector, resulting in more new contracts. Until then, the capital accrued through these massive partnerships bodes well for this company over the coming year and beyond. As a result, this may be a meme stock worth your attention, despite its sizeable short interest. While we are on the subject of meme stock, recently, I created a short squeeze list that includes several companies with high short interest and bearish sentiment that may be your starting point for finding future meme stocks. WHAT'S DOWN?
Chinese online education platforms are facing existential challenges from the regulators.
In China, President Xi Jinping plans to curb private tutoring after comments last week about putting more responsibility on the public education system. Sources told Reuters that "the industry should be preparing for the worst,” as officials plan to begin trial phases of the new regulations. This may include banning tutoring over the weekend, heavily limiting advertisement and other actions to bring children’s education back into the school building.
Naturally, this has caused mass sell-offs across the industry. With the future of after-school and online tutoring uncertain, stocks listed on American exchanges like TAL Education Group (TAL) and New Oriental Education & Technology Group (EDU) have fallen 16.92% and 11%, respectively. However, I don't believe these drops are buy-the-dip opportunities. Thus, I would expect the value of Chinese private education stocks to experience significant volatility as government officials run their trials of the new legislation. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP REPORT IN YOUR MAILBOX?
Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
KEY POINTS
OVERALL MARKET
Producer Price Index Supports Inflation Fears as The Market Closes in the Red
Although the S&P 500 index nearly topped its all-time high at one point today, the three main indices finished in the red.
Reports are giving investors mixed signals. Inflation is still showing its face, while officials continue to claim that it is transitionary. The Producer Price Index shows the greatest increase we have ever seen since it began to be tracked in 2010. This is being mirrored by an increase in prices across the economy. At the same time, things are looking up with the re-opening of the economy. Many are waiting to hear the Fed’s monetary policy statement for June. Fed's reaction to the economic indicators could be one of the main events that move the market in the next few days and weeks. NEW FEATURE
Portfolio Update
As I logged in to my Stock Card account, I noticed a portfolio update by Think Tank Trading portfolio. Not sure if you have seen that feature yet. We added it recently, giving you a quick update whenever any of the portfolios you are following take action. For example, today Think Tank Trading sold half of its Airbnb (ABNB) shares, and you can see his note as to why he did that.
Make sure to visit the Stock Picks page, and follow your favorite portfolios. WHAT'S UP?
One Day After a 19% Drop, Lordstown Motors (RIDE) Stock Price Jump Was Short-Lived
Yesterday’s market recap covered the alarming 19% plunge in price for the automotive company Lordstown Motors (RIDE). This came off the back of dual CFO and CEO resignations. Today, the stock reversed its direction, up by 11% during the trading day and ultimately by 7% in the after-hours session.
The business saved face today as Angela Strand, the new chairwoman, reassured shareholders that the company is expecting to meet its electric truck production deadline. Previously, the start-up EV business had warned that it was not sure if it could stay afloat and fulfill the orders by September. Although the announcement calmed investors, Lordstown confirmed it would have a limited pickup production, leaving more uncertainties for the future. No wonder why the 11% stock price jump during the normal trading hours gradually faded down to 7% in the after-hours trading. WHAT'S DOWN?
Just Eat Takeaway.com (TKAYF) Creates a Global Food Delivery Giant with the Acquisition of GrubHub (GRUB)
If you recall the beginning of the food-delivery gig economy, Grubhub (GRUB) was among the leaders. Fast forward to today, the company caught my eye at the top of today's biggest losers on the winners and losers page. Shares were down more than 68%. However, this price drop doesn’t mean Grubhub is out of the game quite yet.
Across the pond, Grubhub's counterpart in Europe, Takeaway.com (TKAYF), has decided to creator a global food delivery giant by acquiring it. This expansion to a global giant started from the Netherlands, continued into a merger with Britain’s Just Eat service, and is now completed by the acquisition of GrubHub today. With the combined forces of existing customer bases and great growth due to the pandemic, the new company is poised to become a serious contender for the top spot in the US food delivery market. Generally speaking, the food industry is a low-margin business. There is not much profit left to be made in the delivery side of the market. Therefore, operations scaling and sharing technology infrastructure are the main ways food delivery companies can grow their profits. It seems that's what the new merger is all about. One last question before we wrap up is: What happens to the investors who were holding Gubhub shares? Shareholders were issued ADSs (foreign stock tradeable on US exchanges) for Takeaway Just Eat based on their holdings. Takeaway stock will begin trading under GRUB (which has been suspended) as of tomorrow. Don't be alarmed by the price drop. You still own shares of the combined company that is now one of the largest food delivery companies worldwide. They have a great shot at profitability and growth. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
Key Points
Overall Market
Investors Expect the Fed to Rollback Pandemic-Era Favorable Policies
The stock market indices started with mixed results.
After last week's volatile sessions, the markets set a new record on Monday. Technology stock overperformed, with the Nasdaq index rising by 0.74%, and the S&P 500 index reached a new record high for the third session in a row. With the inflation rate above the Fed's target and the steady decline in the number of new jobless claims, investors believe the Fed’s officials might start rolling back pandemic era policies. This is something to watch in the next few days. What's Up
Stripe's Upcoming IPO Sent Shopify's (SHOP)'s Stock Up by More than 4%
Shares of Shopify (SHOP) were up by more than 4% on Monday. After news that the credit card processor Stripe would make its debut on the public markets, Shopify’s investors were pleased to remember the company is an investor in Stripe's funding round. Although the investment didn’t grant Shopify a controlling interest, the markets expect Stripe’s valuation to increase further than its current $94 billion. That would represent a sweet return over investment for Shopify.
What's Down
EV Maker Lordstown Motor's (RIDE) Stock Sank to Near Its All-Time Low After Its CEO and CFO Resigned
From the list of loser stocks for the day, shares of Lordstown Motors' s (RIDE) were down by more than 18% on Monday. The company announced its CEO and CFO have resigned due to a board of directors investigation. Once hovering above $31 per share, the EV maker’s stock is now not too far from its all-time low of $6.69 per share.
The allegations are against the CEO and the CFO, accusing them of exaggerating the company's Endurance pickup truck pre-orders. Unfortunately, it seems that things are going from bad to worse for Lordstown. If you remember, EV stocks were some of the most hyped stocks in 2020. Negative events such as what's happening for Lordstown Motor shouldn't cloud your judgment about the future of EVs. Only in Q1 of 2021, the number of electrified vehicles jumped by 81% in the U.S. The world's transition to electric vehicles has just begun. Invest for the long-term in EV stocks that have a solid balance sheet and track record of success, and you'll do fine. Let me create a watchlist for you. I go to Stock Card's Screener page, type in electric vehicles in the search bar, and narrow down the search to companies with no cash concerns and a strong sales track record. The result is a list of 9 stocks that you could use to start your EV portfolio. Get the Strong EV Stocks watchlist: Get the List Want to receive this daily stock market recap report in your mailbox?
Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
Key Points
Overall Market
Investors Continue with Optimism as The SEC Investigates Meme Stocks
Yesterday, we talked about how the 5% inflation rate left investors unfazed. Yesterday's market optimism rolled over to today. The NASDAQ led the indices, finishing up +.35%. Some analysts predict that the rotation of value vs. growth may be coming to a close as we leave the “reopening” stage of our economy.
With little breaking news today, I reflected on the SEC’s decision to investigate meme stocks and how the current market structure allows more prominent wholesale traders to manipulate the price. The SEC is rightfully reacting to the new market paradigm. Chairman Gary Gensler has expressly noted his focus on “wholesalers,” the companies who process retail trader orders for profit. Most new generation brokerages, such as Robinhood and Webull, make their money by selling their users' orders to market makers such as Citadel, which gives those wholesalers the ability to move the market by combining the orders. What's Up
Dick's Sporting Goods (DKS) and Best Buy (BBY) Are Solid Retailers with Undervalued Stocks
One of my favorite Stock Card features is the ability to create and browse watchlists such as my 4-Greener watchlist. This watchlist gives me the list of companies that have high growth potential, solid operations, a history of overperforming the market, and are, for some reason, hovering in the undervalued price range. Today, two retailers grabbed my attention, Dick’s Sporting Goods (DKS) and Best Buy (BBY).
Dick’s Sporting Goods (DKS) is a solid stock. Despite the company's solid upward movement since the pandemic hit, the stock is still in the undervalued range. It continues to open new stores and strengthen its eCommerce capabilities by allowing in-store and curbside pick-up. It's also quite impressive how the company acquired 8 million new customers and use its loyalty program to keep customers coming back for more. If you are a dividend-seeker, Dick's Sporting Goods could be a good one to consider. Like Dick's, Best Buy (BBY) has invested in its store experience and eCommerce capabilities. Both companies would inevitably put out an excellent performance in 2021 since investors are comparing the revenue and profit figures with 2020's dip when most retail operations were shut. Best Buy can be a good addition to a dividend-focused portfolio with its cash-generating operations and undervalued stock. I don't own either of the stock but may be researching them further to add to Stock Card's Dividend Seeker portfolio. What's Down
The 10% Drop in Vertex Pharmaceuticals (VRTX) May Mean a Buy-the-Dip Opportunity
Yesterday, things looked quite positive for Vertex Pharmaceuticals (VRTX). It announced that its gene-editing efforts to deal with diseases such as sickle-cell were showing signs of success. It had tested multiple patients, and the months of study proved conclusively that the treatment was effective. The optimism was short-lived though.
Today, Vertex shares dropped a whopping -10.96%. With such good news the day before, the drop came as a shock. The company has just discontinued the development of another drug, VX-864. Investors were expecting a breakthrough treatment for the genetic disorder AATD but instead were informed that its effectiveness was not evident during trials. Despite today's drop, VRTX is still among the leading stocks that are researching and shaping the future of gene editing. Its stock price is undervalued and the company has a strong balance sheet to fund its future R&D effort. If you are an investor who can tolerate market fluctuations that come with FDA-related news, this may be a chance to buy the dip in VRTX. Want to receive this daily stock market recap report in your mailbox?
Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
Key POints
Overall Market
Investors Show Irrational Optimism in the Face of Inflationary Fears, Pushing the Stock Market Higher Today
All three market indices dipped mid-day but finished in the green.
While inflation fears have yet to subside, it seems investors may be ready to return to the market. Today Consumer Price Index numbers were released, showing the fastest consumer prices jump since 2008. The inflation rate came at 5%, near the 4.7% expected rate. Despite this, the market pulled through to the finish on a positive note. One reason for unexpected optimism is the decline in the number of new jobless claims that the Bureau of Labor Statistics reported today, as is customary on Thursdays. Jim Cramer of CNBC speculated that perhaps investors were becoming impatient with staying put and waiting out the scare. It appears they may be getting back in the market. Overall, today's reaction to the Consumer Price Index is a reminder that the market's reaction to facts and information is never easy to predict. What's Up
RH (RH) Releases Promising Earnings and Jumps in Price
From the list of winning stocks of the day, RH (RH) grabbed my attention. Formerly known as Restoration Hardware, it is a well-known luxury furniture retailer. Earnings released yesterday showed net revenue increased 78%, reaching $861 million from last year’s $483 million. It's not that surprising to see such a jump. Last year this time, COVID-19 was still raging across the world and all retail stores were closed. Comparatively, the revenue jump is quite expected. Nevertheless, investors pushed the stock up 15% today.
If you visit the company’s Stock Card, it’s clear that RH has high growth potential, strong operations, and outperforms the market quite consistently. With the inflation rate going up and consumers recovering from pandemic restriction, it’s not too difficult to see RH continue to grow. This is not my typical investment but watch for the stock's valuation at 69 times the price-to-earnings ratio if you are investing now. What's Down
Gamestop (GME) Upward Trend Reversed Over Seemingly Irrational Investors
The original meme stock, GameStop (GME), is all over the news once again! People say that even bad PR is good PR, but what happens when good PR has the opposite effect? Yesterday, Gamestop announced the appointment of two veteran Amazon leaders to serve as the company's new chief executive officer and chief financial officer, as well as their earnings report.
The new executives' expertise gained while working at the eCommerce giant will undoubtedly prove helpful, yet investors have reacted differently than expected. Over today’s trading day, we saw GameStop shares drop -27%. This seems irrational in the face of higher-than-estimated earnings in yesterday’s report. Many factors are at play in the world of meme stocks. Traditional market fundamentals apply only loosely at times of intense volatility, and “YOLO” plays. Many retail investors who bought GME shares were there for a quick buck, and they may be growing tired of waiting for chairman Ryan Cohen to present a drastically different game plan and business plan. This irrationality can also stem from having such a large amount of the float owned by retail investors. Most hedge funds are less prone to switching their strategy short-term, but I expect that members of Wallstreetbets are mostly short-term oriented. Want to receive this daily stock market recap report in your mailbox?
Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
|
Master your fundamental research. Join 79,627 investors who trust our platform and content.
Save 54+ hours of fundamental
research with free access to Stock Card. Categories
All
Archives
March 2024
|