🍨 Daily Scoop: Crash Or No Crash? | Trade Stocks

Crash Or No Crash?

By Wed, Jan 13, 2021

Hey Scoopers,

Despite an abrupt dip in the middle of the day and inflation worries, the indices finished the day in the green. — More on that in the “Overall Market” section.

Beyond the overall market, one company sold more than a million phone sets and investors celebrated the milestone, while a cybersecurity stock got hacked, and its stock price paid for it. — More on that in the “What’s Up?” and “What’s Down?” sections.

Oh, by the way, people are getting ready for a crash. — More on that in the “Water Cooler” section.

But, first, here is a recap of what happened in the market Tuesday:

Market Recap

  • U.S. markets: All three indices finished Tuesday in the green. Scroll down to the “Overall Market” section to read more.
  • Cryptocurrency: Bitcoin’s price is hovering above $33,000, well-below its all-time high last week, but well-above where it was a year ago this time.

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Inflation Worries

The stock market indices had an abrupt dip mid-day and then recovered to above zero by the end of the day. Investors are watching for the Consumer Price Index (CPI) report that comes out Wednesday morning and looking for any signs of inflation. Even a small increase in CPI may be interpreted as a sign of inflation and could negatively impact market sentiment.


New Phone Sets

So, what happened?

Shares of Zoom (Ticker: ZM) were up by more than 5%. The company has fallen far from its all-time high of above $400 per share. Today’s stock price upward movement comes after the news that the company plans to raise more than $1.5 billion in new capital through a secondary public offering. The stock price jump wasn’t due to the news that it is raising money. It was due to the news that more than one million customers purchased Zoom’s new Phone Sets.

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The Protector Got Hacked

So what happened?

Shares of Mimecast (Ticker: MIME) were down by more than 13%. The stock price has been falling steadily over the last few days. The price drop came after the news that the company’s security certification was compromised. This breach impacts 10% of the customers. Cybersecurity breaches are always events that turn the sentiment negative, and it’s more damaging when the folks who should be able to protect their customers get beached themselves. It’s worth watching Mimecast to see how the situation pans out and whether there would be an opportunity to pick up shares at a reasonable price.

Is A Market Crash Coming?

So what happened?

If you have paid attention to the news these days, there is so much talk about a market crash, at the same time as the market keeps hitting all-time highs. It’s a dichotomy.

On the one hand, when a new year arrives, everyone focuses on the annual stock market return, and with all three indices wrapping one of their best years in the history of the stock market, it’s only natural to think things would surely stop at some point. Beyond the physiological aspect of what goes up must go down at some point, the rise of the long-term yield of the U.S. Treasuries above 1% is being interpreted as a market crash sign.

According to Axios, investors pilled $29.1 billion into cash, $14.9 billion into bonds, and $1.5 billion into gold while the stock market inched upward last week. It seems everybody is getting ready for a crash.

If you have any questions, or suggestions let us know by emailing us at [email protected]. We look forward to hearing from you.

About the Author

The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card