Dow’s Shake-up
Hey Scoopers,
The market’s rally makes you wonder who keeps buying even though we all know how high the stock market has flown in recent months. — More on that in the “Overall Market” section.
Beyond the overall market, one stock’s rapid price jumped pushed it into a fair share price range, and a tech stock’s flat growth expectations disappointed its investors. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, a rare shake-up in the Dow index speaks to the emergence of a new economy. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: All three indices finished Wednesday in the green. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price hovered under the $11,500 mark on Wednesday.
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Who Is Buying?
The market
went back to its happy place after some good news COVID-19 vaccine progress. The almost consistent upward movements of the market make you wonder who is still buying?! We all know the market has rallied more than we have ever expected it would, but people continue to invest in the market anyway. As if short-term gains are overshadowing long-term logic.
It’s Now Fairly Priced
So, what happened?
Shares of Anaplan (Ticker: PLAN) were up more than 21% on Wednesday. The company offers a “cloud-based business planning and performance management platform.” It reported a better-than-expected quarterly earnings report. The revenue jumped more than 30%, and the company continued to expand its presence within its existing customer accounts. Despite the excellent performance, analysts from Piper Sandler downgraded the stock citing the 21% price jump puts the stock in the reasonably priced range.
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It Can’t Be Flat
So, what happened?
Shares of Pure Storage (Ticker: PSTG) were down by almost 10% on Wednesday. The enterprise data storage company has been underperforming the overall. The investors’ disappointment is mostly due to the informal flat growth guidance provided by the management in the latest quarterly earnings report. It’s almost like the tech stocks can’t afford to be realistic and have to always come up with better news and faster growth if they’d want to keep investors happy.
The Dow Shake-up Speaks Of A New Economy
So what happened?
The Dow index is mostly characterized as the old economy index. You can find oil stocks and industrial companies shaping the Dow for the most part. However, the index just announced welcoming Salesforce.com (Ticker: CRM), Amgen (Ticker: AMGN), and Honeywell (Ticker: HON) and kicking out Exxon Mobil (Ticker: XOM), Pfizer (Ticker: PFE) and Raytheon Technologies (Ticker: RTX). This is one of the biggest shake-ups in the Dow’s history. The most significant change is the exclusion of Exxon Mobil (Ticker: XOM) from the index. Oil was once the fuel of the economy. However, its seems that the oil industry is losing its importance in the economy and the stock market.
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Disclosure: Authors of this Scoop own shares of Anaplan (Ticker: PLAN).