Eating More Burritos
By Tue, Jul 7, 2020
Hey Scoopers,
The strong market recovery in China brought good news to the U.S. — More on that in the “Overall Market” section.
Beyond the overall market, it seems traders like burritos more this week compared to last week, and a bunch of executives decided to spend billions of cash on share buybacks. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, one stock got disgraced and delisted from the Nasdaq stock exchange. — 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: The indices started the week in the green. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price jumped to above $9,300 per coin, similar to the upward movement of the stock market.
A free retirement strategy you MUST see
Want to learn how to retire rich with just 3 stocks?
Get the names and tickers of the 3 stocks you need to get started.
Thank You, China
Typically, U.S. investors don’t pay too much attention to the rest of the world. After all, the stock markets in the U.S. are some of the largest and most influential exchanges in the world. However, any good news is good news, whether it’s coming from the international markets or not. The market opened Monday as excited as it was last week, this time, thanks to good news from China.
Who Can Resist Burritos?
So, what happened?
Shares of Chipotle (Ticker: CMG) were up more than 6% on Monday. As fundamental investors, we can’t tell you why Chipotle is worth 6% more than last week. The move seems to be just traders and index investors pouring money into the market and has got nothing to do with Burritos. Except that, maybe, traders are suddenly into eating more of that stuff. Who knows?!
How to trade the Ultimate Earnings Play every day
Exclusive trading masterclass reveals how to turn earnings reports into year-round income.
Presented by Sami Abusaad: Former auditor for a Big Four accounting firm. Director of Training for one of the world’s foremost stock trading educational companies. Successful pro day and swing trader averaging 12 million shares per month.
Nothing Left To Like
So, what happened?
Shares of Dominion Energy (Ticker: D) lost more than 11% on Monday. The company just sold its natural gas assets to everyone’s favorite uncle, Warren Buffett, and his Berkshire Hathaway (Ticker: BRK.B / BRK.A). Once the deal was made, financial analysts downgraded the remaining business of Dominion Energy. Accompanies with the gas assets acquisition new, the company also announced the cancellation of the Atlantic Coast Pipeline, a combined effort with Duke Energy (Ticker: DUK) to transport gas along the Appalachian trail due to rising uncertainties and delays. What’s more disappointing is the company’s plan to use almost all the money it receives from Berkshire Hathaway to repurchase stocks. This is despite the company’s capital-intensive aspirations to grow and transition to renewable energy sources by 2035. What’s going on in the head of the executives is a mystery to us at this point.
Disgraced & Delisted
So what happened?
Lucking Coffee (formerly LK), the so-called Starbucks-killer, got delisted on Monday. The young company was one of the fastest-growing IPOs in 2019. However, an investigation into the company’s books early in 2020 revealed that the company was cooking its books.
The fraud started only one month after going public in April 2019. Employees were buying tens of millions of vouchers under fake names and accounts to falsify more than $300 million in coffee sales. That’s nearly half of the company’s revenue in its first year as a publicly-traded company.
Sometimes the old wisdom that if it’s too good to be true, it’s most likely not true applies to this situation perfectly.
Were you a Luckin Coffee investor? We read all of our emails and would love to hear from you. Our email address is members@tradestocks.com.
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
