🍨 Daily Scoop: The Deadline Is Approaching
By Tue, Dec 10, 2019
Hey Scoopers,
The stock market started the first day of the week on high notes. However, as we went through the day, it lost momentum and ended the day in the red. Investors are getting ready for the December 15th deadline to learn about the fate of the latest round of tariffs on Chinese imports.
Beyond the overall market, a recent IPO that is shaping the future of retail just exceeded everyone’s expectations. At the same time, investors of another recent IPO decided to take some of the gains off of the table, despite the rare fact that the company is already profitable.
Oh, and by the way, did cannabis stocks resurrect on Monday? — more on that in the “Water Cooler” section.
Also, don’t forget to scroll down to the “Overall Market,” “What’s Up?” and “What’s Down?” sections to learn more.
Market Recap
- U.S. markets: All three indices finished Monday in the red with the Nasdaq losing almost 0.5% of its value on the first day of the week. Scroll to the “Overall Market” section to learn more.
- Cryptocurrency: Bitcoin’s price is still hovering in the mid-$7,000 range.
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OVERALL MARKET
The deadline is approaching…
What happened last week?
Despite the gloomy start to December, the last two days of the week saved the market. A small upward movement on Thursday, followed by a big leap on Friday, turned the early gloom to boom. We finished the first week of December almost flat. Phewww…
What happened on Friday?
Earlier in the week, there were talks of economic recession. You couldn’t open the website of any financial media and not come across at least one article talking about how billionaire X or hedge fund Y is preparing for a major stock market decline in the near future. The cautionary tales scared the market for a few days in a row.
Came Friday, and a strong unemployment report by the Bureau of Labour Statistics renewed confidence in the U.S. economy, and the stock market gained back all that it had lost in December.
WHAT’S UP
Exceeded everyone’s expectations.
So, what happened?
Shares of Stitch Fix (Ticker: SFIX) were up more than 17% on Monday. The company is on a mission to shape the future of retail with an AI-enabled clothing curation platform. The company announced its latest quarterly earnings, and it exceeded everyone’s expectations, 17% more active users, 21% higher revenue, and losses of less than a penny a share.
WHAT’S DOWN
Taking money off the table.
So, what happened?
Shares of InMode (Ticker: INMD) were down more than 9% on Monday. The company minimally-invasive surgical aesthetic and medical treatment solutions in the United States. This is a new IPO that has had a fantastic start in 2019 as a publicly-traded company because of its rapid growth and profitability. The decline on Monday wasn’t operationally related. It can be only due to investors locking gain and taking the profit off the table.
WATER COOLER
Did cannabis stocks resurrect on Monday?
What does that mean?
2019 has been a brutal year for cannabis investors. From the illegal operation by CV Sciences (Ticker: CVSI) to the firing (ahem, resignation) of Bruce Linton from Canopy Growth (Ticker: CGC), the excitement bubble is deflated.
On Monday, the story was different. The green arrows were everywhere. The positivity was partially thanks to the legalization of recreational cannabis use in Michigan. The additional excitement came after investors heard about the arrival of a new CEO at Canopy Growth. The new CEO is the current CFO of Constellation Brands (Ticker: STZ), a $5-billion investor in Canopy Growth. The assignment might have given the stock market investors the confidence that large global brands such as Constellation Brands are still confident about the future and the potential of the industry.
While we may have seen a few green arrows in the cannabis sector, the industry is still far from growing into its valuations. Monday’s upward movement is not quite the resurrection we are all hoping for.
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
