🍨 Daily Scoop: The tide is turning
By Wed, Sep 11, 2019
Hey Scoopers,
The calm before the storm continued, while a few winners emerged in the market. Notably, a few next-generation retailer stocks got boosted on Tuesday. However, the story is not as exciting as it could have been had these stocks haven’t already dipped significantly in the weeks leading up to yesterday’s rally. Also, it looks like the trend has reversed and American companies are starting to replicate Chinese counterparts. Wow, how the tide is turning!
We got all those stories and more in the “Overall Market,” “What’s up?” and “What’s down?” sections. Scroll down to read.
MARKETS
- U.S. markets: On Tuesday, the stock market didn’t budge that much again. A few decimals point up, and a few decimals point down. Scroll to the Overall Market section to learn more.
- Cryptocurrency: Bitcoin’s price is where it was in the last few days — slightly higher than $10,000. There is not much happening in the cryptocurrency market these days. It’s most likely another calm before the storm.
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OVERALL MARKET
Why is the price of gold up?
What happened on Tuesday?
In a two-day streak, the stock market continued steadily — not a big jump, neither a rapid fall. The S&P 500 and the Dow inched higher, and the Nasdaq finished in the red zone by just -0.04%. Everyone is just waiting to see what’s going to happen to the U.S. economy, and how the world economy follows along in the next few quarters. Apparently, even the Chinese and the Russians are getting worried about the U.S. economy and buying up gold to reduce their overall exposure to the U.S.
What’s so surprising?
It’s so interesting to this editorial team that Gold still plays such an important part of the countries’ overall financial decisions. In this day and age that everyone is beating the drum of the cashless society and the rise of digital currencies, it’s good to pause and see how old habits and traditions die hard. Gold is still the fallback option for investors to hedge their risks, even if the investors are the head of the central banks at some of the largest economies in the world.
P.S. The latest survey results and report by the World Gold Council is worth a read.
WHAT’S UP
Next-Gen Retailing is on a Roll! Or is it?
So, what happened?
Shares of Revolve (Ticker: RVLV) — a fashion-retailer focused on millennials and Gen Z consumers during — were up 12% on Tuesday. The story wasn’t that different at Stitch FixTicker: SFIX) which sells curated fashion items over mail. There wasn’t any specific good news boosting these stocks. It looks like investors are just buying the dip. Both stocked were hammered in August. We see some buy-the-dip, deep-pocket investors jumping in to snatch growth stocks at lower prices.
What’s down?
Cybersecurity is falling out of favor
So, what happened?
Zero-trust, cloud-native cybersecurity platforms are not having a good few months. On Tuesday, ZScaler (Ticker: ZS) announced its 2019 Q4 quarterly earnings. The revenue was up 53%, but the company shared a less-than-stellar outlook for its new fiscal year. The stock price dropped by 20%. While 53% revenue growth is no laughing matter, but when you are a growth stock, you can’t slow down growth, otherwise investors punish you for it.
WATER COOLER
Let’s copy the Chinese
It’s a widespread belief in the U.S. that the Chinese have been mimicking our big shiny companies. We go to the length of accusing them of stealing our intellectual properties. But the tide is turning!
Starbucks’ (Ticker: SBUX) CEO just announced that the company is opening a pick-up-only store in New York. For those of you who follow the growth of coffee in China know that this is exactly what Luckin Coffee (Ticker: LK) does. In just a few quarters, Luckin Coffee has built a coffee empire in China, all thanks to the power of mobile orders and pick-up in-store offerings.
Once priding itself in being the third-place, Starbucks is not mimicking its Chinese rival to adapt to the changing consumer demand. As investors in Starbucks, we are super excited to see how flexible Starbucks is in experimenting with different models. Rapid experimentation and mimicking success is the best way of learning.
Now, the question is whether the Chinese media are bashing the Americans for stealing their ideas? If you are Chinese or can read Chinese and know of an article bashing Starbucks for replicating Luckin let us know. What’s d love to hear the story. Reply to this email and tell us the story.
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
