Unwanted Volatility
By Wed, Feb 24, 2021
Hey Scoopers,
Investors panicked in the early trading hours, and Chairman Powell managed to calm them down by the end of the trading day. — More on that in the “Overall Market” section.
Beyond the overall market, one augmented reality stock shared a bullish forecast for its future, while an EV stock lost a much-talked-about government contract. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, corporate Bitcoin investors have added quite unwanted volatility to their stocks. — 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: Once again, all three indices finished the day with mixed results. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price took some more beating down to $48K per coin.
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The Fed Calmed Down the Market
The Nasdaq index was down by more than 3% in the morning trading hours and the overall market challenged investors’ patience at the start of the trading day. By the end of the day, however, the situation got better as indices clawed their way back up and finished the day not too far from where that started. The Dow and the S&P even finished above zero and in the green.
Chairman Powell gave his talk to Congress and reiterated that the Fed keeps its policy on track until a stable and steady inflation rate around the target of 2% is achieved. It seems that confirmation helped calm the market in the afternoon trading hours.
Turning Faces Into Babyface
So, what happened?
Shares of Snap (Ticker: SNAP) were up by more than 12%. The company had its virtual Investor Day today and painted a quite bullish picture of the future, fueled by more-engaging video formats and new technologies such as augmented reality.
Snap has been investing significantly in its Snap lens feature. This augmented reality functionality takes your picture and morphs it into something else, maybe a cat or a babyface version. While many shy away from Snap, its performance shows that the stock can be an excellent long-term pick.
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Lost the Government Contract
So what happened?
Shares of Workhorse (Ticker: WKHS) were down by more than 50%. The company is one of those favorite SPAC acquisitions in the EV space. It was bidding for a large contract with the United States Postal Services to supply it with a fleet of EV delivery trucks. Earlier in the year and later 2020, the excitement ran faster than reality quite rapidly, and excitement about the USPS contract propelled the stock price significantly. However, the news broke that the company didn’t win the bid for the USPS contract. All hell broke loose, and the stock lost more than 50% of its value.
Unwanted Volatility
So what happened?
You can see several Bitcoin investor stocks such as Microstrategy (Ticker: MSTR), Square (Ticker: SQ), and Tesla (Ticker: TSLA) on the losers list. Bitcoin price dropped by almost 20%, and if you have billions invested in Bitcoin, inevitably, your stock would get impacted by the price of the assets you own. Corporate Bitcoin investors have opted to add unwanted volatility.
If you have any questions, or suggestions let us know by emailing us at members@tradestocks.com. 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
