🍨 Daily Scoop: Wait-And-See Mode
By Wed, Oct 30, 2019
Hey Scoopers,
The stock market took a breather, ending Tuesday just slightly lower than where it started the day. Investors were in a wait-and-see mode in anticipation of Wednesday’s Federal Reserve meeting.
Beyond the overall market, Walmart’s sunshine warmed up one company’s stock while investors gave another stock the cold shoulder, even though it just turned a profit.
Oh, by the way, if you had one stock that spooked you so much in 2019 that it deserves to become a Halloween costume, what would it be? Let us know by Thursday.
Scroll down to the “Overall Market,” “What’s Up?” and “What’s Down?” sections to learn more.
MARKETS
- U.S. markets: All three indices ended Tuesday in the red zone, but only slightly. Scroll to the “Overall Market” section to learn more.
- Cryptocurrency: After a crazy upward jump during the weekend, Bitcoin’s price is now hovering in the mid-$9,000 range.
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OVERALL MARKET
Awaiting the Fed meeting
What happened on Tuesday?
The Fed meeting is coming up on Wednesday. Thus, investors didn’t do much on Tuesday. Some earnings reports were excellent, and some were poor. Nevertheless, the stock market zig-zagged during the day and ended Tuesday just slightly lower than where it started.
What to expect from the Fed meeting?
It’s hard to say what will happen at the Fed meeting. Not that it’s ever easy to predict the outcome of a Fed meeting. According to CMA, there is a +97% chance that we will have another interest rate cut on Wednesday.
However, there is an argument to make against the need for a rate cut too. Combine the positive earnings reports so far with the possibility of a trade deal being crafted by the U.S. and China and you may give the Feds the justification to postpone a rate cut until the next meeting.
One thing for sure, if the rate cut doesn’t happen, though, we will end up with a disappointing market. Don’t get surprised if we end up with a market deep in the red on Wednesday.
WHAT’S UP
Walmart’s sunshine
So, what happened?
Shares of GreenDot (Ticker: GDOT) were heating up on Tuesday thanks to the sunshine that is called Walmart (Ticker: WMT). We are not sure why we are using this sunshine metaphor, but seeing the stock price going up almost 15% just warmed our hearts. GreenDot will continue to manage Walmart’s MoneyCard program. Also, the two companies are about to start a financial technology lab to support innovation in the industry.
GreenDot is an underdog in the industry. It’s the technology and banking platform that powers the payment cards offered by Walmart and Uber (Ticker: UBER). Moreover, it has started to offer an innovative debit card to consumers in the U.S. using its efficient and well-oiled banking infrastructure. Investors have been too unkind to GreenDot in the last few quarters due to the company’s growing marketing expenses. As a result, even after Tuesday’s stock price jump, the stock is much lower than its 52-week high level. If the company ends up pulling off the new debit card offering, the stock has much room to grow.
By now, you have probably guessed it that the authors of this Scoop own shares of GreenDot. Why else our hearts get warmed up watching the stock price going up?
WHAT’S DOWN
Giving the cold shoulder
Shares of Beyond Meat (Ticker: BYND) were down another 21% on Tuesday. The company wowed investors by turning a profit — measured by net income — during its latest quarterly earnings. However, Tuesday was the end of the lock-up period, and it looks like the company’s initial investors are selling their shares regardless.
The lock-up period is the few months after a company’s initial public offering. During this time, private investors and employees cannot sell their shares, and they have to wait for the lock-up period to end. In the case of Beyond Meat, it seems that investors are rushing to sell their shares, dragging the stock price down, even though the company has turned a profit.
Water Cooler
Celebrate Halloween like an investor
So, what happened?
We are working on a spooky edition of The Daily Scoop, landing in your inboxes on Friday. If you want to join us celebrating Halloween, investor style, you’ve got to reply to this email with one ticker that spooked you in 2019 so much that it deserves to be a Halloween costume.
Reply to this Daily Scoop and let us know. You have until Thursday to share your spooky tickers. Go ahead, do it now.
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
