We Need More
By Thu, May 14, 2020
Hey Scoopers,
The Fed’s chairman warned that the economy needs more support, and, in response, investors took some of their recent gains off the table. — More on that in the “Overall Market” section.
Beyond the overall market, excitement about autonomous trucks sent a shell company’s stock price to the roof, and advertising budget cuts dragged the stock price of another. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, who would have thought that Mickey the Mouse is so high maintenance. — 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: All three indices finished in the red zone. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price surpassed the $9,000 per coin level.
The market may seem like a bit of a mess right now, but we are seeing some clear winners and losers at the sector and individual stock level. The weight of the evidence suggests that there will be winners on the long side as well as the short side, and then a lot of stocks in the middle that don’t look like they’re going anywhere anytime soon.
One easy way to view that is through our five Bull market barometers, which tell us whether we’re in a bull or bear market.
As a result of that data, we’re focused on the best opportunities on both the long and short side.
We’ll be sharing that information live during our weekly COVID Market Watch Update this Thursday at 4pm EST/1pm PST.
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We Need More.
The stock market indices continued moving downward as the hopes for reopening the economy got dampened further. The Fed’s Chair warned investors that additional stimulus and support is required to avoid permanent damage to the economy. In response, investors decided it’s time to lock some of their recent gains, and the market sell-off continued for the second day in the row.
Excitement About Autonomous Trucks
So, what happened?
Shares of VectoIQ Acquisition Corp (Ticker: VTIQ) were up more than 11% on Wednesday. The stock price has been moving up rapidly in the last few days despite lacking operational data and history. VTIQ is just a special-purpose shell company that has become the talk of the town due to the excitement around its merger with Nikola Motor, an autonomous truck startup. It’s a hot stock for risk-taker investors that would want to bet on the future of autonomous trucks.
If you bought on the WORST day you made 400%
Stansberry says this new trend is going to cause tens of millions of people to lose their jobs… it will also cause many major bankruptcies… yet at the same time it will make millions of others, incredibly rich.
Don’t get left behind. Get the facts for yourself here.
Low Advertising Budgets
So, what happened?
Shares of the Trade Desk (Ticker: TTD) were down more than 5% on Wednesday. The stock has been a hot-flyer for quite some time because the company’s programmable TV advertising platform has been growing rapidly in the last few years as advertisers move to more data-driven decision-making. However, COVID-19 has put a big dent in the global advertising budget, and Trade Desk’s stock price is reflecting that very well.
The negative reaction to the COVID-19-induced advertisement budget cuts is justified in the short-term as it will slow down the company’s revenue growth in 2020. However, long-term investors know that the company is profitable, and has no cash concerns in the short-term. Also, the inclusion of Amazon’s (Ticker: AMZN) advertising opportunities in the company’s platform should not be dismissed as a major driver of growth in the future.
Mickey Is So High Maintenance.
So what happened here?
Every month The Walt Disney’s (Ticker: DIS) theme parks stay closed, they cost the company an estimated $1 billion in lost revenues. Among all global theme parks, only Shanghai’s Disneyland is open, and not even at full capacity due to the required social distancing measures. Who would have thought Mickey the Mouse and its castles are so high maintenance.
What’s hard to figure out is when the customers feel confident to take their families to Disneyland. The parks can start reopening in the next few weeks, but will the customer show up?
When do you feel comfortable to take your family to Disneyland? Let us know by emailing us at 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
