Latest news with #memeStocks
Bloomberg
a day ago
- Business
- Bloomberg
Live Q&A: How Trump's Immigration Policy Is Impacting the US Economy
On this episode of Stock Movers: - GoPro (GPRO) shares surge along with Krispy Kreme and Beyond Meat. Wall Street has been captivated in recent days by the resurgence in a handful of stocks popular on the WallStreetBets page of Reddit, known for sparking past bouts of meme-stock mania. Daniela Hathorn, senior market analyst at says the surges have been driven by a mix of social media buzz, short squeezes, and technical breakouts, despite little to no change in the companies' underlying business fundamentals. - Morgan Stanley (MS) shares are little changed after news of being probed by the Financial Industry Regulatory Authority over its vetting of clients for the risk of money laundering. That's according to Wall Street Journal reporting. - Texas Instruments (TXN) shares plunge after the company issued a third-quarter forecast that was more guarded than some investors had anticipated. The main concern is whether tariffs and trade disputes will hurt a sales resurgence, with executives acknowledging they don't know how much of the 16% revenue jump came from tariff-related "pull in."
Yahoo
2 days ago
- Business
- Yahoo
Watch These Kohl's Stock Price Levels as Retailer Becomes Latest Meme Play
Kohl's Corp. (KSS) shares soared Tuesday in the absence of news on the retailer, a move reminiscent of the meme stock frenzy of 2021. The shares likely received a boost from a short squeeze, given that nearly half of Kohl's float is held by short sellers. Tuesday's trading action echoed the meme-stock rally of four years ago, when Reddit users targeted heavily shorted retail stocks, including video game seller GameStop (GME) and movie theater chain AMC Entertainment (AMC). Kohl's shares closed 38% higher at $14.34 on Tuesday, its highest level since December. The stock, which more than doubled early in Tuesday's session, has now inched back into positive territory for 2025. Below, we take a closer look at Kohl's weekly chart and use technical analysis to identify major price levels that tactical traders will likely be watching. Volume Signals Meme-Driven Trading Activity After bottoming out in early April, Kohl's shares trended steadily higher before today's pop. It's worth pointing out that about 183 million shares traded hands by 2:20 p.m. ET on Tuesday, about 25 times the stock's 25-day moving average volume, indicating meme-driven trading activity. While the stock has rallied above the 50-week moving average, the relative strength index remains below overbought levels, providing ample room for further speculative buying. Let's identify three overhead areas on Kohl's chart to watch if the buying frenzy continues and also locate a key support level worth monitoring amid the potential for profit-taking. Overhead Areas to Watch The first overhead area to watch sits around $29, This location finds a confluence of resistance from the nearby 200-week MA and a trendline that connects multiple peaks on the chart between June 2020 and April last year. Buying above this area could spark a rally toward $45. The shares may run into selling pressure at this level near a series of troughs on the chart stretching from August 2019 to January 2022. The next higher area to track lies at $64. A surge into this region would likely face significant resistance near several peaks that formed on the chart between March 2021 and April 2022. Key Support Level Worth Monitoring During volatile profit-taking events in the stock, investors should monitor the $11 level. Tactical traders could see this location a high probability 'buy the dip' area near the 2020 pandemic low and a period of brief consolidation in February this year. The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info. As of the date this article was written, the author does not own any of the above securities. Read the original article on Investopedia
Yahoo
5 days ago
- Business
- Yahoo
Better Trump-Connected Meme Stock: Newsmax vs. Trump Media
Key Points Newsmax is dealing with growing pains and unpredictable legal expenses. Trump Media's core business is withering as it tries to launch a crypto ETF. Newsmax has cooled off, but Trump Media still trades at frothy valuations. 10 stocks we like better than Newsmax › Newsmax (NYSE: NMAX) and Trump Media & Technology Group (NASDAQ: DJT) are both closely associated with President Donald Trump. Newsmax, which bills itself as a conservative alternative to mainstream media networks like Fox News, is popular among Trump supporters. Trump Media, which was co-founded by Trump, owns the social network Truth Social and the streaming media platform Truth+. It aims to be an alternative to larger social media platforms. Both stocks, through their association with Trump, became meme stocks shortly after their public debuts, trading on emotion. Newsmax went public via a traditional initial public offering (IPO) on March 31, and it soared from its debut price of $10 to a record closing price of $233 the following day. Trump Media went public by merging with a special purpose acquisition company (SPAC) on March 26, 2024. It started trading at $70.90 -- which marked a 42% gain from its premerger closing price. But today, Newsmax and Trump Media trade at about $14 and $18, respectively. Both stocks crumbled under the weight of their skyrocketing valuations. But which is the better buy? Newsmax faces a lot of near-term challenges Newsmax operates both linear TV and digital streaming channels, and it generates most of its revenue from ads, cable licensing fees, and subscription fees. It claims to reach 40 million Americans through its media channels and print publications. Nielsen data from April found that Newsmax was tied with Fox News among 35- to 64-year-old viewers for "prime engagement." Newsmax's viewership grew significantly during the first Trump administration, but it was also criticized for promoting conspiracy theories regarding the 2020 elections, the Jan. 6 attack on the U.S. Capitol, and the risk of COVID-19 vaccines. Voting system makers Smartmatic and Dominion sued Newsmax over its claims about the 2020 election. It reached a $40 million settlement with Smartmatic last year, but it hasn't settled with Dominion yet. In 2023, Newsmax's revenue stayed flat at $135 million as its net loss more than doubled to $42 million. That slowdown was largely caused by DirecTV temporarily dropping its channels in a carriage fee dispute. Newsmax had wanted to transition from a free-to-air model to a paid one as its popularity grew, but DirecTV rejected those new carriage fees. Newsmax eventually agreed to revert back to its original free model (and earn a split of the carrier's ad revenue) to return to DirecTV. In 2024, Newsmax's revenue rose 27% to $171 million as the U.S. election cycle heated up again and drove more viewers to its linear and digital channels. However, its net loss widened to $72 million as its settlement with Smartmatic and the costs of expanding its infrastructure to handle its growing audience crushed its operating margins. In the first quarter of 2025, Newsmax's revenue rose 12% year over year to $45 million. It narrowed its net loss from $51 million to $17 million, but that was mainly due to its easy year-over-year comparisons to the Smartmatic settlement. Analysts haven't provided any forecasts for the rest of the year, but it could face a lot of pressure as it laps the election, ramps up its spending, and deals with the legal costs in its ongoing dispute with Dominion. Trump Media is still leaving its investors in the dark Trump Media generates most of its revenue from Truth Social, but it doesn't disclose its monthly active users (MAUs) or any other core social media metrics. According to it only served 6.3 million MAUs this January. It recently launched its Truth+ streaming media platform, but the Android version of its app has only been downloaded about 50,000 times. Rumble (NASDAQ: RUM), the conservative-leaning streaming video platform, says it reached 59 million MAUs in its latest quarter. In 2023, Trump Media only generated $4.1 million in revenue as it racked up a net loss of $58.2 million. In 2024, its revenue declined to $3.6 million as its net loss widened to $401 million. That decline was caused by Truth Social's stagnating growth, competition from bigger social media platforms like X and Meta Platforms' Facebook, and a renegotiated ad revenue sharing deal with an "undisclosed" advertising partner. Its massive net loss was caused by its ballooning stock-based compensation expenses, higher legal costs, changes to how its warrants and convertible debt was valued, and soaring interest charges on its debt. In the first quarter of 2025, Trump Media generated just $821,000 in revenue with a net loss of $31.7 million. But in early July, it submitted a filing for a new crypto exchange-traded fund (ETF) that would bundle Bitcoin with several other cryptocurrencies. If approved, that ETF might boost its cash flows while diversifying its business away from its sluggish social networking and streaming media businesses. The better buy: Newsmax With a market cap of $1.85 billion, Newsmax isn't cheap at 11 times last year's sales. But it's more reasonably valued than Trump Media, which is worth $5.13 billion -- or 1,475 times last year's sales. So while Newsmax's future is still murky, it certainly looks like the better buy. If you believe Newsmax will keep gaining more viewers in this politically divisive environment, pull more viewers away from Fox News and other mainstream media networks, and resolve its legal issues, it might be worth nibbling on. But if you don't think it can check all three boxes, it might be too risky to buy. Should you buy stock in Newsmax right now? Before you buy stock in Newsmax, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Newsmax wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,056,790!* Now, it's worth noting Stock Advisor's total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 15, 2025 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Leo Sun has positions in Meta Platforms. The Motley Fool has positions in and recommends Bitcoin and Meta Platforms. The Motley Fool has a disclosure policy. Better Trump-Connected Meme Stock: Newsmax vs. Trump Media was originally published by The Motley Fool
Yahoo
08-07-2025
- Business
- Yahoo
Meme stocks vs. fundamentals: Where you should invest
Listen and subscribe to Stocks In Translation on Apple Podcasts, Spotify, or wherever you find your favorite meme stocks just noise or the market's new normal?In this episode of Stocks in Translation, Investopedia editor in chief Caleb Silver joins Yahoo Finance Senior Reporter Allie Canal and Producer Sydnee Fried to discuss the resurgence of meme stocks and how investors should be approaching the market in this ever-changing landscape. Silver uses Palantir (PLTR) as an example. While many consider it a meme stock, Silver argues the data analytics software company has become more established, especially as it continues building ties with both corporate America and the US government. Later on, the trio takes a look at bitcoin (BTC-USD) and the future of cryptocurrency in the United States. Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service. Welcome to Stocks and Translation, Yahoo Finance's video podcast that cuts through the market mayhem and noisy numbers to give you the information you need to make the right trade for your portfolio. I'm your host Ali Cannell in for Jared Blickery, and with me today is the wonderful Sydney Freed, AKA the voice of the people. Kindly like, subscribe, and comment on stocks and translation on Spotify, Apple Music, Amazon, or off today's show with our phrase of the day, and it's a fun one, meme stock. Yep, we're talking about those buzzy crowd-driven stocks that often skyrocket not on fundamentals, but on vibes and a whole lot of social media hype. And despite plenty of economic uncertainty, stocks are still trading at record highs as we move into the back half of the year. And mean stocks, well, they're making a comeback. Pallantti and Super Microcomputer, once written off as speculative trades, are now some of the top performing names of the year and our number of the day. It's 1984. That's the year GameStop was founded. Of course, GameStop became one of the first and most notorious meme stocks when it went viral in January 2021, thanks to Reddit fueled retail investors who turned Wall Street on its what is it about these stocks that keep investors coming back? We'll dig into the power of word of mouth investing, the psychology behind social trading, and why chasing trending tickers might actually say more about market mood than market math. So here to help break this all down is friend of the pod, Investorpedia editor in chief Caleb Silver. Welcome to the show, Caleb. We have spoken before, but not on this show, so I'm very excited to have you. Thanks for having me. Good to be back. Yeah, so there's a lot to talk about with this market, right? We were just saying stocks at record highs, but there are a lot of your bird's eye view of what's happening rightnow? Yeah, it looks really good on top. This kind of reminds me of the soft serve ice cream with all the sprinkles on it. You take a couple of bites, the first couple of bites are awesome, and then you're like, whoa, this is actually not so good as you get underneath it. But you can't ignore the momentum and ignore the rally because it has been pretty broad. It's not just the mega caps. It's not just the mag 7. You see a pretty broad-based rally here into overbought conditions for most sectors of the market right now, not maybe not consumer discretionary, maybe not utilities because those are defensive you've seen a broad-based momentum and you have what we call the technical analysis like to call the golden cross. When the 50 day moving average crosses the 200 day moving average, stocks more stocks advancing and declining, you can't ignore the trend, but it has brought a lot of froth and a lot of speculation, as it always does, because you're always swing too far in one direction. Right? And that's a bullish signal the cross there. But do you think the market has become a little too frothy? You were mentioning the broadening out on a sector basis, but on an individual company level, do we still need toSee more gains there to ease some of those investor fears. Itdepends what sector of the market you're looking at right now, but if you go top to bottom here, looking at tech, big tech, take it down to materials, which have also done pretty well lately, and uh and some of the other sectors, they're all kind of pretty strong. We don't have a ton of stocks at record highs even though the market is at or near a record high, but we're getting there and some of the most popular stocks are making record highs, and guess what? Those are the ones that most individual investors own the Nvidias of the world, the Palantirers of the Microsofts and even the apples of the world, and Apple hasn't had a great year, hasn't had a great 3 years, but still one of the most uh widely owned stocks in the market. So should peoplejust keep piling in, or are we missing something? Yeah, people keep piling in. Guess what we do every 2 weeks. We pile in, right? Who changes their allocation in their 401ks? Who changes their allocation in their IRAs on a biweekly, monthly, quarterly basis? We barely change it every single year. So guess what? We keep buying the same stocks, we keep buying the same index funds. We all own the you do have an overconcentration. The good news is the overconcentration has broadened out beyond the Mag 7. So you see other stocks making their way into this new group of what will be probably the most important companies over the next 5 to 10 years. What aresome of those stocks that are making their way in besides the Mag 7? Yeah, well, Palanter is number one. Pallanter is the best performing stock in the S&P 500 so far this year. Proximity to power always helps. They're very in deep with the US government, so that's pretty popular. But you also see other other companies rising up. Microsoft's Meta obviously has done pretty well. Uh, even in Alphabet has performed well as it gets out of the search business. So a lot of those popular stocks are doing well. But then you see what the institutions are buying. They're buying stocks like a Lamb Research and Eli Lilly, so you see momentum in those sectors as well. Pallanter confuses me. The trading volume, as far as I can see, is always massive, but then there's no news. So is that, that's like the meme stock? Is it still considered a meme stock, I would ask. I don't think so. I, I think I would consider the US government they have tons of contracts with the US government, Department of Defense, and across corporate America right now. I think they're well beyond meme stock. I think they're pretty established, but like you said, if you don't understand what they do, most people don't understand what Palantirer does, but they do a lot of data work for the US government. And it's an AI play as well, correct? Or do you think the trade is mostly happening on the because of the governmentconnection? I think it's got all the right things in its favor, right? It's doing it has government contracts. It's got government contracts around the world. It's contracts with some of the biggest corporations in America, but it's using AI for productivity. I like to look at a stat, a revenue per employee, how much revenue sales companies are ringing out of their employee base. That's one of those that has a super high ratio because it's so profitable, makes so much money, but doesn't require a lot of people. Nvidia is like that as well. Apple's the number one company when it comes to revenue per employee. So when you see these companies with these massive margins, smaller and smaller workforces using AI as a productivity tool, you know, their profits are guess what we pay for as investors? Rising profits, right? And I want to get into the institution versus retail side in just a bit, but question for those that maybe haven't bought the market yet. We're at record highs. Do you buy right now? Do you wait? Do you book some profits? What's your advice to investors? Yes, who you are, where you are and what your plan is. But we always say at Investopedia, the best day to start investing was yesterday. The next best day is today. I don't care if we're at record highs. I don't care if we're down 10%. If you're going to be in this for 10+ years, start keep buying and keep accumulating, build big positions in your favorite stocks or indexes, ride through the waves, and if you've done that this year, you've done very well despite all the headline risk and that 19% drop we've had. If you've done that over the last 5 years, you're doing fabulously well. If you've done that over the past 20 years, you got to be a millionaire plus buy now because you have to be invested and you have to keep investing in this market in order to generate those compounding returns. Investopedia has like an investor sentiment survey. It shows 24%.are pulling back and 28% think there's a 10+% drop coming. Where, where is thatcoming from? Because we're always paranoid. We always think something's going to happen. But given the headline risk, you can understand it. We saw the market drop 19% right after so-called liberation Day because of all the fears that turned out to be maybe more smoke than fire. We'll see. We're not at July 9th yet, but we're creeping up on it and anything can happen. But we get scared sometimes, or we say we're scared, but we don't you do, and we've seen that in the past with the soft data coming in below expectations, but then the hard data continues to be resilient. Yeah, hard data on top, headline numbers look fabulous, and people say they might be scared. We saw the institutional sentiment surveys that said institutional investors were very cautious right now, long cash. Even individual investors who said they were cautious didn't get out of the market, even when the VIX was high and the market was low. A lot of them bought the dip. And to that point, you have an emoji reader meter here for Investorpedia and you sayReaders are cautiously optimistic as we head into the backup of the year, but we were talking a little bit about institutional investors, retail investors, and there seems to be a bit of a disconnect there. It seems to me that retail investors, they're driving this rally and sort of pulling the institutions along with them. So why do you think we're seeing that disconnect right now and what's your view on what that means as we round out 2025? Yeah, remember that in retail investors like us, we're 22% of the market when we're all the market, so we can move it just not that much. That said, we're not managing other people's money, right? We're not worried about losses, trying to protect gains, trying to be tax efficient all the time necessarily. If you're an institutional money manager, your job is to make sure that you don't lose your client's money job #1. #2, make sure you don't get left behind in the rally. So they're cautious by definition because they're protecting gains. They're protecting their clients from the unknown, but they're also slow to react to the trend moving in the other direction because they gotMuch money to move at one time. So we move it and we're louder as as retail investors. We're out there on Reddit, we're out there on social media talking about it. Institutions move a little quietly. They move lots of money very quickly, but they are, they don't move into trends as fast as retail investors because they got to do it methodically and tax efficiently. Maybethis is a silly question then, because I was gonna say who leads buying of different things, because to me it would seem like it would be institutions that are like have all the data and the research and they're trying to make money for their clients, butAnd you're telling me they're, they don't go to the trends as quickly. Is that more like a meme thing like for retail investors, it's easy to be like, we pick GameStop and just drive it, whereas they're obviously going to be hesitant. So is meme stocks the only area where retail kind of leads institution? Yeah, I would say so. And also sometimes in the cryptoverse you see that as well, but definitely on the meme stocks because you know people are making noise about stocks that really aren't profitable, sometimes even pre-revenue, you see a stock like a lot of the ones that we've been tracking over the last that are up 300, 400%. You've never heard of these companies. I've never heard of these companies. And then there's companies that you have heard of, like in Avis that stocks up over 100% this year on what? On what news? Are we renting more cars all of a sudden than we used to? Are they rolling out a new line of EVs? No, it's just a stock that gets treated, uh, like a chew toy in in the Reddit universe and also on social media. When you get a lot of momentum in these smaller volume stocks, right, with smaller, uh, uh, share prices, a lot of them in the Russell 3000, they can.A lot quicker. So yeah, that's where we move a lot quicker than the institutions, but algorithms drive the market by and large, right? They are buying signals or selling signals that are triggered almost every single second by every single word that comes out of anybody's mouth where institutions have these hard and fast rules. When these conditions happen, we do this, and they move a lot faster than we can because when you and I buy or sell a stock, it's got to get looped in with a bunch of other orders of the same magnitude, same price, so you get a lot of 10,000 and then that stocks eventually traded. So why do we have the delay? We don't have of tradingpower. And when we're talking about meme stocks and the momentum trades that we've been discussing, I wonder if it's because retail investors, they're typically younger, they have a shorter time horizon. Maybe they're just used to this V-shape recovery stocks bouncing back. You can look at COVID. We had a pretty quick recovery from then, the April lows, same thing. Do you think there's an element of maybe they don't know how bad things could get? So stocks always usually goup? Yeah, they've they've had the experience. Think about it from 2008 all the to today, we had some, I mean, 2008, 2009, the great financial crisis was a reckoning. A lot of people started investing, but then they saw what the government did in terms of flooring interest rates and raining money down on everyone. That happened again during COVID. And guess what? We had a cute little bear market for a couple of weeks and then we were back to the races because we had money and time on our hands. But also younger investors, especially new, younger, and more traders and investors. This is a little bit like sports gambling to them, right? So they'll take a flyer on a might be pre-revenue, pre-profit. Nobody's ever heard of because they're hearing about it. Not that big of a loss if they didn't get in too hard on it. And they're taking chances. They're taking bets versus saying, let me build myself a long term established portfolio that I can ride into my retirement. Very few people, especially younger generations, are thinking that way in the early part of their investingjourney, right? Because I think the great financial crisis left a little bit of scar tissue, I would say, on some millennials out there. But hold that thought, Caleb, because we're going to take a short break, but we'll be right back to Stocks in Translation. We're here with Caleb Silver. We were just talking about meme stocks as momentum trade, but I want to get your viewpoint on another risky asset, and that is Bitcoin. We're seeing record highs there as well. I cryptocurrency, it's gone through waves. It feels like we're in this period of momentum as we've been discussing the entire show. So what's your view on cryptoright now? Yeah,In cryptocurrency's favor. I was at Bitcoin 2025 in Las Vegas. The vice vice president showed up. Uh, the president's sons were there touting their new decentralized finance platform and their, their crypto trading platform. So they're all in. And when you have that type of easy regulation and favoritism from the government, well, it's green lights. But if you've also noticed lately, Bitcoin has gone through this resurgence where it's not just retail andInvestors who are buying it, big companies are adding it to their treasuries by the billions, right, to grow their treasuries and have something that's separated from the dollar denominated currencies that most of them do business in. Why would they want to do that? Well, if you own Bitcoin in your treasury, let's say you have, you know, $500 million worth of Bitcoin in your treasury, Bitcoin goes up 10%. That makes the overall value of the assets, part of your balance sheet look a so you've seen companies do that from the black rocks of the world, which owned billions of dollars in Bitcoin to the GameStops, which just an offering so it could free up cash to buy $500 million in Bitcoin. They're loading up their treasuries. Now we had this big rally in Bitcoin when the spot Bitcoin ETFs were approved finally and we can now own them in our 401ks and in our portfolios, and that drove a lot of retail interest in right now the institutions are all in and they're building their own war chests of Bitcoin before the supply runs out because there'll only ever be 21 million Bitcoin ever printed. So we're at around 19, 19.5 million or so. They want to make sure they own as much of it as possible because they see a further deregulation or an easing of regulations into this industry to bring cryptocurrencies into the financial services sector. PS, it's already here. This is gonna sound really stupid, but can't companies do this with anyStock, like they're, they're just they're they're supporting their balance sheet with crypto, if they believed, let's, I'm gonna throw a random name out there, if they believed Apple was gonna go up a ton in the next 10 years, can't they just do that with the stalk or is there something different about Bitcoin. Bitcoin has a limited supply, so that's one of the reasons, and they see how widely it's being adopted, so it's also a hedge against the other types of regular assets they might have in their portfolios. And you see other companies all the time, but you know what they mostly do? They buy back their own stock, best use of their cash for the most part, more tax efficient way for them to actually return cash to shareholders also kind of props up the PE, the part of the equation in PE, because if you take shares off the table by buying them back, your profits look a lot better. So what do you think of the crypto strategy of a company like Strategy, which owns a ton of Bitcoin? Does that make you nervous as an investor? No, aslong as they areThey are, who, who they say they are, and they have decided very clearly. Michael Saylor has said, no, we are basically a Bitcoin treasury company. No need to play around with the other businesses that required a lot of people to manage, required contracts with other companies. No need to play around in that area when we can just ride the wave of all our Bitcoin holdings, and they've been buying it for years and years. So you got to imagine their average price is pretty low over there. All in. And as long as you're saying that's what we do, we are all in on this, and if you buy our stock, you're basically betting that's a proxy. But it's very volatile, so it, it scares me a little. Maybe I'm not understanding it completely. When Bitcoin tanked, didn't it go to like from 100 to like 70,000. So that's a, that's a big swing and yes, it did recover, but it still makes me skeptical. Sure, but if you don't have a stomach, you're not allowed to cryptocurrency, right? You can't crypto Bitcoin has gone through 50% crashes multiple times since 20.14 or so, right? We've seen that happen multiple times, but guess what's happened after that. It just keeps rising. The chart goes up and to the right, mostly because people want to keep owning it and especially as it becomes more widely adopted and more widely used and America becomes the so-called crypto capital of the world. Everyone wants their coins. They want their own piece of it. And so, yeah, it does crash, but so do stocks and so do other asset classes. Bitcoin has been like any other asset class we've ever seen in the history of the financial never seen anything like the charts that it's produced and the riseof stablecoins as well helping to boost the overall crypto sector. But you did say in your notes to us that rise in risk assets, which include Bitcoin, that that points to a fundamental problem inside the economy. So what is that problem? Theproblem is that as I said earlier, lots of sprinkles on top, tasty, the top of that ice cream cone, but once you get into it, you see I hate whenI lick all the sprinkles my ice cream. I will say what do I have? I got a what do you have? You have an economy that's slowing, right? We only grew at a 0.5%, 0.5% in the first quarter coming off at 2.4%. Some of that was, you know, uh, concerns about tariffs, companies pulling back on manufacturing, pulling back on capex, pulling back on industrial production in general. So the economy is slowing a little bit. We got a decent jobs report. Jobs were 147,000 added kind of bang on on average, but if you look inside the numbers in the private payrolls report, that actually fell for the first time last month and you're seeing big announcements from companies like the Microsofts of the world they're laying off 8000, 9000 people, and that's not a lot, given the size of its workforce. I think fundamentally it's not as strong as we think it is. Small businesses will tell you that. And I think if you look inside the balance sheets of most Americans right now, well, the top 10% are doing fabulous. More millionaires than ever were produced last year, rising stock prices and rising housing prices. That just makes you richer and richer. But most people don't feel that, so under the surface, not so great. Well, when did thecrowdbreak the ice. We haven't seen it so far. When westop spending and guess what? We're really good at spending. We really have a hard time stopping our spending, and especially as things become more expensive. And so far we haven't done that yet. We have kind of rising credit card delinquencies, but they're not where they were during the great financial crisis. We have rising mortgage delinquencies again, nowhere near where we were in the past, and wages have increased, people have gotten used to higher costs in general, but two big things have happened lately, right?Egg prices have fallen and gas prices have fallen. What are the two things we buy almost every single week? Gas and eggs, right? And those make you feel like you have a little bit more money in your pocket when you're not spending $60 on the fill up, you're spending $35 on the fill up. But when we stop spending, that's when the economy really slows, and that's when the wheels start to come off a little bit. I haven't seen that yet. So if there could be cracks to come, potentially, what are some hedges that you hear about the people like getting into? Is it gold? I mean, is crypto crypto is kind of a hedge sometimes. Yeah, they used to say it was a non-related asset. I don't believe that anymore. Look at the stock market and look at crypto right now. They kind of march to the beat and that beat is gone, right? But what does well, well, sometimes short term treasuries do well. We saw how big move to that earlier this year during a lot of the terror of madness, so a lot of people moving into the short term paper that makes a lot of sense, but also utilities do really well in, in an environment like that. They kick off nice dividends, we always pay our utility bill, right, every single month. So you saw that doing well and Staples did well. Now you're seeing the reverse of that, right? Now you're seeing aggressive growth, uh, do pretty well again, momentum do very well again, cryptocurrency doing pretty well again. So anytime you see fear, you see safety trade back on and gold has been a big part of that. There were multiple record highs for gold going into just this month. All right, I want to switch gears to a segment that we like to call lost in translation, where we get our guest takes on what the market might be misunderstanding and something that you find people are not quite getting right is tokenization. So talk to us a little bitabout that. Yeah, tokenization is happening across the capital markets and what do I mean by that? Well, in cryptocurrency, lingua franca tokenization basically is creating actual assets in cryptocurrency or in crypto tokens. So last week we saw an announcement by Robin Hood saying it was going to sell tokens uh for stocks like uh OpenAI doesn't even have a stock yet, private companies like OpenAI. So investors kind of trade alongside of the progress of that company. But ultimately, and if you, if you listen to my good friend Rick Adelman and the Truth About Your Future, you know that all companies are moving towards tokenization in their physical assets. So we get 24/7 round the clock stock trading, it'll be based on the tokens of these stocks, not the actual stocks themselves, the proxies for these and all that will happen on the blockchain. So you will no longer own 10 shares of your favorite company, you will own tokens that represent the shares of your favorite companies, and they will trade 24/7 just like cryptocurrency. We're seeing that across sectors right now. All these about stablecoin adoption and allowing stablecoins, the stable act, allowing stablecoins into our banking system that paves the way for more transactions and more trading in cryptocurrencies just like the regular assets that we've been trading for the last 100 years. This isbringing my mind back to the NFT craze from a few years ago, but then it seems like that went away. We don't hear about NFTs anymore. Right, and NFTs because there was really nothing beyond that, you know, if you, you bought a, a, a work of art, you didn't even have the rights to display it necessarily. You basically own the rights, but the rights are not as important as having something that can be transferred into fiat currency. And one thing we're starting to see as well, especially with Bitcoin, but other cryptocurrency holdings, we're seeing lending institutions that I'm talking about established lending institutions allowing you to your crypto holdings, right? You can now borrow to buy a house against your Bitcoin holdings if you didn't have basically good credit necessarily or you didn't have other means to raise the cash, but you got into Bitcoin 10 years ago and you're sitting on a few million bucks. You can borrow against it for fiat currency, put a down payment on a house or even buy a house outright. So it's in our system right now, tokenization is just the next step where all of a quite real anymore. We're just trading the, the, the token manifestations of our asset classes. All right, the token manifestation. Good to know here, Caleb. Thank you so much for joining us, and we're winding things down here at Stocks and Translation, but make sure you check out other episodes of our show on the Yahoo Finance site and mobile app. We're also on all of your favorite podcast platforms, so be sure to like, leave a comment, and subscribe wherever you get your podcasts. This post was written by Lauren Pokedoff Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
06-07-2025
- Business
- Yahoo
'Some complacency has crept in': How FOMO and speculative bets are driving the 2025 market rally
The stock market continues to hit new highs in 2025, buoyed by a surge in megacap stocks and more speculative trades as investors' appetite for risk continues to grow despite lingering economic uncertainties. Palantir (PLTR), sometimes described as the quintessential meme stock, and Super Micro Computer (SMCI), the most heavily shorted stock in the S&P 500 (^GSPC) in April, have been among the top-performing equities this year, far outpacing the broader index. While this speculative rally exists alongside record highs for AI giants like Nvidia (NVDA) and Meta (META), a fear of missing out appears to be a key force behind recent investor behavior. "Retail traders' fingerprints [are] all over it," Liz Ann Sonders, chief investment strategist at Charles Schwab, said on Yahoo Finance's Opening Bid this week, describing the market's powerful rebound since the early April lows. The rally, she said, has been strengthened by a surge in "retail favorites or meme stocks, unprofitable tech," and a "lower quality tilt" that has lifted riskier names — even penny stocks. "Some complacency has crept in," she said. According to data from Goldman Sachs, the riskiest corners of the market, including high-beta momentum stocks, a bitcoin-sensitive index, and unprofitable tech, far outpaced the S&P 500 in the second quarter as investors chased speculative momentum. Stablecoin issuer Circle (CRCL) and AI cloud provider CoreWeave (CRWV) have skyrocketed since their public debuts earlier this year, surging nearly 500% and 300%, respectively. Shares of Quantum Computing (QUBT) have also jumped, rising more than 60% over the past month amid a broader rally of the sector. That surge in risk-taking is raising red flags for some on Wall Street, particularly as certain trades show an increasing disconnect from fundamentals. "It's the gamification of the financial markets that we've seen over the last five years," Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, told Yahoo Finance on Tuesday. "It's a considerable concern ... There's a lot of speculation there. Buyer beware." Read more: How to protect your money during turmoil, stock market volatility According to Bespoke Investment Group, nearly 420 stocks in the Russell 3000 jumped more than 50% between the lows on April 8 and June 27, including 14 that soared over 200%. Of those highfliers, only four are profitable. On average, the 858 unprofitable companies in the index gained 36.4% during that stretch, more than doubling the 15.6% return seen among the 500 stocks with the lowest price-to-earnings ratios. That kind of price action, driven more by momentum than financials, has become a defining feature of the current market environment. "MOMO and FOMO are likely to dominate until proven otherwise," Steve Sosnick, chief strategist at Interactive Brokers, wrote in a client note this week, noting that many investors chasing market leaders aren't relying on traditional valuation metrics. "I don't think the traders who are buying Nvidia and other market leaders at continual all-time highs are doing an analysis of the companies' discounted future cash flows," he said, adding that momentum strategies, by nature, imply "fundamentals don't matter" — at least for now. "Ultimately, fundamentals do matter," Sosnick continued. "But that reconciliation can come months, or years later." For now, investors seem content to ride the wave. "Whatever hasn't killed this market made it stronger," Sosnick added. "But just because none of [the risks] have so far doesn't mean they won't." Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
