Latest news with #memestock
Yahoo
21 hours ago
- Business
- Yahoo
Investors face a week rife with risks, as worries about stock-market euphoria mount. Here's what to watch.
A seemingly unstoppable stock-market rally has pushed valuations on shares of the biggest U.S. companies toward levels last seen near the market's 2021 peak. Even smaller, unprofitable companies have tallied big gains recently, igniting another bout of meme-stock mania. 'Vegas is not fun anymore': $9 cups of coffee and pricier rooms are steering travelers away from the vacation mecca We're in our 70s with a $260K mortgage at 3% interest and $1.6 million in savings. Should we pay off our house in full? The S&P 500's SPX push further into record territory has carried the cyclically adjusted price-to-earnings ratio for the index toward levels last seen around the 2021 stock-market peak. Investors might remember that a painful nine-month bear market followed. As worries mount that frothy markets could spill over into another selloff, investors will need to walk a tightrope during the week ahead, as the summer doldrums are interrupted by a flurry of potential event risk. A few things worth watching: Investors will face down the busiest week of corporate earnings season for S&P 500 companies, along with a flurry of economic data culminating in Friday's July jobs report. Friday additionally marks President Donald Trump's Aug. 1 trade-deal deadline, while policy meetings for several major central banks are also on the calendar, including the U.S. Federal Reserve and the Bank of Japan. The beginning of the week will see the release of the Treasury Department's latest financing estimates, which are expected to reflect a flood of Treasury-bill issuance. 'Any time you have high valuations, you should be on guard for surprises,' said James St. Aubin, chief investment officer at Ocean Park Asset Management, during an interview with MarketWatch. 'The biggest risk is that all of this optimism is already priced into markets.' Corporate earnings have been off to a strong start, according to an analysis from FactSet's John Butters. Earnings surprises — that is, results that surpass Wall Street analysts' forecasts — have surpassed the five-year average, although these same analysts repeatedly lowered the bar as the second quarter dragged on. Still, the real test lies ahead. This week, 163 members of the S&P 500 are due to report, making it the busiest week of the earnings season. This includes four members of the 'Magnificent Seven' — Microsoft Corp. MSFT, Meta Platforms Inc. META, Inc. AMZN and Apple Inc. AAPL These companies will share their latest results at a time when the largest 10 companies in the S&P 500 — a group that includes all seven Magnificent Seven members — have seen their weighting in the index balloon to nearly 40%, according to Goldman Sachs. Results for the cohort have been mixed so far. Alphabet Inc. GOOGL GOOG saw its shares rise after it reported earnings last Wednesday, adding to a winning streak for the stock. Meanwhile, Tesla Inc. shares TSLA slumped after Chief Executive Elon Musk warned of a few rough quarters ahead. Companies don't necessarily need to report a poor number to see their shares react negatively. Take Netflix Inc. NFLX: The streaming giant saw its shares encounter a bit of turbulence after it reported earnings last week. 'The numbers don't have to be bad, they just have to be worse than what had been priced in,' St. Aubin noted. David Bianco, Americas CIO at DWS, said earnings outside of these dominant tech names could pose an even bigger risk for the market. He is specifically looking at how manufacturing and consumer-facing businesses have responded to President Trump's tariffs. 'I think as the earnings season goes on, you will hear companies point out that earnings growth is slowing, that the tariffs are having some impact on profit margins and that they expect an even greater challenge from the tariffs in the back half of the year,' he said. The White House has announced a handful of trade agreements in recent days, including pacts with Japan, the Philippines and Indonesia. On Sunday, a deal was announced with the European Union, resulting in 15% tariffs on European exports to the U.S. But deals with some of the biggest U.S. trading partners, including Canada and Mexico, have yet to be reached. The big risk for markets is that no progress will be made by Friday, and that instead of delaying the deadline once again, the White House follows through with its threat to reimpose higher levies. 'If we get to Aug.1 and the administration makes an announcement saying some of these tariffs are going back to a level like what we saw in April, that could create some volatility,' said Anthony Saglimbene, chief market strategist at Ameriprise Financial, during an interview with MarketWatch. A flurry of U.S. economic data are due next week. Reports on the docket include the personal-consumption expenditures (PCE) price index — the Fed's preferred inflation gauge — and the ISM manufacturing reading for July. But the main focus will be a wave of labor-market reports, culminating with the July jobs report due out on Friday. Economists are expecting that 102,000 new jobs were created in July, according to a consensus estimate released by the Wall Street Journal. That means the bar is pretty low, St. Aubin said. Still, previous July reports have signaled surprising levels of weakness, so investors would be right to brace for the possibility of a repeat. Last year, a soft July report helped set off a 'growth scare' that contributed to the Aug. 5 Japanese yen USDJPY carry-trade unwind. Fed Chair Jerome Powell will deliver his postmeeting press conference on Wednesday. DWS's Bianco expects Powell could gently push back on investors' expectations for an interest-rate cut in September. Both the S&P 500 and Nasdaq Composite COMP finished in record territory on Friday, with the S&P 500 tallying its fifth straight record close, FactSet data showed. The Dow Jones Industrial Average DJIA also climbed, as all three indexes tallied weekly gains. 'His income is limited': Should I pay $800 a month towards my husband's $67,000 student debt? 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
a day ago
- Business
- Yahoo
'I'm not here to pump up a stock': The hedge funder who sparked a speculative frenzy says he's not playing the meme stock game
Opendoor isn't a meme stock, says the hedge funder whose thesis sparked a huge rally in the shares. Eric Jackson, known for his call on Carvana in 2023, thinks Opendoor can rally more than 3,000%. He says Opendoor shouldn't be lumped together with other meme stocks that surged this week. The architect of the latest meme stock rally doesn't want you to call him that. Eric Jackson, the founder of EMJ Capital, is bullish on Opendoor—the online real estate platform that embarked on a blistering rally after he posted his thesis on X—but it isn't a meme stock, he says. In his eyes, it's the real deal, a pandemic-era darling with big turnaround potential despite a 92% tumble since its peak. Jackson is known for what ended up being a correctly bullish call on Carvana in 2023. He laid out his views on Opendoor on social media on July 14, sparking not only a rapid rise in the stock, which also seems to have revived the meme stock trade among a newer group of unloved stocks, including Kohl's, Krispy Kreme, and GoPro. But for Jackson, Opendoor isn't a joke. He declined to disclose the value of his firm's stake, but it's now the single biggest position in EMJ Capital's portfolio, he told Business Insider. "I never thought of it that way," he said of investors who called Opendoor a meme stock. "So I sort of take offense, because I find all the meme stocks to be, to me, kind of terrible businesses that I would never want to own. Whereas I see Opendoor as a legitimate turnaround story." Opendoor will probably be the only company among the meme-stock cohort that won't be forgotten about by next week, he said, adding that he sees the latest speculative buying spree fizzling out. Indeed, most of this week's meme stock cohort was already giving up their biggest gains by midday on Friday. Opendoor's stock price spiked as high as $4.97 this week in intraday trading, an almost 830% increase in July. The stock has since pared its gains, trading around $2.46 a share on Friday, but Jackson still thinks shares could hit $82 within the next several years, a gain that would mark a 3,200% increase from current levels. The next leg-up for the stock could come in the next few weeks when the company reports third-quarter earnings, Jackson said. 'I'm not here to pump up a stock' Opendoor first appeared on Jackson's radar in 2022, around the time he started paying attention to Carvana. In a podcast called "The Compound and Friends," he said he believed both companies, which were struggling at the time, could stage a massive turnaround. His bet on Carvana paid off. Shares of the online used car retailer have risen almost 7,000% since the beginning of 2023. The bet on Opendoor — until now — did not. The stock traded between $1-$3 a share around the time Jackson finally gave up on the call and cashed out his shares nine months ago. "It's like having a painful ex in your history and you just don't want to look at their Instagram page or something like that, because it just brings up bad feelings," he said. Jackson thinks the story could be different this time around for a few reasons: Opendoor stock now looks similar to Carvana when Jackson first made his call on the used car seller. Opendoor shares were trading under $1 around the time he fired off a series of posts about the company on X. Opendoor has aggressively slashed its costs in recent years. In 2024, it cut its workforce by 17%. The firm doesn't have much competition in the iBuying space now that Zillow and Redfin have exited that business. Opendoor was likely "thrown for a loop" by the Fed keeping interest rates higher for longer than expected in 2022 and 2023, Jackson said. High borrowing costs significantly impact the real estate sector, but most investors expect the central bank to cut rates several more times this year, potentially stimulating fresh activity in the housing market. Opendoor might also be able to benefit from a big AI play, Jackson told BI, citing conversations with a former company insider. Jackson says what he sees going for Opendoor sets it apart from the meme stocks at the center of this week's euphoric rally. "Does Kohl's have an AI strategy? Does American Eagle, other than hiring Sydney Sweeney, have an AI strategy? I mean, GoPro — I mean, come on," he said of the other meme stocks in the spotlight. On social media, Jackson frequently tells his followers he's on the quest to find the next "100-bagger," a term coined by the investor Chris Mayer to describe an investment that has the potential to return 100 times its value over the long run. Jackson's firm, which has also started leaning on AI models to identify stocks with glimmers of potential, tries to look for three things, he said: Have other people given up on the stock? Does it look substantially mispriced? Does it look like it has a sustainable turnaround trajectory? If the answers are "yes," it could be a winning trade, though he acknowledges the approach isn't an exact science. Successful investments Jackson has made that he deems as 100-baggers include Alibaba, Microsoft, Coinbase, and Roku, he said in a post on X in June. The Opendoor call, in particular, has garnered him a lot of attention. Speaking to Bloomberg, Jackson said his firm had received 600 calls or emails from people inquiring about his fund and investment ideas in the last several weeks. Since posting the Opendoor thread on X, he told BI he's spoken with investors all over Asia, Africa, Europe, and South America who buy into his call, but he has also come across "a lot of negative stuff" on X about his thesis. "I guess it comes with the territory when you stick your neck out there as a real person with real thoughts. You get all these anonymous trolls chirping back at you," he said. "I really hope that if all of retail and all institutional investors truly believe in this $82 story, my hope is they zero in with like, the Death Star on this planet, and just buy and hold," he said, adding that he believed investors could stage a rally similar to Cisco's meteoric rise during the dot-com bubble. Importantly, he emphasized that he's not a fan of people saying he sparked the meme stock rally. "But I'm some grifter or flipper, no. I'm in this for the long run. I'm not here to pump up a stock and jump out of it. I've never done that." Read the original article on Business Insider
Yahoo
a day ago
- Business
- Yahoo
Why Beyond Meat (BYND) Shares Are Falling Today
What Happened? Shares of plant-based protein company Beyond Meat (NASDAQ:BYND) fell 3.9% in the morning session after the recent "meme stock" rally that had propelled its shares higher appeared to lose momentum. The stock had previously surged more than 20% in the prior week as part of a broader "meme stock" rally, where retail investors targeted highly shorted companies. However, that momentum appeared to reverse, bringing the company's fundamental challenges back into focus. Beyond Meat had been struggling with significant revenue declines, negative gross profit margins, and a heavy debt burden. Analysts had maintained a bearish outlook, with a consensus "Moderate Sell" rating on the stock. Adding to investor concerns, the company had previously withdrawn its financial forecasts for 2025, citing an "elevated level of uncertainty" about its business. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Beyond Meat? Access our full analysis report here, it's free. What Is The Market Telling Us Beyond Meat's shares are extremely volatile and have had 49 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 5 days ago when the stock gained 5.1% as the company was caught up in a revival of the "meme stock" phenomenon, where retail investors coordinated on social media to buy heavily shorted stocks. Beyond Meat was one of several companies with high short interest that experienced a surge in buying activity. Short interest refers to the number of shares that have been sold short—a bet that the stock's price will fall—but have not yet been covered or closed out. The stock's move was attributed to speculative trading and social media hype rather than any new company-specific fundamentals. According to data analytics firm Ortex, about 38% of Beyond Meat's publicly available shares were in a short position, making it a prime target for a "short squeeze." A short squeeze happens when a rising stock price forces short sellers to buy back shares to limit their losses, which in turn pushes the stock price even higher. Beyond Meat is down 10% since the beginning of the year, and at $3.47 per share, it is trading 53.2% below its 52-week high of $7.40 from September 2024. Investors who bought $1,000 worth of Beyond Meat's shares 5 years ago would now be looking at an investment worth $27.62. Today's young investors likely haven't read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next. 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
Bloomberg
a day ago
- Business
- Bloomberg
Long Interest Is Driving Meme-Stock Action, S3's Sloan Says
S3 Partners founder Bob Sloan discusses what is driving the meme-stock market action on "Bloomberg Open Interest." (Source: Bloomberg)
Wall Street Journal
3 days ago
- Business
- Wall Street Journal
How to Navigate an AI Bull Market, With Tech Investor Imran Khan - WSJ's Take On the Week
In this week's episode of WSJ's Take On the Week, hosts Gunjan Banerji and Telis Demos start the show by digging into the meme-stock mania surrounding OpenDoor, Krispy Kreme and Kohl's, and how the factors driving this are different from 2021. Then they get into President Trump's latest trade deal with Japan and how it's showing up in auto-sector trades. Plus, some economic talk ahead of the Federal Reserve's meeting this week to discuss interest rates, and the release of the latest jobs report. Later in the show, Imran Khan, founder and chief investment officer of Proem Asset Management, joins Gunjan to talk about the AI trade surrounding companies like Nvidia, Meta and Alphabet. Plus, Khan chats about how AI enthusiasm is driving market speculation, herd thinking in markets, and the value of private-market investments like OpenAI. This is WSJ's Take On the Week where co-hosts Gunjan Banerji, lead writer for Live Markets, and Telis Demos, Heard on the Street's banking and money columnist, cut through the noise and dive into markets, the economy and finance—the big trades, key players and business news ahead. Have an idea for a future guest or episode? How can we better help you take on the week? We'd love to hear from you. Email the show at takeontheweek@ To watch the video version of this episode, visit our WSJ Podcasts YouTube channel or thevideo page of Further Reading: Kohl's and Opendoor Headline a New Class of Meme Stocks With Hectic Trading in Krispy Kreme and OpenDoor, Stocks Head for a Meme Reversion Trump's New Trade Standard Takes Shape With 15% Tariff Deal How Nvidia Became the World's First $4 Trillion Company For more coverage of the markets and your investments, head to WSJ's Heard on The Street Column, and WSJ's Live Markets blog. Sign up for the WSJ's free Markets A.M. newsletter.
