Welcome to the Stonks Market | The Daily Peel | 7/27/21

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Market Snapshot

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What's Ripe

Microstrategy ($MSTR) – Meme stocks are going up and this time digital currencies decided to join the party. With BTC and others finally waking from a FUD-filled hibernation, no stock benefited more than MicroStrategy, gaining 26.5%. A myriad of factors melded to create this bright green day, but perhaps none greater than Amazon posting a job listing for a digital currency developer. I can see it now... "Bezoscoin" ... exactly what the world needs.

AMC Entertainment ($AMC) – Speculative bets have come together to create an apes day in paradise. Most notably, AMC beefed up another 9.0%, largely riding the tidal wave of gains seen yesterday. GameStop, Clover, and Palantir all joined the party too with relatively little news. Didn't we tell you stonks only go up?

Tesla ($TSLA) – Haters will say Tesla's 2.2% rise yesterday doesn't warrant a highly coveted spot in What's Ripe, but that's why we make the rules. After releasing Q2 earnings, shares in the EV & clean energy corp. spiked. Not to get too complex here, but they absolutely killed it. Total quarterly revenue was up 98%, net income exploded almost 1,000%, and our in-house analysis indicates this was the first time that the firm generated a quarterly GAAP profit without EV subsidies factored in. Good on ya Elon, Nikola would be proud.

 
 
 

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What's Rotten

Twitter ($TWTR) – While CEO Jack Dorsey galivants through the safari to build out Square, his baby - his first and apparently forgotten baby, took a tumble. Twitter did not have a good day. After a stellar earnings release last week boosted the stock, Wall Street pulled a classic "psyche!" and took shares down 4.1% yesterday. Even with killer earnings and Dorsey announcing BTC will be a "big part" of the future for Twitter, it wasn't enough to keep shares elevated.

Lockheed Martin ($LMT) – You ever just get sick of the lack of war going on? Yeah, well Lockheed Martin does, especially yesterday as the A&D behemoth dropped 3.4% on not-good-enough earnings. Most of the heat is coming from a $0.61 per share charge stemming from "performance issues experienced on a classified program" according to Barron's. Now, I'm no expert, but I think we can all agree...it's gotta be aliens.

Biotech ($BIB) – We all know Wall Street is great at forgiving short term news for longer term benefits...just kidding, did you really fall for that? Unfortunately, that is exactly what happened with biotech yesterday. Moderna, BioNTech, and notably Tonix Pharma all fell Monday, taking ProShares BioTech ETF down 3.9%. The newscycle in the industry was mixed, but in the realm of rich valuations, any negative news leads to exponentially negative stock returns.

 

Macro Monkey Says

New Homes – Okay, fine, you caught me. Yesterday I used the phrase "white hot housing market" and today the housing market said to me "shut up man." While existing home sales just keep climbing, new home sales brought down the house. Hitting a 14-month low, the lack of residential construction and supply constraints are at least partially to blame. We can't be too worried though, because once the Tendie Man sends the next check, I'm sure we'll all be itching for our own place.

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Food for Thought:

The Streiod Stocks – While we're still in earnings szn, let's take a sec to stop and look around a bit. We are in the midst of the best earnings cycle since immediately following the GFC, with 88% of companies beating EPS guidance and 86% beating revenue projections according to FactSet. Try not to get too excited though, as many of these projections were made in the depths of a little thing called The Pandemic. This got me thinking, if all you have to do is beat earnings expectations, why not just project bad quarters and lower expectations? Hang on a sec, Harvard is calling me…

 

Meme Meditation

 
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Wise Investor Says

"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."

 George Soros

 

Happy Investing,

Patrick & The Daily Peel Team

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Comments (1)

Jul 27, 2021 - 6:15am

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