It’s bump day.
We are certainly seeing positive momentum in the market, with the S&P 500 and Nasdaq hitting all-time highs in intraday trading.
Yesterday we talked about GameStop (GME) – Get a report, The next door (KIND) , and JEDI. If you missed it, you can read it here.
With that, let’s dive in.
Oh, and I hope you don’t miss me too much, but I’ll be gone until Tuesday July 12th.
Focus on the Federal Reserve
The Federal Reserve’s minutes of its June meeting showed that the Federal Open Market Committee or the FOMC debated whether or not the post-pandemic recovery is underway.
“When the slowdown from $ 120 billion in monthly bond purchases hits, FOMC officials questioned whether mortgage-backed securities should be slowed down first or sold in unison with Treasury bonds. , with officials noting the need to be “well-positioned” to execute any cuts in response to “unexpected economic developments” which the Fed said would include faster-than-expected progress towards its inflation and labor market targets “, The streets Martin Baccardax wrote.
“Various participants mentioned that they expected the conditions to start slowing down the pace of asset purchases to be met a little earlier than expected in previous meetings in light of the incoming data,” the lawsuit says. -verbal. “Some participants felt that the incoming data provided a less clear signal on the underlying economic dynamics and felt that the Committee would have information in the coming months to better assess the development of the labor market and the economy. inflation.”
Before the Federal Reserve minutes, I spoke to David Keller, chief market strategist at StockCharts, about a number of things, which inevitably included his take on the Fed’s impact on markets.
“The greatest potential to move the market is to reduce bond purchases,” Keller told me of the Fed.
“It’s not what the Fed does, it’s about expectations of what the Fed can do,” Keller said before the minutes. He had some concerns about how the Fed could pull back the support the market had received “graciously” and noted that we might see some leverage in the market because of it.
Real money Tom Graff also discussed the minutes with me. He wrote, in a column for Real money that, “As the Fed chief transforms from dove to hawk, he drops a few clues in the June meeting minutes as to why the character change was made. Markets were eagerly awaiting the trial’s release on Wednesday. -verbal of that meeting, after taking everyone by surprise last month. The dot plot and President Jerome Powell’s speech on quantitative easing suggested that the Fed had turned hawkish. Some commentators were even hoping for clues concrete on the timing of quantitative easing, but it was still wishful thinking. Those minutes, however, were key clues as to why the Fed’s feathers have darkened. “
Graff also told me about the minutes in an interview.
What marked me on Wednesday
When I started ˆThe street a few years ago i would start every morning by checking the main news outlets and then check my watchlists to see what stocks were really moving.
The first thing I do when I log in these days is read through Reddit. There are three subreddits that I follow, r / WallStreetBets, SuperStonk, and WallStreetBetsNew.
Then, of course, I check Twitter to see what actions have caught my followers’ attention. I’m telling you this because there was one particular post that caught my eye this morning.
A ShortChecker user post laid out the differences between GameStop, AMC, and Clover Health very clearly (excuse their French, though).
Seriously. I applaud this user for doing what the media including myself could not. On their own, they broke it down into a few paragraphs. Meanwhile, I still see the media calling out every name that doubles or is mentioned on WallStreetBets once as a “memes stock”.
So let’s talk about that a bit.
Each investor has their own thesis for investing. If they don’t, then they copy someone else’s thesis and – if we’re frank – don’t do the due diligence that needs to be done, otherwise it’s the blind man following again. ‘blinded.
All theses are not the same.
Two monkeys can sit in the same room and agree that they are HODLing GameStop but have different reasons for doing so.
The narrative, as ShortChecker points out, is that this group may be “cult-like”, but there is no cult here.
And with that, let’s turn our attention to AMC.
Because, as you know by now, I like to highlight the stock that I have been following closely during today’s trading session.
But also, I want to tap on yesterday’s news. Or should I say, a tweet from yesterday.
AMC had requested authorization to sell 25 million shares at some point next year in order to fund potential “value-creating” investment opportunities.
CEO Aron noted that the 25 million request was a “more measured proposition” than the 500 million share request launched earlier this spring, which Aron said would bolster the group’s cash reserves and help reduce its indebtedness.
Aron has focused a lot on the retail investor following the momentum with the Reddit monkeys.
He even did interviews with Trey’s trades, a leading retail investor who owns his own YouTube channel with hundreds of thousands of viewers.
AMC is one of the top seven stocks on Swaggy Stocks and has a lot of positive sentiment overall.
However, over the past five days it has fallen over 20% and is currently trading around $ 45.
It is curious to see a CEO satisfy the investor so much. I’ve seen reluctance, saying he’s doing too much for the investor, but the other half would be that the CEO paying so much attention to what investors want might be good for the stock.
Either way, AMC is a stock that I will be watching amidst this volatility.