Meme Stocks and Movers for 1\/11: GameStop, Lithium Americas, Robinhood, Tesla
What looked like a difficult day before markets opened Monday turned out to be not so bad after all. The three major U.S. indexes all closed well above intraday and premarket lows, even though the Nasdaq was the only one to finish with a small gain. All three indexes traded higher in Tuesday’s premarket. Federal Reserve Chair Jerome Powell has his confirmation hearing for a second term Tuesday. In his prepared remarks, Powell noted “the economy is expanding at its fastest pace in many years, and the labor market is strong.” Expect lots of questions about inflation.
Crude oil traded up about 1.6% early Tuesday at $79.50 a barrel. Bitcoin, which dipped below $40,000 Monday morning, traded at around $41,500 early Tuesday. Yields on 10-year Treasury notes closed at 1.78%, up two basis points, and two-year yields closed at 0.92%, up 5 basis points. Ten-year notes traded at around 1.77% early Tuesday, while the two-year notes traded up at around 0.94%.
Among stocks making decent moves higher Tuesday morning was Lithium Americas Corp. (NYSE: LAC). Shares traded up by around 5% in premarket trading, partially due to record prices for lithium carbonate. S&P Global Platts has reported that topped CNY300,000 (about $45,500) per metric ton on Monday and added another 1% Tuesday morning. Lithium prices are up 35% over the past month and by 531% for the past 12 months
Monday trading did not go well for most meme stocks. Losers outnumbered winners by a margin of around four to one among the stocks on our watch list. GameStop Corp. (NYSE: GME) was among the day’s biggest losers, dropping about 6.7%. The OG meme stock had no specific news, but the euphoria from last week’s report that GameStop was going to get into the market for NFTs has worn off. The stock traded down by less than 1% in Tuesday’s premarket.
Robinhood Markets Inc. (NASDAQ: HOOD) closed lower Monday and traded higher by less than 1% Tuesday morning. A MarketWatch story suggests that a FINRA arbitrator’s decision against Robinhood could open the floodgates for other unhappy investors.
The arbitrator awarded nearly $30,000 to a trader who claimed he suffered “significant investment losses” last year when Robinhood restricted trading on certain meme stocks. Rather than charge Robinhood and its pay-for-order-flow partner Citadel Securities with conspiracy, the trader and his attorney gave the arbitrator just the facts and let the judgment rest entirely on the merits. That Robinhood lost is not good news for the company.
Tesla Inc. (NASDAQ: TSLA) added more than 3% on Monday, while most other electric vehicle makers were posting losses. Rivian, for example, dropped 5.6% on Monday and traded down by about 4% in Tuesday’s premarket. Lucid, Canoo, Xpeng, Li Auto and Nio all closed lower Monday, and many were also lower early Tuesday.
Morgan Stanley auto industry analyst Adam Jonas has raised his price target for Tesla stock by $100 to $1,300 and maintained his Buy rating. In his note, he wrote, “Think of the EV race as a marathon. Tesla is in the lead at mile number 21. Everybody else is at mile 2 or still tying their shoes.”
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