Top News  Shutterstock Back in January, we saw the GameStop (GME) phenomenon disrupt traditional trading patterns, though the saga ended quite quickly despite warnings of shifting power dynamics on Wall Street. Over the last week, we've seen new fears spread over market - inflation and rising bond yields. Could those also prove fleeting as "buy the dip" trends on Twitter?
Quote: "The way in which interest rates have risen is not the type of rise that we would naturally associate with weakness in the equity market," said Morgan Stanley's Matthew Hornbach. "We're not seeing interest rates spike higher, we're not seeing a taper tantrum like we did in 2013, when interest rates rose 150 bps in the span of three months."
Many have also been touting the "equity rotation" as an uptick in bond yields caused stress in high-flying growth plays. Technology has been having a rough few weeks, along with momentum trades, which is one of the most crowded in the bull market. Drivers of the rotation into cyclical picks have been economic reopenings and broader COVID vaccine rollouts, though with many growth stocks on the backfoot, it may pay to put some cash into the sector.
Quote: "I'm happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off," Jim Cramer said on Mad Money. "For the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless." (30 comments)
   | | Top News Shutterstock Back in January, we saw the GameStop (GME) phenomenon disrupt traditional trading patterns, though the saga ended quite quickly despite warnings of shifting power dynamics on Wall Street. Over the last week, we've seen new fears spread over market - inflation and rising bond yields. Could those also prove fleeting as "buy the dip" trends on Twitter?
Quote: "The way in which interest rates have risen is not the type of rise that we would naturally associate with weakness in the equity market," said Morgan Stanley's Matthew Hornbach. "We're not seeing interest rates spike higher, we're not seeing a taper tantrum like we did in 2013, when interest rates rose 150 bps in the span of three months."
Many have also been touting the "equity rotation" as an uptick in bond yields caused stress in high-flying growth plays. Technology has been having a rough few weeks, along with momentum trades, which is one of the most crowded in the bull market. Drivers of the rotation into cyclical picks have been economic reopenings and broader COVID vaccine rollouts, though with many growth stocks on the backfoot, it may pay to put some cash into the sector.
Quote: "I'm happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off," Jim Cramer said on Mad Money. "For the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless." (30 comments)
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| Central Banking Reassuring comments from Jerome Powell helped stocks recover on Tuesday following steep losses earlier in the day. The Nasdaq ended the session down 0.5%, after falling as much as 4%, while the Dow staged a massive 360-point comeback and closed nearly 16 points higher. The Fed Chair told the Senate Banking Committee that the central bank would keep its foot on the gas pedal as the pandemic recovery path remains "highly uncertain," though he forecast a return to more normal and improved economic activity later in the year.
Bigger picture: Powell's visit to Capitol Hill continues today as he addresses the House of Representatives Financial Services Committee. Stock index futures pulled off their overnight lows ahead of the testimony and are pointing to a green session at the open: Dow +0.1%; S&P 500 +0.2%; Nasdaq +0.2%. It's important to note that Powell also played down inflation worries from another big fiscal stimulus package and called the recent run-up in bond yields "a statement of confidence" in a strong economic outlook. Not only did he help backstop the market, some other influential names lent a hand to notable names that came under pressure.
As electric vehicle stocks tumbled, Cathie Wood bought more shares of Tesla (TSLA) (for a second day running), adding 11,893 shares to the ARK Autonomous Technology & Robotics ETF (ARKQ), 177,214 shares for the ARK Innovation Fund (ARKK) and 51,441 shares for the ARK Next Generation Internet ETF (ARKW). During an interview on Bloomberg Radio, Wood said she loves the liquidity that the shakeout in the market brings in general and sees a $7T opportunity in the autonomous car industry.
Go deeper: The crypto washout also deepened, with Bitcoin (BTC-USD) sinking to $45,000, but it rapidly made its way back to the $50,000 level. MicroStrategy (MSTR) CEO Michael Saylor was not bothered by the shaky price action, noting that the crypto became a $1T digital monetary network in just a dozen years, way faster than other $1T club members like Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Google (GOOG, GOOGL). Meanwhile, Jack Dorsey's Square tripled its last investment in Bitcoin via a $170M purchase of 3,318 tokens, while Cathie Wood said she was "very positive" on the crypto and welcomed its "healthy correction." (16 comments) |
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