Reddit Stocks: What meme stocks are trending today? – July 11, 2023

US futures

• Dow Jones Industrial Average is up 0.3%
• S&P 500 is up 0.2%
• Nasdaq 100 is up 0.3%

 

There is a whiff of optimism in the air today.

Hopes have risen that we are approaching the end of the current monetary policy tightening cycle after several members of the Fed suggested interest rates are approaching their peak. The president of the San Francisco Fed, Mary Daly, said she sees a ‘couple more rate hikes’ this year in order to bring inflation down to that 2% target while vice chair for supervision Michael Barr said he believes ‘we’re close’ to the end of this hiking cycle. Markets are convinced that the Fed will go ahead with another 25bps rate hike when they meet later this month but are more divided over what happens for the rest of the year.

Local media reports from state-backed outlets that China is planning to introduce fresh stimulus is also helping lift confidence following the country’s lacklustre performance this year, when it started to reopen the economy after abandoning its fight against Covid-19.

However, that optimism may not last long considering the major events pencilled-in for the rest of this week. Tomorrow’s US CPI has the potential to dash hopes that the monetary policy tightening is nearing its end if it comes in too hot, especially after data last week showed the labour market remains resilient. Economists hope CPI cooled on an annual basis in June.

The start of US earnings season this week could also bring surprises, with the S&P 500 forecast to report its worst set of earnings in two years while rising recession risks weigh on the outlook for the second half.

 

Most discussed Reddit stocks

Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Rivian
2. Tesla
3. Carvana
4. Visa
5. Apple
6. NVIDIA
7. Meta
8. Robinhood
9. C3.ai
10. Amazon

 

Most active US stocks before the bell

Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:

1. Lucid Group
2. Rivian
3. Iovance Biotherapeutics
4. Palantir
5. Nikola
6. Tesla
7. Ginkgo Bioworks
8. Marathon Digital
9. SoFi
10. Carnival

US premarket winners and losers

Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:

Winners	%	Losers	%
CareDx	12.8%	Viridian Therapeutics	-18.5%
Movado Group	6.7%	Iovance Biotheraputics	-11.7%
Zillow Group	5.9%	Equitrans Midstream	-6.5%
E2open Parent	5.8%	PennyMac Financial Services	-5.9%
WD-40	5.3%	Kura Sushi USA	-5.3%
Affirm	5.2%	Dave & Buster's Entertainment	-5.0%
Veracyte	5.1%	Par Pacific Holdings	-4.2%
Arcus Biosciences	4.8%	Allego	-4.1%
Tellurian	4.1%	PriceSmart	-4.1%
Terawulf	4.1%	Enviva	-4.1%

 

Top US stocks to watch

Rivian is down 1.5% at $25.13 and set to snap a nine-day winning streak that sent the electric carmaker to its highest level since mid-December yesterday. The Doji star formed yesterday and the fact the RSI is in deep overbought territory suggests we could see a reversal following the recent rally, although some see room for it to run further. Barclays upped its target price on the stock to $30 from $22 this morning. Sentiment has improved following better than expected delivery numbers in the latest quarter and news it has started shipping electric vans to Europe that have been made for its biggest shareholder and customer, Amazon.

Other electric vehicle makers are also among the most traded before the bell. Lucid shares are up 1.4% and set to open at their highest level in over two months while Nikola is down 0.3% after closing at its highest level in three weeks yesterday. Tesla is up 0.2% after sinking to July-lows this week.

Tech stocks took a knock yesterday as markets reacted to news that the Nasdaq 100 will be rebalanced to address the ‘overconcentration’ of the index, with just a handful of tech firms making up a huge slice of the index. This will redistribute weights and suggests the influence held by the likes of Microsoft, Apple, NVIDIA, Amazon, Tesla, Meta and Alphabet – the seven largest components that make up over 55% of the index – will decline. The new weights will be announced on July 14 and take effect when the bell opens markets on July 24.

NVIDIA is up 0.6% at $424.24 after KeyBanc Capital bumped up its price target to $550 from $500. Meanwhile, analysts at Citigroup said NVIDIA is in a position to control ‘at least 90%’ of the AI chip market. The broker said AMD is in second place and that it expects ‘NVIDIA too have a substantial advantage in AI performance and share versus AMD going forward given superior speed and ecosystem’. It maintained its $120 price target on AMD, which is up 0.4% at $114.

Apple is up 0.4% at $189.40. KeyBanc lifted its price target on the iPhone maker to $200 from $180 this morning. Meanwhile, Tata Group is close to striking a deal to buy a factory owned by one of Apple’s suppliers to become the first Indian firm to assemble iPhones, according to reports from Bloomberg. Tata Group is thought to be close to taking over a plant owned by Wistron Corp in a deal that could be worth over $600 million. The facility employs 10,000 workers and makes the newest iPhone 14. That workforce is expected to treble in size by next year, unnamed sources said. Elsewhere, Apple has launched an online store on Tencent’s popular WeChat app in China.

Meta is up 0.3% as Threads continues to gain momentum. The new social media platform, which became the fastest-growing app ever after securing over 100 million users in the first five days of being launched, now has 104 million users as of the last count tracked by Quiver Quantitative. That is fuelling hopes that it can provide a new catalyst to Meta, with Evercore ISI predicting Threads could add some $8 billion in annual revenue over the next two years, forecasting it will secure 200 million users.

Amazon is up 0.7% this morning. The ecommerce giant is launching its annual Prime Day sales event today, although against a backdrop of industrial action by warehouse workers. The event in recent years has failed to provide a catalyst for Amazon like it used to, partly because more attention has shifted to the profit driver of the group, its cloud-computing arm AWS.  CFRA Research has said discounts offered during the 48-hour event are deeper than usual as it tries to stir-up demand during a cost-of-living crisis. JPMorgan has predicted this year’s sales event will add some $5 billion in incremental revenue, up around 13% from last year. Meanwhile, Amazon is set to be the first big US tech company to challenge the European Union’s new digital services rules after appealing against the decision to label it as a ‘very large online platform’, arguing that it does not fit this description. That designation means it has to follow stricter rules cover ingonline content.

Uber is trading marginally lower on reports that chief financial officer Nelson Chai is planning to step down, according to Bloomberg. The timing of his departure has not yet been agreed.

Affirm is being heavily traded before the bell and is up 5.2% at $15.56. Mizuho raised its price target on the stock to $20 from $17 this morning and maintained its Buy rating, stating it is bullish on search data for its Debt+ service, fuelling hopes it can follow the same trajectory as Cash Card. That is countering a more pessimistic view from Piper Sandler yesterday, when it downgraded the buy now, pay later firm to Underweight over fears that higher interest rates and more intense competition will crimp margins.

Carvana is up 2.9% and set to open at a 10-month high. The used car retailer has rallied since delivering better than expected results at the start of May, boosted further by its decision to lift its full year outlook in early June. That has lifted expectations ahead of its next set of quarterly results due out in early August. Notably, Carvana is still heavily shorted with short interest standing at over 63% of its float, according to Fintel.

Coinbase, Marathon Digital and Riot Platforms are down 0.6% to 1.2% this morning. Bitcoin has gained ground this week and has returned above the $30,400 threshold today. They are also finding support from hopes that we will see a bitcoin ETF launched this year, although regulators pose a risk as they have stamped on plans to launch such a product in the past.

Robinhood is also attracting traders and is up 3% before the bell, set to open at its highest level in eight months.

Property firm Zillow Group is up 5.9% after being upgraded to Overweight by Piper Sandler, which said it expects things to improve in the second half of 2023 and 2024 thanks to better conditions in the housing market. The broker believes house sales growth ‘likely troughed’ in the last quarter while mortgage rates have stabilised at higher rates. ‘We think an improving macro and share gains on top of easy compares sets up Zillow well into 2024,’ the broker said.