Coming into this past weekend, the technicals could have gone both ways. A pop or a drop could have been justified, but not many were expecting the S&P 500 to rally 7% on the day. Equities were off to another strong session in the stock market today, with the S&P 500 rallying over 3.5% at one point on Tuesday.
The market couldn’t hold those gains, though. Oil turned lower and the S&P 500 finished lower by just 0.2%.
Investors remain torn. Pessimists believe it’s a bear-market rally that will suck in longs before plunging to the March lows. Optimists believe that the lows are in and equities will continue higher.
This should certainly be an interesting month.
Another Short Alert?
Muddy Waters recently stated that it’s short iQiyi (NASDAQ:IQ), a company often referred to as “the Netflix (NASDAQ:NFLX) of China.” Muddy Waters believes the company, “fraudulently and materially overstates its users, revenues, acquisition consideration, and value of its ‘barter’ content.” Shares fell as much as 17% from the highs on the news, but have since recovered. IQ finished higher by over 3%.
Similar price action played out in Luckin Coffee (NASDAQ:LK) the day — you guessed it — Muddy Waters issued its short report on the Chinese coffee chain. While many debated the merits of Muddy Waters’ claims back in late January, the allegations ultimately were correct.
Shares of Luckin are still down more than 80% after the COO was found to have vastly overstated some of the company’s key financials.
Movers in the Stock Market Today
General Motors (NYSE:GM) was downgraded to “hold” from “buy” at Deutsche Bank due to liquidity concerns. “We see additional downside risk for US autos stocks,” the analyst said, based on “significant liquidity concerns from the prolonged production shutdown.” It could also be a concern for Ford (NYSE:F).
Facebook (NASDAQ:FB) Gaming is launching a new tournaments feature. Now in the early access stage, the platform will allow for various formats, such as single elimination and round robin. It will also allow users to invite participants to the tournaments. Big tech continues to commit resources to video games, as Amazon (NASDAQ:AMZN) gears up to launch a new title later this month.
Carnival (NYSE:CCL) had another buyer step in, this time from an insider. Carnival board member Randall Weisenburger bought $10 million worth of stock, a day after it was announced that Saudi Arabia’s Public Investment Fund purchased 8.2% of the company. Shares were up another 10.4% in stock market today, after rallying 20.2% on Monday.
Over the last three weeks, Darden Restaurants (NYSE:DRI) has seen a 70% sales drop. The company’s fiscal fourth-quarter numbers show that same-restaurant sales are down 39.1%. To help preserve cash, Darden is cutting executive pay 50%, as well as furloughing some restaurant support center employees.
Despite the news, share surged higher in the stock market today, up 12.5%.
Tesla (NASDAQ:TSLA) is gearing up to offer a long-range Model 3 to the Chinese market. Built at the Shanghai Gigafactory, the vehicle will reportedly obtain 404 miles (650 kilometers) on one charge. The sedan will launch as early as this week. Many expect it to price near 350,000 yuan before rebates.