There is an ominous feeling in the stock market today, with so many of the top market movers in the red. So what will the stock market do today? And what else do you need to know? Here are four big stories to watch.
To start, some of the top movers right now include Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), Home Depot (NYSE:HD) and AMC Entertainment (NYSE:AMC). Churchill Capital IV (NYSE:CCIV), the blank-check company from Michael Klein taking Lucid Motors public, is also steeply selling off.
Now, where do these top movers come from? Take a look at what could happen in the stock market today with these four big stories.
Pre-Market Movers: Reopening Rally Takes Hold
One theme that continues to emerge is a reopening rally. Not new on Wall Street, the idea is pretty simple. When consumers start to feel safe, and the situation with the Covid-19 pandemic eases, there will be a whole lot of pent-up demand driving spending choices. Everything consumers have not been able to do, they will suddenly want to do en masse. This supports businesses in currently risky sectors like casinos, hotels, restaurants, cruise operators and passenger airlines.
Yesterday, we got a hint that a reopening rally narrative is strengthening once again. With reservations up 30% at the start of the year for Royal Caribbean (NYSE:RCL), cruise stocks got a big boost. Similarly, Deutsche turned bullish on airlines, giving the sector a reason to rally. Top winners yesterday included American Airlines (NASDAQ:AAL) and United Airlines (NASDAQ:UAL).
Where we will go today? Keep an eye on other reopening names. One pre-market mover is Disney (NYSE:DIS), in the green after gaining 4.4% yesterday.
All About Tech
Just as reopening plays are winning, major tech names are losing. In fact, with its latest stumble, Tesla has now returned to where it started its journey in the S&P 500 back in December 2020. This comes just a few days after the leading electric vehicle maker announced its $1.5 billion investment in Bitcoin (CCC:BTC).
What is happening here? We have seen this tech selloff before during the pandemic. With investors hoping for further stimulus funding, tech stocks are losing their shimmer. Just think about! For so much of the last few months, investors have been counting on tech stocks to power their portfolios along. Now, valuation concerns are weighing on these leading names. Joining Tesla in the red are Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), two companies that largely have been pandemic winners.
Although it is not clearly entirely what to watch, keep an eye on government bonds. News yesterday that the 10-year Treasury note hit 1.3% caught investor attention. And if you are bullish on tech, stay bullish. InvestorPlace analyst Luke Lango wrote yesterday that this selloff should end soon.
#mondaythoughts. 1) The 10Yr yield (1.3%) is a long ways from pressuring equity yields (4.5%). 2) Yields are rising bc economic activity + earnings are recovering. 3) Tech will keep yields below 2% for years. Net net, this sell-off will end & soon. #buythedip $SPY $QQQ $ARKK $VUG
— Luke Lango (@LukeLango3) February 22, 2021
How Low Will Bitcoin Go? And Can Powell Save It?
Another big story from Monday promises to carry over today with Bitcoin. After the cryptocurrency plunged to $48,000 from a new all-time high of $58,000, people were paying attention. It seemed that everything was going right for Bitcoin… and still is… but price are falling.
Well, news today and later this week could reaffirm the bullish trajectory for cryptocurrencies. The House of Representatives is ready to pass a $1.9 trillion stimulus package from President Joe Biden later this week. Plus, with Federal Reserve Chair Jerome Powell likely to support a need for such stimulus, inflation fears could take back over and boost BTC. Look for another rally in the coming days as the government tackles its spending plans.
Still not sure about Bitcoin? You could also use this near-term plunge as a way to dive in to some smaller altcoins. Cardano (CCC:ADA) and Polkadot (CCC:DOT) stand out as top picks.
SPAC Attack Grows, for Better or Worse
Lastly, the SPAC market continues to heat up, for better or worse. On Friday alone, we learned that 13 new blank-check companies filed to come public.
So what should you watch in the space today? Perhaps one of the biggest names is Churchill Capital IV, under the leadership of Michael Klein. After great anticipation, the company announced its plans to bring Lucid Motors public. And perhaps surprisingly to some retail investors, CCIV stock is tumbling. Here are 10 things you should know right now.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.