What a way to start the week! The major indices flip-flopped, investors chased down information on block sales like cyber detectives and Wall Street paid close attention to news about space stocks. So what all did the stock market do today? Dive in with InvestorPlace below.
To start, the major indices saw some swings in the stock market today. The Archegos Capital Management drama had investors afraid of volatility, and other economic indicators were under scrutiny. The S&P 500 shed 0.09%, while the Nasdaq Composite shed 0.6%. Despite dropping earlier, the Dow Jones Industrial Average gained on the day, adding 0.3%.
So what else did the stock market do today? Take a look at the top three stories below.
What Did the Stock Market Do Today? Look to the Sky.
Rocket ship emojis get a new meaning tomorrow when the Ark Space Exploration ETF (BATS:ARKX) starts trading. The latest exchange-traded fund from Cathie Wood — her first new ETF in nearly two years — already has Wall Street on edge. That is because retail investors see Wood as something like a modern-day Warren Buffett. Her early bets on Tesla (NASDAQ:TSLA) and Bitcoin (CCC:BTC) have given her the reputation of an innovative and forward-thinking fund manager.
Now, she is making a big bet on space exploration, and retail investors want to follow suit.
This means that news of the ARKX ETF release tomorrow has been a powerful catalyst. Investors frantically consumed updates on the fund, including its top 10 holdings. That list features Trimble (NASDAQ:TRMB) and Kratos Defense & Security (NASDAQ:KTOS), as well as the L3Harris (NYSE:LHX). The holdings focus on orbital and suborbital aerospace companies, enabling tech companies and aerospace beneficiaries.
Perhaps one of the biggest takeaways for investors is that several high-flying space stocks are not on the list. Virgin Galactic (NYSE:SPCE) comes in at just a 1.95% weight, and top space SPACs do not make the cut. This could create downside pressure for Holicity (NASDAQ:HOL), Stable Road Acquisition (NASDAQ:SRAC), New Providence (NASDAQ:NPA) and many others. We may see moves in these names tomorrow, just as we may see a continued spike in TRMB stock and KTOS stock.
Electric Vehicle Stocks Need to Get Into Gear
Top electric vehicle stocks continue to lag the broader market, with investor favorites ending Monday trading in the red once again.
Nio (NYSE:NIO), Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) all found themselves declining on Monday for a variety of reasons. The ongoing chip shortage continues to hinder production, and Nio kicked off its five-day production halt today. Chinese experts are also calling out electric automakers for product recalls, false range claims and harsh competition. Although the electric vehicle market in China continues to boom, U.S. investors are getting a clearer picture of where things stand.
Similarly, Churchill Capital IV (NYSE:CCIV) once again found itself in the red ahead of the Lucid Motors SPAC merger. Although there was no one reason for the decline, Lucid Motors has found itself generating lots of news. One negative weighing on the company is a lawsuit out of Illinois. There, car dealerships are angry with Lucid and Rivian for their direct-to-consumer sales model.
With these headwinds in place, is it time to ditch EV stocks in the driveway?
Mark Haefele, chief investment officer at UBS, does not think so. Acknowledging the short-term disruptions, Haefele still believes that longer-term shifts in tech and environmental consciousness will support electric vehicle stocks. However, he is calling for investors to diversify their exposure to these hot names. This will protect portfolios from tech- and company-specific risks.
With that in mind, investors can also look for positives in companies like NIO stock and CCIV stock.
InvestorPlace Web Editor Vivian Medithi found the silver lining for both today. For Nio and its Chinese peers, plans for second listings on the Hong Kong Stock Exchange are promising. These listings will expose them to even more excited investors and help these EV stocks gain access to capital. For CCIV stock and Lucid Motors, investors can find a reason for optimism in news of a new $25,000 car. If Lucid Motors can bring its high-profile name to more accessible vehicles, it could find success.
Keep your eye on this space. Hopefully the coming weeks will see things turn around.
Discord: Microsoft’s Smartest Business Move?
According to InvestorPlace Markets Analyst Joanna Makris, Microsoft (NASDAQ:MSFT) may have made one of its smartest business moves yet when it put in a $10 billion bid for Discord.
Discord is no doubt a popular social media platform, bringing gamers together with voice, text and video chatting features. In fact, Discord has been credited with inventing the future of the internet, and its founders compare the user experience to an online neighborhood. The company generated $130 million in revenue in 2020, up nearly 190% year-over-year. With 6.7 million active servers and 140 million active accounts, many analysts have been bullish on a potential Microsoft acquisition.
Makris is too, but she is careful to distinguish her reasoning.
Unlike others on Wall Street who focus on Discord as a social play — perhaps a consolation prize for the failed Microsoft TikTok bid — Makris sees it as a smart tool in digital transformation. This is because she sees Discord as truly relevant for all types of communication, including for businesses. Discord could help Microsoft level up from Skype and LinkedIn, and give its Azure cloud solutions more beef.
How should you proceed? Makris says it is time to buy MSFT stock and hold it now. You can read more of her argument here.
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.
