Good morning and welcome to the stock market today! As investors continue to wait for an update from the Federal Reserve, there is a lot to process. So what will the stock market do today? And what else do you need to know? Dive in with InvestorPlace below.
To start the day, the major indices are split. The S&P 500 and the Nasdaq Composite have pulled themselves into the green. The Dow Jones Industrial Average has not been so lucky.
So what else will the stock market do today? Here are the top three stories.
What Will the Stock Market Do? Get Revenge.
The team over at Robinhood Snacks is betting on the revenge economy.
What does this mean? Well, since the start of the pandemic, American consumers have cut back on once normal spending habits. There has been no need to buy office attire and consumers have been unable or unwilling to travel. With the Covid-19 vaccine rate climbing and a sense of optimism returning to the stock market, consumers may be about to get their revenge on the pandemic. In practice, that would like a lot of credit cards swiping at businesses and restaurants. It would also look like flights, cruises and hotel stays.
For investors, this revenge spending will likely bring a handful of short-term pops. Makeup retailer Ulta (NASDAQ:ULTA) is already seeing its sales improve in 2021, and Urban Outfitters (NASDAQ:URBN) reports more customers are buying clothes to wear for going out. Even department store dinosaur Macy’s (NYSE:M) is enjoying some time in the spotlight.
But does that mean you should park all your money in these revenge economy stocks?
InvestorPlace analyst Luke Lango is still betting on long-term growth trends, and he thinks you should be too. Although there is money to be made in this first wave of pandemic recovery, retail investors who identify trends that will matter for years to come will be in a better place.
The S&P 500 Makes Some New Friends
Tesla (NASDAQ:TSLA) is about to have some new friends in the S&P 500. The benchmark index will be switching up its holdings prior to the start of trading on March 22.
The in crowd will include Penn National Gaming (NASDAQ:PENN) and Caesars Entertainment (NASDAQ:CZR), as well as NXP Semiconductors (NASDAQ:NXPI) and Generac (NYSE:GNRC). Those leaving the index include Xerox (NYSE:XRX), Flowserve (NYSE:FLS), SL Green Realty (NYSE:SLG) and Vontier (NYSE:VNT).
What does this mean for investors? The first takeaway is that the new entrants may all see a boost prior to the reindexing. Tesla itself saw a buying frenzy over S&P 500 enthusiasm, and history has established this connection.
Investors should also see these moves as indicative of what matters to Wall Street right now. PENN and CZR speak to one big emerging theme. Not only do investors want to see more states open their doors to gambling businesses, but esports and online gambling have gotten a big Covid-19 boost. NXP, like other semiconductor companies, has been in the spotlight thanks to an ongoing chip shortage.
As Dion Rabouin wrote for Axios, Tesla was a speculative addition to the S&P 500. Although the company has solidified itself as a leader in a hot industry, wild swings in share prices are not for the faint of heart. Adding in PENN and CZR brings more of that narrative.
JPMorgan Wants to Take a Cruise
Analysts over at JPMorgan Chase are ready to hit the seas, and they are waiting on guidance from the Centers for Disease Control and Prevention.
In all seriousness, analysts think the CDC will be issuing new guidance for cruise operators soon. Right now, cruise ships are ready to benefit from the reopening narrative. However, a current conditional sailing framework has been limiting cruise operations. The CDC is prioritizing testing crew members to see how prevalent Covid-19 is on ships. It also still cautions that no one should board cruises or river boats at this time, classifying cruise travel as coming with a “very high” level of Covid-19 risk.
JPMorgan is hopeful that coming guidance will ease those restrictions and be more favorable for cruise stocks. Investors should watch Carnival (NYSE:CCL), Royal Caribbean (NYSE:RCL) and Norwegian Cruise (NYSE:NCLH) very carefully.
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.