Good morning and welcome to the stock market today! There is a lot to take in this morning, especially in the aftermath of Fed commentary and IPO news on Tuesday. So what will the stock market do today? And what else do you need to know? Dive in with InvestorPlace below.
To start, it seems the major indices are staging a recovery after the Tuesday slump. Investors should note though that the tech-heavy Nasdaq Composite remains down. We are also seeing some big moves in the crypto world, with NFT stocks and blockchain plays gaining.
So what else will the stock market do today? Here are the top three stories.
What Will the Stock Market Do Today? Watch GameStop.
Investors should brace themselves for volatile moves in GameStop (NYSE:GME) today.
The company reported fourth-quarter earnings yesterday afternoon, and Wall Street is still not sure what to make of the news. Revenue and earnings per share figures came in below estimates, and revenue took a slight dip year-over-year. Despite all the love GameStop receives from r/WallStreetBets, it is still a brick-and-mortar video game retailer trying to navigate Covid-19 and the rise of e-commerce. Its quarterly earnings underscored that for investors.
Also concerning to many of its fans was talk of a secondary offering. Recognizing the high levels of investor interest, GameStop is looking for a way to bring in some cash to fund long-term growth. Now Redditors must determine whether their dilution worries outweigh their interests in the turnaround story.
However, the Q4 earnings report also gave GME stock a potential source of rocket fuel. The company leaned into its e-commerce narrative, outlining a series of strategic initiatives for 2021. It named a tech-savvy chief operating officer and e-commerce executives, and also talked of becoming a tech-oriented company in the next few years. Most importantly, e-commerce sales climbed 175% year-over-year.
With Roaring Kitty still on board, watch for GME stock to make a comeback, or at least for shares to embark on some wild moves.
One more thing to watch: Robinhood, the trading platform that goes hand in hand with r/WallStreetBets, has confidentially filed for an IPO. Read more about what that means here.
No Pickup Trucks for You
Were you hoping to put your $1,400 stimulus check toward a new pickup truck? You may be out of luck.
The chip shortage of 2021 is far from a new story. Factory shutdowns and other business restrictions in the early months of the pandemic weighed on production. A variety of factors have extended the pain, such as supply chain issues and a return of customer demand that occurred more quickly than chip makers anticipated. Now, all sorts of businesses are feeling the heat.
Car makers have born much of the chip shortage burden. Without chips, companies like Volkswagen (OTCMKTS:VWAGY), Honda (NYSE:HMC) and Toyota (NYSE:TM) have had to temporarily close certain factories and cut production. Electric vehicle makers have faced similar outcomes, with even beloved Nio (NYSE:NIO) warning of the production impacts it faced early in 2021.
These production shortages have now trickled their way down to dealership operators, and popular vehicles are running out of stock. The Wall Street Journal reports that for many dealership locations, pickup trucks are simply not remaining in inventory. When will those trucks (and all other cars) return at normal levels? No one knows right now.
Enter the latest news from advanced chipmaker Intel (NASDAQ:INTC). The company revealed that it will spend $20 billion to build two new chip plants in Arizona. It will also now act as a manufacturing partner, or foundry, for chip companies that need help actually producing their designs. As Kif Leswing highlighted for CNBC, this news comes at a time when the chip shortage is in the spotlight. Intel will be able to boost its overall capacity… and it is also making waves for one of its key rivals. Taiwan Semiconductor Manufacturing (NYSE:TSM) is taking a hit on the news.
The bottom line right now? Intel just thrust itself into heightened relevancy, and Taiwan Semi may face pressures to enhance its business. In the long term, this should also help address limited production capacity and other supply chain issues.
Is the Stock Market Really Rigged?
Is the stock market really rigged? According to a new survey, nearly half of Americans think the market is rigged against individual investors.
There is certainly a lot to unpack here, but two things stand out. The first is that these survey responses speak to reports of growing income inequality. Covid-19 has underscored this trend, and recent headlines have thrust it into the public conscious. Many individual investors are familiar with the massive pandemic gains of Jeff Bezos, Bill Gates, Elon Musk and Warren Buffett. Commentary from the Federal Reserve has also emphasized the uneven recovery playing out right now.
So what else should you watch? The second takeaway, as Dion Rabouin writes for Axios, is that this sentiment could lead to risk-taking behavior. If the stock market is rigged, why not make a wild bet? This makes sense in the context of major pre-merger SPAC gains, the GameStop saga and even the speculative frenzy in NFT stocks.
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.
