Good morning and welcome to the stock market today! The major indices are pulling back, Redditors are working their magic in another sector and vaccines are the talk of the town. So what will the stock market do today? After you apply to take a ride on a SpaceX rocket, take a look at some of these top stories.
To start, what are some of the top market movers? We have Rocket Companies (NYSE:RKT) and UWM Holdings (NYSE:UWMC), moving along with Reddit sentiment. Other top names include KemPharm (NASDAQ:KMPH), which is benefitting from its ADHD drug, and Ocugen (NASDAQ:OCGN), which is soaring on Covid-19 trial results.
Dive in with InvestorPlace below for the rest of the stock market news.
What Will the Stock Market Do Today? Scroll Reddit.
Once again, Redditors are driving market moves.
Except this time, the focus of r/WallStreetBets is not struggling retailers or tech companies embarking on major turnarounds. This time, a handful of mortgage originators are sparking interest.
Yesterday we saw the start of this rally with Rocket Companies, a popular mortgage originator that came public in 2020. Its stock raced as high as 70%, ultimately pulling back in morning trading. Today, UWM Holdings, or United Wholesale Mortgage, is seeing similar price action.
What is going on? Why are Redditors attracted to mortgage originators? Both companies have shared positive announcements in recent days. Last week saw favorable earnings from Rocket, and UWM shared that it is under consideration for inclusion in the Russell 1000 and Russell 3000 indices.
It turns out that there are two more interesting angles here. The first is short interest. Just like GameStop (NYSE:GME) and AMC Entertainment (NYSE:AMC), Rocket is a heavily shorted stock. Roughly 40% of its available shares are sold short, echoing recent narratives of a short-squeeze rally. Short interest on UWM Holdings is also growing. Perhaps then r/WallStreetBets is willing to capitalize on short squeeze potential wherever it exists. Whether you have a brick-and-mortar video game retailer or a newly public mortgage originator, such a squeeze will result in the same pain for short-sellers.
However, investors also should pay attention to the broader narrative in the housing market. Last week, yields on the 10-year Treasury note climbed to 1.6%. With talk of inflation growing, and stocks predictably falling, Treasury yields were a great cause of concern. These rates are having ripple effects across the market. As Dion Rabouin wrote for Axios this morning, the housing market is slowing down. Home sales missed expectations, and rates for the 30-year fixed mortgage rose to 3.23% week.
The Federal Reserve may take a stand. Look for commentary about these rate moves when Chair Jerome Powell attends a virtual event later today.
A Moonshot Bet on Covid-19 Shots
At the start of the pandemic, seemingly every biotech or pharma company was working on a Covid-19 vaccine. This meant investors had many plausible opportunities for profit. Leading pharmaceutical firms were in the same boat as biotech startups. Everyone just wanted to harness novel technology to defeat the pandemic and bring about a return to normal. Oh, and everyone also just wanted to make money.
In the months that followed, we know that a few companies emerged at the top. Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) led the way in the United States. AstraZeneca (NASDAQ:AZN) stumbled, but has still started to roll out in the United Kingdom, India and other countries. And Johnson & Johnson (NYSE:JNJ) re-emerged in the public eye with a one-shot vaccine and U.S. Food and Drug Administration approval.
This means that three companies are now carving up the U.S. market. However, investors are not ready to give up on any of their moonshot bets.
Two of those companies are Novavax (NASDAQ:NVAX) and Ocugen. The hope for Novavax is that it secures approval in the U.K. From there, the company would hopefully soon receive emergency-use authorization in the U.S. NVAX stock would thrive. For Ocugen, the story is all about partnerships and commercialization rights. There is already a vaccine, COVAXIN, from Bharat Biotech in India. There, COVAXIN is one of two vaccines being administered to the population. Now Ocugen just needs Bharat to wrap up its clinical trials, and to get the FDA on its side.
What to watch? OCGN stock is on a roll this morning. Interim results from Bharat Biotech show an efficacy rate above 80%. That should bode well for any conversations with the FDA.
Take Grandma on a Cruise?
It makes sense that as we get Covid-19 vaccine news, we also see things perk up in reopening plays.
On that note, there are two headlines to watch today. The first comes from ride-hailing Lyft (NASDAQ:LYFT). Lyft just announced that the last week of February was its best since pandemic restrictions began in March 2020. Ride-hailing businesses have particularly struggled, and this is boosting the bull case for Lyft and rival Uber (NYSE:UBER). Wedbush analyst Dan Ives is one of those bulls, with a 12-month price target of $72 on LYFT stock.
The other headline comes from the seas. Macquarie analysts Paul Golding and Charles Yu are upgrading cruise stocks like Royal Caribbean (NYSE:RCL), Carnival (NYSE:CCL) and Norwegian Cruise Line (NYSE:NCLH). Also helping matters? Carnival said its Holland America Line is open for bookings for the 2022-23 season.
It looks like family cruises complete with tacky matching outfits will be back sooner rather than later. For many investors, that is a very good thing.
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.
