Good morning and welcome to the stock market today. It seems that Wall Street has a bad case of the jitters, with equities mostly down to start Thursday. We learned that another 745,000 Americans filed for initial unemployment benefits last week, and everything is a bit uneasy. So what will the stock market do today? Dive in below.
To start, what are the top movers? Oddly enough, outlet mall specialist Tanger Factory Outlets (NYSE:SKT) is seeing double-digit gains on a r/WallStreetBets rally. Other top names include Snowflake (NYSE:SNOW), Okta (NASDAQ:OKTA) and Vroom (NASDAQ:VRM), all moving on earnings.
So really, what will the stock market do today? Here is a look at the top three stories.
What Will the Stock Market Do Today? Watch Powell.
Federal Reserve Chair Jerome Powell will speak at The Wall Street Journal Jobs Summit at 12:05 p.m. Eastern. There, many investors expect him to address inflation and real bond yields, especially as concerns grow on Wall Street.
As a quick recap, investors are worried about inflation. A $1.9 trillion stimulus package is on the table in Congress, and the Federal Reserve has not yet shied away from its own Covid-19 measures. Retail and institutional investors alike think this could boost inflation, and ultimately, cause the Fed to raise interest rates. For the duration of the pandemic, Powell & Co. have kept their benchmark rates at near-zero levels. At the same time, we have seen yields on the 10-year U.S. Treasury notes climb, hitting as high as 1.6% in recent days.
In turn, this puts pressure on growthy tech stocks.
Today, investors want to see what Powell is thinking. Is he going to touch interest rates? What does he think about inflation concerns? And is he comfortable with current yields?
As Omkar Godbole wrote for CoinDesk this morning, Bitcoin (CCC:BTC) is in a similar spot to tech stocks because investors want to know where risk sentiment is headed. If Powell addresses the concerns and promises to monitor the markets, BTC and growth stocks could see a boost. If he downplays the concerns, Godbole sees continued weakness.
What Do Esports and Outlet Malls Have in Common?
Reddit.
Today, esports names like Super League Gaming (NASDAQ:SLGG) and Allied Esports Entertainment (NASDAQ:AESE) are on the move. And perhaps unsurprisingly, it seems that this is the work of subreddit r/WallStreetBets. Remember last week, when Citron Research suggested GameStop (NYSE:GME) purchase Esports Entertainment (NASDAQ:GMBL) to further its turnaround story? It turns out that many Redditors took that to heart. Not necessarily the GMBL part… but the part about actually creating a way to send GameStop to the moon through business innovation.
Enter a mysterious tweet. On Feb. 24, GameStop CEO Ryan Cohen tweeted out a photo of a McDonald’s (NYSE:MCD) ice cream cone and a frog emoji. Super League Gaming CEO Ann Hand worked at Project Frog and at McDonald’s. Does that mean a partnership for SLGG and GME is coming? To some Redditors, it does. And just in case, it seems that AESE is moving in sympathy.
Tanger Factory Outlets is also getting a boost today thanks to Reddit.
As Robert Lakin wrote this morning, SKT stock has an unusually high short interest. This, coupled with the impact of Covid-19 on business, helps it stand out to the r/WallStreetBets crowd. Shares were up 8% on heavy volume at the time of writing.
Big Tech, Big Moves
There is another catalyst for Big Tech beyond the Federal Reserve.
Many of the top names in 2020 were winners in a pandemic world. Now, investors are positioning their portfolios to exist the pandemic and come out on top in reopening trades. This has benefitted ride-hailing giants Lyft (NASDAQ:LYFT) and Uber (NYSE:UBER), as well as cruise operators and passenger airlines.
What does this mean for the major tech stocks that soared in 2020? It means it is time for businesses to think about their roles in a post-pandemic world. As Ari Levy wrote for CNBC, this matters for names like Zoom (NASDAQ:ZM), DoorDash (NYSE:DASH) and Peloton (NASDAQ:PTON).
While inflation rates and bond yields are certainly weighing down tech stocks, the reopening narrative is not helping matters either. Keep a close eye on your favorite names, and look for new opportunities that can thrive in a world beyond the pandemic.
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.
