Good morning and welcome to the stock market today! We are almost at the end of the week, but that does not mean the investing news cycle is slowing down. Grab your second (or third) cup of coffee, and dive in with InvestorPlace below. We have a rundown of what you can expect the stock market to do today.
To start, what has happened so far this morning? Early trading brought wild moves in a series of biotech and NFT stocks. The latest commentary from the Federal Reserve has investors a bit spooked, and the Suez Canal drama continues to inspire memes and poetry. Lastly, in perhaps the most horribly on brand moment of 2021, Ja Rule sold an NFT painting of the Fyre Festival for $122,000.
So what else will the stock market do today? Here are the top stories to watch.
What Will the Stock Market Do Today? Examine the Economy.
Despite all the headline-grabbing inflation fears, it seems like the economy is actually healing.
This morning investors learned that 684,000 Americans filed for initial jobless benefits in the past week. That marks a pandemic-era low, and brings the report below the 700,000 threshold that has held steady for months. It also comes in below expectations for 730,000 claims.
At the same time, Wall Street analysts are starting to boost their 2021 earnings estimates for the stock market. As economists brighten their GDP forecasts, analysts are taking a look at their own predictions. Things are getting better, with the exception of a weather-driven drop in February. That means corporate revenue and earnings could really start to look up later in the year.
What does this all mean for investors? Consider it a part of the narrative we are already hearing. The economy is improving more quickly than anticipated, but there are still people and businesses that need a lot of help. As InvestorPlace Luke Lango puts it, we just need to keep relying on growth stocks and make it into the second quarter. Consider this short-term struggle an opportunity.
Growth stocks are being punished despite falling yields. As I've said before, until we get through Q2 and see inflation tame down on the other side, growth stocks will struggle thx to the reflation trade. The thing is, if you're a long term investor, this "struggle" = opportunity
— Luke Lango (@LukeLango3) March 24, 2021
Are SPACS About to Feel Some SEC Heat?
Today brought no shortage of blank-check company news. Jaws Spitfire (NASDAQ:SPFR) was climbing on news that both Cathie Wood and Elon Musk are bullish on its acquisition target. EV target Arrival (NASDAQ:ARVL) made its trading debut. Redfire confirmed its merger with Genesis Park Acquisition (NASDAQ:GNPK), giving investors yet another space SPAC.
However, recent trading days have not been kind to SPAC names.
Beyond what many are dubbing a bear market for special purpose acquisition companies, it seems that the U.S. Securities and Exchange Commission wants to put these deals under the microscope. According to a new Reuters report, people familiar with the SEC have confirmed it is looking for information.
What does it want? Right now, Reuters writes that the SEC wants information about deal fees, volumes and internal controls for regulating the deals. In other words, given the tendency of high-profile blank-check companies to rocket higher, are investment banks taking any precautions? And what risks are these banks tracking?
This quest for information could turn into something more. Some are speculating that the SEC will use this as a launching pad for a more formal investigation.
So what should you do? Keep in mind that blank-check companies are far from a new route to the public markets. However, these last few months have seen an explosion in companies choosing this path. Following the GameStop (NYSE:GME) frenzy and a crackdown on social media manipulation, regulators may just be trying to do some due diligence of their own. Be sure to watch this story. And in the meantime, expect the SPAC deals to keep flowing.
Fitness Stocks Are Starting to Sweat
Despite the efforts of some gym-loving protestors to prove otherwise, you really can get a good workout in at home.
More than year into the pandemic, and fitness stocks are really starting to get the memo. Like other industries that rely on in-person gatherings, gyms began to struggle in the first months of Covid-19. They closed their doors, saw members cancel passes and worked to navigate operations with limited capacities and social distancing requirements. All along, the hope has been that when it is safe to fully reopen, fitness buffs (and anyone who gained a few pounds at home) would find their way back to the gym.
That logic has worked for cruise stocks, airline stocks, casino stocks, restaurant stocks — you name it. But that logic has not worked so far for fitness stocks, and some analysts are starting to give up hope.
As Dion Rabouin wrote for Axios today, fitness stocks may be meeting their end. Recent survey data highlight that 71% of gym members are still not exercising at their gyms. Over a third of members in the United States do not plan to go back at all.
So what should investors do with this news? Right now it seems that fitness stocks are not likely to be beneficiaries of that pent-up demand catalyst. Keep this in mind as you evaluate names like Planet Fitness (NYSE:PLNT).
Bonus Story: Keep an Eye on Amazon
Investors have a new chapter in the Amazon (NASDAQ:AMZN) story to consider. A week after signing a $1 billion deal with the NFL for exclusive streaming rights to Thursday night games, we are learning that there is more on the table. According to the latest reports, Amazon will be bringing thousands of exclusive NFL products to its platform.
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.