Good morning and welcome to the stock market today! Investors are bracing themselves for another busy day of trading on Wall Street, and another informal holiday is kicking off. So what will the stock market do today?
To start, the major indices are all in the red despite promising news on the jobless claims front. Last week saw 547,000 Americans file for initial unemployment benefits, a pandemic-era low. Still though, the S&P 500 is down 0.28% and the Dow Jones Industrial Average is down 0.31%. The Nasdaq Composite is down 0.27%.
So what else will the stock market do today? Here are the top three stories.
What Will the Stock Market Do Today? Talk Shortages.
Did you forget about the ongoing chip shortage of 2021?
Automakers definitely have not — in fact, the situation continues to drag out and weigh on top companies in the business of making cars. General Motors (NYSE:GM), Volkswagen (OTCMKTS:VWAGY), Nio (NYSE:NIO) and Toyota (NYSE:TM) have all had to idle plants or cut production in recent weeks. Simply put, without enough chips, these automakers cannot maintain production at normal rates. Sales lots are thinning, and certain in-demand vehicles are hard to keep in stock. Ford (NYSE:F) is another automaker that has suffered thanks to the chip shortage.
Like its peers, Ford has idled factories and otherwise cut production. However, those measures do not appear to be enough. Just yesterday, the company announced it was planning more downtime at five North American factories. One plant in Ontario that produces SUVs will be on pause for a week in early May. Plants in Chicago, Detroit and Kansas City will face closures through May 14. At stake? Production of its F-150 pickup truck, one of the top money-making vehicles for the company.
So where do things go? Semiconductor companies are upping their investments in plants, hoping to catch up with demand. President Joe Biden is also talking about beefing up the supply chain, in order to prevent future shortages. In the meantime, however, automakers will face a lot of pain.
Also complicating matters: Huge growth in electric vehicle demand could cause a shortage that runs through 2023. As Bloomberg reported, SK Innovation says wet-type separators, a key component in lithium-ion batteries, are running into a supply shortage. Investors should keep this story on their radar.
The SEC Is Staying Busy
Yesterday, news hit Wall Street that the U.S. Securities and Exchange Commission was tracking a boom in the SPAC market. Today, it seems the regulatory agency has a few other goals.
One of those is in response to the Archegos Capital Management fallout. The family investing office defaulted on margin calls, forcing its brokers like Credit Suisse (NYSE:CS) and Nomura (NYSE:NMR) to unload positions in major block sales. Credit Suisse will face ongoing pain, and several of the affected equities have seen volatile moves. Class B shares of Discovery (NASDAQ:DISCA, NASDAQ:DISCB) stock have even seen a major short-squeeze pop as a result.
These block sales were massive, and they were in response to massive exposure. However, it does not appear that Archegos had ever filed a form 13D or 13F with the SEC. Now, the SEC wants to prevent this situation from happening again. To do so, it is considering changing the disclosure requirements for investment firms. One path forward would be to require these firms to disclose derivatives on forms 13D and 13F, instead of just large stock holdings.
But Redditors, take note. The derivatives of Archegos are not the only issue in the spotlight. Following the GameStop (NYSE:GME) frenzy, the SEC is also considering requiring investment firms to report their short positions.
Take a Gamble on Casino Stocks?
Last week, Matt Villano wrote for CNN that Las Vegas was going to emerge out of the pandemic better than ever before. There are new casinos, new restaurants and new innovative attractions designed to convince customers to make a trip to the Las Vegas Strip.
Casino stocks are ready to take advantage of this reality. Like many other travel and leisure equities, casinos struggled at the beginning of the pandemic when Las Vegas and Macau became ghost towns. Business closures kept doors closed, and other Covid-19 restrictions kept many would-be travelers at home. This created an opportunity for companies with online gambling offerings.
Now, it seems travelers are ready to take a gamble on casinos and the underlying casino stocks. At play are some of the usual reopening themes, like an ongoing vaccine rollout and positive economic indicators. Also helping matters is the fact that the Resorts World Las Vegas location is finally set to open on June 24, after years of construction. Resorts World will be one of the largest casino projects in Las Vegas ever, and it will connect live performances with exciting new restaurants and even an underground tunnel system from Elon Musk. The hype around this opening could stir up enthusiasm for other casino stocks.
One thing to watch? Casino companies are not recklessly abandoning online gambling trends. Just today, Caesars Entertainment (NASDAQ:CZR) announced that it completed the $4 billion acquisition of William Hill (OTCKMTS:WIMHY). This will give Caesars access to physical locations in England and a growing portfolio of online sports betting and gambling solutions. Be sure to keep this story on your radar.
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.
