Good morning and welcome to the stock market today! Meme stocks and cryptocurrencies are once again the talk of Wall Street, and the major indices are pushing higher. So what will the stock market do today? Dive in with InvestorPlace below.
- The S&P 500 is up 0.28%
- The Dow Jones Industrial Average is up 0.26%
- The Nasdaq Composite is up 0.28%
So what else will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Head to the Moon.
AMC Entertainment (NYSE:AMC) and its meme stocks peers are not slowing down.
The story here should feel very similar. Retail investors want to prove hedge funds and other short-sellers wrong. In doing so, they are looking to profit from volatile short squeezes. Potentially, they are also hoping to see these struggling equities commit to turnaround stories and long-term growth plans. For AMC, a snippet of that potential future is emerging.
Yesterday, AMC made headlines when it shared that Mudrick Capital had purchased 8.5 million shares for $230 million. This cash injection would help the company pay down its debt and look to the future. As executives said, it would position the theater operator defensively for a reopening world.
In just a blink of an eye, Mudrick flipped those shares, calling them overvalued. The end result was $250 million of cash and a lot of social media chatter. It seems that despite the frenzied sale, investors still see the events as bullish for AMC Entertainment.
But perhaps the most important detail so far this week comes from a new program under CEO Adam Aron. On Wednesday morning, the company unveiled AMC Investor Connect, a new initiative to connect with its millions of retail shareholders. Aron has previously shared his support for the meme stocks crowd, and leaned into that narrative on Wednesday, sharing that he works for the retail holders.
With that in mind, AMC Investor Connect is a new way for retail investors to self-identify and reap the benefits of their commitment to the theater company. The first perk is a free large popcorn, and the company says it will work to provide other shareholder-exclusive deals in the coming weeks and months.
As InvestorPlace contributor Robert Lakin highlighted, it may be a small price to pay the Reddit crowd that helped AMC avoid bankruptcy. But it speaks to a growing recognition by companies of the retail investors powering shares higher.
To the Moon… or Coinbase Pro
Yesterday, Coinbase (NASDAQ:COIN) finally answered the cries — or howls — of Dogecoin (CCC:DOGE-USD) investors. The cryptocurrency exchange announced that trading of the meme coin would officially begin on its Coinbase Pro platform on June 3. Until then, customers will be able to transfer their existing DOGE holdings into their Coinbase accounts.
Why does this news matter?
Importantly, investors have long been petitioning Coinbase to facilitate Dogecoin trading. The exchange is one of the largest in the United States, and offers great legitimacy. In fact, studies have shown that cryptos outperform in their first few days of trading on the platform thanks to the Coinbase effect. This alone may be exciting to the Dogecoin army.
Beyond that, it is the first piece of big Dogecoin news in several days, and it comes at a time when the cryptocurrency market faces great headwinds. For a brief period, DOGE even dropped off the most-searched crypto list on CoinMarketCap. Without updates from thought leader Elon Musk, nothing was moving prices.
Found this pic of me as a child pic.twitter.com/hUEKluRAdP
— Elon Musk (@elonmusk) June 2, 2021
While investors wait for a more meaningful update from Musk on Dogecoin — such as whether his Tesla (NASDAQ:TSLA) will start accepting it for payment — this meme will have to do.
So what is the bottom line? Dogecoin is finally getting a real vote of confidence from Coinbase. Retail investors are celebrating, but half of their attention is going to AMC and BB.
Abbott Labs Is Failing a Big (Covid-19) Test
Over the course of the last several months, analysts tried to imagine the post-pandemic world. One vision saw consumers lined up, smartphones in hand, to receive ultra-fast Covid-19 tests before attending concerts, weddings, or even going grocery shopping. This would rely on test kit providers and the technology of vaccine and test passports. The thinking was that such a system would allow a truly safe reopening, and get consumers back to daily life.
Then, the Centers for Disease Control and Prevention eased their restrictions. All of a sudden, fully vaccinated individuals could stop wearing masks in many indoor and outdoor settings. States let up on gathering restrictions. Social events of all sorts came roaring back.
Widespread testing was not a key part of this story, and it may never be.
With that in mind, Abbott Laboratories (NYSE:ABT) cut its profit guidance for the rest of 2021 and saw its stock fall 9% on Tuesday. Simply put, the company just does not see demand for Covid-19 tests holding steady.
For investors, ABT stock still has a lot to offer, and as Bob Herman highlighted for Axios, it is still highly profitable. However, it is an illustration that what worked during the pandemic… and what investors assumed would work for years to come… may not work any more in our new normal. Zoom (NASDAQ:ZM), which stumbled itself after warning growth could slow, could be another example.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Sarah Smith is the Editor of Today’s Market with InvestorPlace.com.