Welcome to the stock market today! The major indices are near record levels, but a disappointment from Amazon (NASDAQ:AMZN) appears to be hampering stocks. In its quarterly update, Amazon shared that a drop in pandemic-driven e-commerce spending will slow revenue growth. While not necessarily a surprise, investors are still reacting poorly to the news. So, considering all the red, what will the stock market do today?
- The S&P 500 is down 0.4%
- The Dow Jones Industrial Average is down 0.19%
- The Nasdaq Composite is down 0.66%
So what will the stock market do today? Here are some of the top stories.
What Will the Stock Market Do Today? Brace for a Selloff.
Writing for Axios this morning, Sam Ro recommends prepping your portfolio for a selloff.
On one hand, Ro argues that with the stock market near record levels, it simply makes sense to take some time to be prepared for a change in direction. On the other hand, he points to a few headwinds that make preparation a bit more of a pressing task. The Delta variant remains top of mind, and the White House is not ruling out further lockdowns to contain its spread. The U.S. is expected to hit the statutory debt ceiling on Aug. 1. And, with the Federal Reserve seemingly always in focus, talk of tightening monetary policy is top of mind.
InvestorPlace contributor Faisal Humayun recently touched on this uncertainty, and on what it could mean for the market. While overall bullish, he said he would not be surprised to see a roughly 20% correction from current levels.
So what should you do if you agree with the likes of Ro and Humayun? Well, consider adding defensive stocks to your portfolio. Humayun recommends these seven top names:
- Pfizer (NYSE:PFE)
- Costco Wholesale (NASDAQ:COST)
- Procter & Gamble (NYSE:PG)
- Dollar General (NYSE:DG)
- Rio Tinto (NYSE:RIO)
- Lockheed Martin (NYSE:LMT)
- BP (NYSE:BP)
Robinhood Mets Discord?
Yesterday, much of Wall Street was focused on the Robinhood (NASDAQ:HOOD) initial public offering. In an effort to democratize investing, Robinhood emerged with an easy-to-use trading platform (so easy some regulators have called it “addicting”). It also largely lead the way with commission-free trading, forcing larger brokers to follow suit.
While its elite critics say Robinhood has made it too easy for retail investors to buy stocks like GameStop (NYSE:GME) without any fundamental market knowledge, that is also where it gets its appeal. Robinhood, especially during the Covid-19 pandemic, helped reach a new market of investors.
Hard to separate is the role that social media sites like Reddit and Discord play in this revolution.
As InvestorPlace Markets Analyst Thomas Yeung recently explored, a new class of day traders came to rely on r/WallStreetBets for sentiment information. Then, they started to turn to Discord, the chat and livestreaming platform. There, on any given day, users create what Yeung calls “herding effects” when sharing trade ideas on livestreams. Newegg (NASDAQ:NEGG), Exela Technologies (NASDAQ:XELA) and other popular short squeezes likely found their legs on Discord.
So in short, there is no denying that Discord, Robinhood, and the day traders that frequent these platforms have a powerful relationship. Now one company wants to control the whole process.
In the midst of the Robinhood IPO yesterday, Trading.TV launched with $6.1 million in seed funding, a fintech platform for the creator economy. The first phase promises livestreams and chats, with a $1 million fund to attract some of the top market content creators. But most importantly, Trading.TV plans to one day roll out its own commission-free trading platform. In this world, a Trading.TV influencer could share a day trading pick, and a user could quickly click through and make a trading.
Whether or not Trading.TV succeeds at marrying Robinhood, Discord and the creator economy remains to be seen. However, what it promises is increasingly relevant. Take note.
What Else We’re Watching
- Robinhood (NASDAQ:HOOD) may have disappointed on its first trading day, but the online brokerage still attracted some celebrity investors. According to trade summaries from Ark Invest, Cathie Wood bought 1.3 million shares of HOOD stock.
- Are you feeling the Delta variant pinch? As companies and government officials continue to grapple with new guidance, some consumers are taking matters into their own hands. According to the latest data, face mask sales were up 24% week over week. On a similar note, Israel announced it will make booster vaccines available to those over 60 years old.
- Disney (NYSE:DIS) may be about to feel the heat. Black Widow star Scarlett Johansson filed a lawsuit against Disney yesterday. Johansson claims that the direct release of Black Widow to Disney+ violates her contract and pressured her earnings from the film. Disney is pulling the pandemic card, but Johansson speaks to a complication in the direct-to-streaming world. Can her Avenger status help her win in court?
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.