Meme stocks are perking up after consecutive cooling inflation prints. Yahoo Finance Markets Reporter Jared Blikre checks out the action surrounding several meme stocks and translates what meme stock rallies could mean for the general market.
Video Transcript
- Markets on track for another day of gains as wholesale inflation rises less than expected in June. Some of the biggest movers as of late, they're meme stocks. Jared Blikre is here with a closer look at that meme trade. What it means for the broader market. Some buying activity again.
JARED BLIKRE: Yes, and that's not always the best thing for the broader market although that may be changing. First, let's take a look at some of the stocks movements over the last two months, which I have here up on our heatmap.
You take a look at Palantir, that's up almost 80%. Coinbase, lots of crypto news today, it's right there with it. Here's Palantir. You can see it really perked up in May and is holding on to these gains here as it consolidates. Take a look at Coinbase as well. As I said, up about 86%. It's really taken off today, although yesterday, it was just breaking through this resistance line that we saw from earlier in the year.
I could go through a couple other notes. Carvana is on there. But Ines Ferre is going to be talking about a JP Morgan call on that stock after the break. But let me just show you two others. Beyond Meat, and this is a stock that had perked up earlier in the year. You saw some meme-like spikes, I would call those. And is this another one? Hard to say although the volatility is expanding as the price is going up. And that's kind of a hallmark of those meme stock moves that we've seen.
Here's Kodak. This is another one that was really subdued for most of the year. I can show you three years, or a couple of years ago, during the meme stock craze, it did really spike up to $60 per share. There just a shadow of that today to show you where it's come from. But Kodak on my radar too.
Now, what I've noticed going back to last year is that when meme stocks spike, that tends to be a signal that the general market is about to roll over. And I've plotted seven of my favorite meme stocks here that seem to have a little bit of predictive value and charted them on the S&P 500 going back to the beginning of 2021.
Now, this was a bull market. And you can see some of these clusters predicted small pullbacks in the market. But it was really last year. They would spike in this bear market. Anytime you got a spike on these meme stocks, you would have the market kind of retrace shortly thereafter. Here are a few more.
But an exception. So with this last squeeze up at the beginning of June, we didn't see a retracement, really, of any kind. The market just sped up here. And now we're seeing another cluster. So the big question on my radar is, are we going to see the market roll over? Or is it strong enough it's just going to rise with these meme stocks? We'll have to see, guys.
- Hoping for the latter there, Jared. Jared Blikre, thanks so much for breaking that down.
