Meme stocks are on the move again
Mimi shares joined Stock market rally 2023
Since the Standard & Poor’s 500 Index (^ GSBC(Recent low on October 27, Roundhill Meme ETF)Mimi(by 15.2%, while the GlobalButz) by 17.4%. Both outperform the recent 10% rise in the S&P 500 and have also produced higher returns than this year’s benchmark index.
Each area has jumped recently and surfed the market’s rise Many pockets of the market that were crushed in 2022 have benefited from thissuch as growth stage technology.
Unlike the big tech companies, for which 2023 is going to be a big year Much to the hopes of artificial intelligenceThe Fed and the light at the end of the tunnel of raising interest rates play the main role.
“Meme stocks tend to be unprofitable, so they particularly benefit from lower prices since they have a greater need for more affordable capital raising,” DataTrek co-founder Jessica Rapp explained in a note Monday night.
For Rabe, the resurgence of meme stocks sends a clear message to investors.
“The current positive momentum for Mimi shares shows that the animal spirit of investors is starting to rise again,” Raby said.
The measures Rabe uses to track meme traffic aren’t exactly representative of some classic meme stock names like GameStop (GME) or AMC (Your mother), which are actually down more than 10% in the past month.
The top five holdings in Roundhill’s Meme ETF are Block (Field), Coinbase (currency), phase energy (nose), Draft Kings (DKNG) and super micro computer (SMCI). Shares of DraftKings, Super Micro, and Coinbase have soared this year, each rising 200% or more. With more than 15% of the funds invested in Nvidia (NVDA), the BOTZ ETF rode the coattails of the recent 2023 AI darling rally.
In the past five days alone, all five of these stocks have risen by at least 8%, representing a clear shift in investor sentiment during the recent rally. It is worth noting that Block and Coinbase also have significant exposure to Bitcoin (Bitcoin-dollar), which is up more than 20% over the past month and is hovering near 52-week highs.
As Raab noted, investors have been largely selective this year “given the challenging macro environment due to tight monetary policy and geopolitical risks.” This led to a market rally in 2023 led by “Brilliant 7“Technology stocks while other areas of the market, Such as Russell 2000very lagging behind.
but A final step towards riskier trading In the markets, this came as investors interpreted a series of economic data Pricing pressures appear to be cooling Combined with Slowdown in the labor market This means that the Federal Reserve is done raising interest rates.
This is what prompted investors to leave “Deal hunting,” Buy some of last year’s rednecks.
Josh Shafer He is a correspondent for Yahoo Finance.