Source: Wall Street
Retail investors in US stocks made a comeback and went on a buying spree without fear of a sharp fall on Tuesday. Goldman Sachs Group warned of the risk of an emergency interest rate hike and a doubling of QT.
Us stocks rebounded after an epic slump, coinciding with a month-long recess of the Federal Reserve in August, and retail investors were eager to make a big push.
Since August, American retail investors have made a comeback. Bed Bath & Beyond (BBBY), Game Station (40.37,-3.08,-7.09%) (GME) and AMC Cinema (AMC), which became famous last year, have recently been hotly discussed by retail investors and bought in groups.
On Monday, BBBY rose more than 60% and AMC rose 20%, recreating last year's retail frenzy, as retail investors (mostly in their 20s) lurking on forums such as Reddit began to short Wall Street professionals and fight the Fed.
Although retail investors pulled back together yesterday, they did not seem to be able to resist retail enthusiasm.
On Tuesday, a basket of "Meme" stocks tracked by Goldman Sachs Group fell 6%, ending six consecutive gains, while BBBY fell more than 14%. BBBY fell 6%, sparking speculation that "retail investors are making a profit in this" short-selling "storm? "
But in fact, retail investors are buying more and more, and they are doubling their purchases of meme shares, including BBBY and AMC, according to online trading platform Fidelity.
BBBY became the second largest asset bought on the Fidelity platform, after Tesla, Inc. (850,21.27,2.44%), with buy orders outpacing sales at more than 2:1.
AMC is one of the five most bought stocks on the platform, with a buy-to-sell order ratio of 1.6 per cent. Other stocks sought after by retail investors include Helbiz, Inc (HLBZ (20.35,0.14,0.69%), Novax Pharmaceuticals (NVAX), Zhifu Finance (MEGL), and so on.
BBBY has become a hot spot on the retail forum Stocktwits, while meme stocks such as BBBY and GME have the most mentioned WallStreetBets on Reddit, the retail stronghold of US stocks.
In addition, retail investors snapped up $16.64 million of BBBY on Monday, the largest daily net purchase since early November, while retail investors bought $20.34 million of AMC shares on Monday, the largest daily net purchase since the end of March, according to Vanda Research.
In the face of this situation, the institutions that focus on the depressed economy and frantically pour cold water on US stocks are confused.
Mark Taylor, a sales trader at brokerage Mirabaud Securities, said:
Professionals are shorting when they are confused, confused and weak in terms of momentum. "the lack of a real understanding of the sudden resurrection of meme stocks may lead to some evil speculation that things have been manipulated, but this is a sour grape mentality. "
Ed Moya, senior market strategist at futures and foreign exchange broker Oanda, said:
The rebound in these emerging Meme stocks will continue only if the US stock market is generally higher. Many retail traders are examining their favorite gameplay and want to rejoin after Shangcheng alerted WallStreetBets of potential soaring trends. "
Goldman Sachs Group suggested that if you don't understand it, you might as well not do it. Don't chase the trend, don't go against the trend, don't bet in a hurry. The latest meme bubble will be quickly eliminated as QT tightens liquidity further in August and plans to double next month, or with an emergency rate hike by Powell ahead of the September meeting, that is, in August.