① Reddit and the “Trump Concept Stock” DJT had a strong start this week, which seemed to herald the return of the meme stock era; ② Wall Street pointed out that currently, with the exception of the bond market, other sectors are in a bull market; ③ Many institutions believe that the bullish cycle of US stocks has arrived, and the Bank of America even predicted that the bullish trend may continue until 2033!
Financial Services, March 27 (Editor Malan) Meme Stocks (meme stocks) welcomed two generals this week. Trump's DJT “demon” reached a new level, and another “US stock forum” Reddit also surged 30% after listing. Both stocks have been flagged as meme stocks by Wall Street because retail investors are making big moves.
However, so-called meme stocks refer to stocks that violate mainstream rules in the financial world, break away from stock fundamentals, and have risen sharply due to sentiment. The majority of the main players in the rush to buy these stocks are retail investors.
On Tuesday,$Reddit (RDDT.US)$Up nearly 9%;$Trump Media & Technology (DJT.US)$It rose by more than 16%, and even rose by more than 50% at the opening of the market, vividly recreating the “100 million points” shock that GameStop (GameStop) stocks once brought to Wall Street during the pandemic.
Meanwhile, the former meme stock veteran$GameStop (GME.US)$The stock price also rose 18% this week, which made many analysts lament that the (US stock) market is in a very prosperous phase.
Steve Sosnick, chief strategist at Yingtou Securities, said that the market is now in a state where it is extremely vulnerable to momentum. One of the signs is that it is no longer related to fundamentals, but is completely related to price changes. Meme stocks are the epitome of this mentality.
However, meme stocks are not the whole story. Wall Street jokes that everything is now in a bull market, Bitcoin is once again approaching 71,000 US dollars, and the commodity market is also seeing a trend of rising prices.
Liz Ann Saunders, chief investment strategist at Carson Wealth Management, pointed out that recently all themes are bull markets, with the exception of bonds. Whether it's cryptocurrencies, precious metals, commodities, or meme stocks, they're all mixed up as part of a bull market.
Long cow or on the edge of a cliff
After the Bitcoin price rebounded, those that held a large number of cryptocurrencies$MicroStrategy (MSTR.US)$The stock price has rebounded sharply this week, and since this year, the stock price has risen by nearly 200%. Gold, on the other hand, has already risen 7% last month and is currently hitting an all-time high. Commodity cocoa prices have more than doubled this year.
According to Schwab Wealth Management's Sonders, these increases are signs of a larger bubble in the market.
At the same time, the US stock market is at an all-time high. The S&P 500 index has reached more than 20 record highs this year, and continues to show a straight upward trend. This makes many people fearful whether the stock market bubble has burst.
However, Deutsche Bank, which is regarded as the most pessimistic institution on Wall Street, claims that capital inflows into US stocks indicate that risk appetite has not reached its peak, and that the trend of US stocks is supported by improved economic and profit prospects.
Parag Thatte, the company's director of global asset allocation and US equity strategy, explained that if capital flows or positions reach extreme levels, people may be nervous about holding long positions. However, since it has not reached that extreme, the market still needs some negative catalysts if it wants to experience a decline.
This seems to indicate that US stocks still have the momentum to continue to rise. Bank of America previously predicted in a report that the S&P 500 index will rise another 34% by the end of 2026. More optimistic, the agency predicts that the current boom in US stocks may continue until 2029-2033.
Editor/Somer