“I see a stock grow and I buy it. And until it grows it I see it and I sell it,” said a user known as Chad. “I do it over and over again and it pays for our whole lives.”
Yes, Chad has discovered Momentum Trading. And it seems to work well for him. Like millions of people who started day trading during the epidemic, Chad was riding a thrilling bull market that relied on very cheap money from the Federal Reserve.
For newcomers, it was hard to make a mistake. Pick a stock, any stock, and watch it go up. Now, of course, Joyride is ending almost as fast as it started.
What’s happening: Inviting a “Game of Thrones” metaphor: Summer kids crowd the market, and winter is sure to come.
2022 was a tough pivot for traders who only know the thrill of the bull market. On the WallStreetBets page – the center of the 2021 meme stock mania – the mood is definitely less like a party. The “Diamond Hands” and “HODL” rally cries have been replaced by jockey memes about the abyss.
There are signs that the recession is shutting down the retail crowd. Robinhood, a free-trading app that has helped boost the amateur investors’ boom over the past two years, saw its monthly active users drop 10% to 15.9 million in the first quarter of this year.
Still, Wall Street learned the hard way during the gamestop run-up of what can happen when you dismiss the power of the Robinhood crowd. And for those who have downloaded the app for some thrill in the dark, now is a great time to stay around, watch and learn.
“I think retailers are here to stay,” Craig Erlam, a senior market analyst at Wonder, told me. “Never before has it been so easy to trade in the financial markets … Naturally some will close, but I think there will be a lot of people who will not. After all, these times in the market are very interesting.”
Sending to Davos
Julia Horowitz, lead author of Before the Bell, including a post from Davos, Switzerland, where she reports to the World Economic Forum.
Hello from the Swiss Alps! Rainy and warm here – not stable skiing weather.
Politicians and business leaders have gathered for the first private World Economic Forum since the Covid-19 epidemic began, selling their snow boots and gloves for sneakers and umbrellas.
At this year’s event, which was delayed due to the Omicron variant, there are less executives and heads of state from the top economies, and the infamous party scene is expected to be even more muted.
“As policymakers and business leaders move toward Davos, the world economy is likely to face its biggest test since World War II,” warned Georgieva, who will speak at multiple panels in the coming days.
The global growth slowdown is a big issue on Monday.
The combined economic output of the G7 countries fell 0.1% in the first quarter of the year compared to the previous three months, the OECD said in a new report.
Jason Farman, a former economic adviser to President Barack Obama, told me that the United States was “in the worst position in the world.” Consumers are worried about inflation, but they still have a large container of savings and spending is strong.
But he thinks the risk of a recession will increase in 2023, as the Federal Reserve raises interest rates in an effort to reduce inflation.
“I’ve been worried about the risk of recession for almost a year now and in the future,” he told the forum. “I think the Fed should try to make a soft landing. I don’t know if they will succeed.”
But most of the conference’s focus is on the war in Ukraine.
President Volodymyr Zelensky delivered the inaugural address of the forum via video in a packed room. He thanked those present for their support of Ukraine, but called for more sanctions on Russia’s oil exports, sanctions on all Russian banks and more funding for the military and reconstruction.
“I just wish you wouldn’t lose that sense of unity,” he said. “It is this punch that the management of the Russian Federation fears the most.”
A speaker: Russian officials and oligarchs, longtime in Davos, are significantly absent this year. Clear signs of Moscow’s new pariyah situation? The space that Russia used to promote itself in past forums has been rebranded as the Russian War Crimes House. Meanwhile Ukraine House has a complete list of events, including top Ukrainian officials, cultural leaders and actor Liv Schreiber.
Why vaccines are not preserving the companies that make them
Companies behind life-saving vaccines are facing a hangover on Wall Street this year.
Shares of Pfizer fell nearly 11%, while its vaccine partner BioNTech fell 36%. Moderna is down more than 45%.
The front still has some potential upside. U.S. health regulators last week approved a booster dose of Pfizer / BioNTech shots for 5- to 11-year-olds. And Pfizer could get an extra boost from Covid treatment thanks to its Paxlovid antiviral pill, which was approved late last year.
Pfizer may be the best of the three vaccine manufacturers to improve outside of Covid. The company recently announced plans to acquire Migraine drug maker Biohaven for about 12 12 billion.
Modern is another story. It’s a young company, founded just over a decade ago, and it’s not nearly as diverse as Pfizer. In other words, it needs to find another big blockbuster. About 97% of the company’s sales in the first quarter came from covid vaccines. It also comes back from a public-spirited negligence: the company’s chief financial officer was forced to resign just days after the revelation of financial irregularities being investigated against his former employer.
Like Moderna, BioNTech and now a bit of a one-strategy pony that almost all of its first-quarter revenue came from the covid vaccine. Pfizer made about half of its sales from the vaccine in the first quarter.