Reddit Stocks: What meme stocks are trending today? – July 18, 2023

US futures

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.1%
• Nasdaq 100 is down 0.3%

US futures are struggling today as markets digest economic data and a wave of results out from corporate America.

Today, we discovered that US retail sales rose 0.2% month-on-month in June compared to the 0.5% rise we saw in May, coming in below the 0.5% forecast by economists. They were 1.5% higher than last year compared to the 1.6% rise we saw the month before, but this was also below the 1.6% forecast.

That is the latest economic data to be released since markets showed increased confidence, with investors and traders hoping interest rates are approaching their peak since the latest inflation data came in softer than expected, with June’s CPI rising 3% to mark its slowest increase since March 2021 and core PPI also subsiding.

Meanwhile, US treasury secretary Janet Yellen said the slowdown seen in the labour market is helping slow inflation during an interview with Bloomberg News. ‘The intensity of hiring demand on the part of firms has subsided,’ Yellen said. ‘The labour market’s cooling without there any being any real distress associated with it’. She also said falling prices of houses and vehicles will also help inflationary pressures ease, although warned against markets getting over-excited by last month’s CPI data.

We have US industrial production figures out just before markets open, followed by business inventories and the NAHB housing market index shortly after the opening bell. There are also speeches from the Federal Reserve’s Michael Barr and Michael Gibson today.

Most discussed Reddit stocks

Below is a list of the top 10 most mentioned US stocks on the WallStreetBets thread on Reddit over the last 24 hours, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Tesla
2. NVIDIA
3. Rivian
4. PayPal
5. Disney
6. C3.ai
7. Apple
8. Robinhood
9. Visa
10. AMD

Most active US stocks before the bell

Below are the most active stocks with a valuation of at least $500 million before the bell, based on trading data taken from Bloomberg:

1. Nikola
2. Palantir
3. Bank of America
4. Tesla
5. Carnival
6. AT&T
7. Lilium
8. Morgan Stanley
9. Verizon
10. Ford

US premarket winners and losers

Here are the stocks worth at least $500 million experiencing the sharpest movements in premarket trade, according to data from Bloomberg:

Top US stocks to watch

Bank of America is down 1.1%. The bank followed its peers by beating expectations in the second quarter as it reaps rewards from higher interest rates and thanks to a more resilient performance from its trading arm. EPS of $0.88 came in ahead of the $0.85 forecast. Net interest income was up 14% from last year due to higher rates, while its trading arm also performed better than expected. It agreed with its rivals that the US economy remains ‘healthy’, although warned that it is growing at a slower pace. Still, provisions almost doubled from last year to $1.1 billion as the outlook for areas like commercial real estate remain challenging while recession risks linger.

Charles Schwab is up 0.4%. The bank said adjusted EPS fell 23% in the second quarter to $0.75, although this was ahead of the $0.71 forecast. Net revenue declined 9% as a rise in interest-rate-linked income and higher asset management fees was countered by lower trading revenue and a slump in the fees it earns on bank deposits, which declined 7% from the last quarter and came in 31% below what we saw a year ago! ‘While anticipated client cash realignment, along with net equity buying during June, pushed cash levels lower, we observed a continued and substantial deceleration in the daily pace of cash outflows versus prior months. The continuation of this trend through the end of the quarter further strengthens our conviction that this realignment activity will inflect before the end of 2023, unlocking growth in client cash held on the balance sheet,’ said chief financial officer Peter Crawford.

Bank of NY Mellon is down 0.7%. Adjusted EPS of $1.38 in the second quarter came in comfortably ahead of the $1.22 forecast as it saw net interest income jump by one-third. The bank has struggled to recover since being rocked by the banking crisis earlier this year. Deposits edged up 1% in the three months to the end of June, although remained over 10% lower than the year before.

Morgan Stanley is up 0.2%. Earnings dropped more than expected in the second quarter as higher than anticipated expenses countered a beat at the topline. The bank grew net revenue more than forecast thanks to beats from its wealth management arm and because a stronger than anticipated performance in equities trading countered a soft reading from fixed-income – although trading overall continued to suffer heavy declines. EPS of $1.24 fell from $1.39 the year before as costs rose more than expected, partly because of severance costs following a series of layoffs. That 11% drop was far worse than the 1.2% drop pencilled-in by Wall Street. Investment banking continues to suffer from a lack of M&A deals, listings and fundraisings, but institutional investment banking squeezed out surprise growth and underwriting fees were also higher than expected, which may fuel hopes these parts of the business could bounce back after JPMorgan said last week that it saw some ‘green shoots’ before warning it was too early to call.

That sets the tone ahead of earnings out tomorrow from peer Goldman Sachs, which is down 0.2% this morning. Analysts agree that this will be another tough quarter for the bank, which is continuing to underperform, but disagree on just how tough it will be. The EPS range varies from as low as $2 to as high as $6.91, according to a Bloomberg-compiled consensus of 21 analysts. That represents the widest range of estimates of any major US bank this earnings season and shows analysts think earnings could fall anywhere between 10% to 74% from the year before. The miss from Morgan Stanley, which has proven more resilient, will only fuel fears that risks are geared to the downside ahead of tomorrow. That means some are in for a surprise this week whatever the outcome and sets the stock up for potential volatility. Find out why analysts are divided over what to expect in our Goldman Sachs Q2 Earnings Preview.

Lockheed Martin is up 0.9% and at a three-month high after raising its outlook thanks to strong demand for military equipment amid rising geopolitical tensions. The defence giant said it is now expecting annual EPS of $27.00 to $27.20 compared to its previous target range of $26.60 to $26.90. It also upped its sales forecast. That came as its adjusted EPS of $6.73 in the second quarter beat the $6.32 forecast.

Novartis is up 2.7% and at a one-month high after beating expectations in the latest quarter, raising its full year outlook, announcing a new $15 billion share buyback programme and unveiling its plans to spin-off its generics medicines business named Sandoz later this year. Adjusted operating profit rose 9% in the second quarter to $4.7 billion to come in ahead of the $4.3 billion forecast. It said it is now anticipating core operating profit to rise by a low double-digit percentage in 2023, having previously forecast high single-digit growth. The $15 billion buyback had been previously flagged and follows on from the last one completed in June. It should be completed by the end of 2025. Sandoz is set to be spun-off into a listing in Switzerland, but American Depositary Receipts will follow. The business generated almost $17 billion in earnings last year.

AT&T is up 1.3% today and rebounding from its lowest level in three decades! Markets have become spooked that its historical work that laid toxic lead cables across the US could expose it to trouble after the Wall Street Journal reported earlier this month that the industry was abandoning underground networks that could be impacting the environment. Rival Verizon is up 1.8% after hitting levels last seen back in 2010 yesterday.

Tesla is down 0.2% at $289.87 after hitting 10-month highs yesterday, finding support after announcing the first Cybertruck has rolled off the production to keep hopes alive that it will be launched later in 2023 following years of delays and reports that it plans to double capacity of its plant in Germany so it can produce up to one millions cars each year. The flurry of news has provided support ahead of Tesla’s quarterly results out tomorrow. Tesla delivered a record number of vehicles in the second quarter as price cuts and other incentives keep demand growing, but the number one question this week is what impact this has had on its profitability. Margins are expected to bottom-out in the second quarter. The outlook is rosy for now, with markets anticipating further growth in deliveries and a recovery in margins in the second half, but Tesla will need to keep up with these expectations if it wants to keep on the right trajectory. You can find out everything you need to know in our Tesla Q2 Earnings Preview. Baird raised its target price on Tesla this morning to $300 from $252.

Ford is down 1.5% before the bell and at a one-month low. The carmaker appeared ready to try and steal some of the hype around the Cybertruck after announcing on the same day that it is cutting the price of its own electric pickup truck, the F-150, by up to 17% as it prepares for more intense competition. That means the cheapest F-150 Lightning Pro has fallen below $50,000. More electric pickup trucks are due to enter the market from the likes of General Motors and Stellantis in the coming years. ‘The EV market is rapidly changing and we need to adapt to remain competitive,’ said a Ford spokesperson.

With that in mind, Rivian is down 1% as new competition and price cuts for electric trucks could threaten demand for its own R1T pickup. That puts it on course to fall for a fourth consecutive session since peaking at 2023-highs last week.

Netflix is up 0.5% at $452.50 and on the cusp of testing the recent 17-month highs after Jefferies raised its target price to $520 from $440 this morning. That is ahead of results out tomorrow. Subscriber growth is back on the right path and investors will want to know how its new dual-strategy to revive growth through a crackdown on password sharing and its new ad-supported tier is faring. The fact Netflix has two substantial new catalysts to help keep subscriber numbers climbing to new record highs suggests there is an opportunity for a beat this quarter. On the other hand, a miss would suggest the new plan isn’t taking-off as quick as markets have been banking on this year. Earnings are forecast to decline for a fourth consecutive period in the second quarter but markets believe it will start to reap rewards in the second half and that EPS will begin to grow again, partly helped by easier comparatives from what we saw in the back-end of 2022 – enough so that it is forecast to report record annual earnings in 2023 despite the pressure seen on the bottom-line in the first half. All of that has the potential to keep providing Netflix shares with momentum, but only if it can keep up with market expectations. Markets have bought into Netflix’s new strategy and now it is time to start delivering. You can find out everything you need to know in our Netflix Q2 Earnings Preview.

Disney shares are trading marginally higher after sinking to 2023-lows yesterday, marking the steepest one-day drop in over two months. Notably, trading volumes soared to almost 35 million shares yesterday compared to less than 18 million the day before and above the 20-day average of less than 13 million. Sentiment has soured in recent months as investors fret over issues including but not limited to streaming losses, challenging conditions for its TV business, the impact of strike action taken by Hollywood actors and writers, and recession risks facing its theme parks and resorts. News that CEO Bob Iger is staying until at least the end of 2026 has failed to install confidence.

NVIDIA is up 0.8% at $468.15 and just below the all-time high we saw when trading opened yesterday. We need to see it close above $465.80 to set a new high, with the record intraday high currently sat at $480.90. Melius Research became the latest broker to signal there is more upside potential despite the stellar AI-induced rally we have seen in 2023, initiating coverage with a Buy rating and a price target of $625 – among the highest on Wall Street!

Fellow chipmaker AMD is down 0.7% at $117.50 after closing at a one-month high yesterday, when it managed to shrug-off a ’90-day downside catalyst watch’ initiated by Citi after warning there are downsides to estimates, sticking with its Neutral rating and $120 target price. Melius Research also initiated coverage on the semiconductor maker today but gave it a Hold rating and a price target of $132.

Apple shares are down 0.2% at $193.56 after closing at fresh all-time highs yesterday, sending its valuation back above the $3 trillion threshold after Morgan Stanley hiked its price target to $220 from $190 after becoming excited about the growth potential in India. More brokers have agreed there is still further room for the rally to continue after Jefferies raised its target price on the iPhone maker to $225 from $210 this morning while Melius Research gave it a more bullish $240 target.

Microsoft is up 0.1% while Activision Blizzard is down 0.1% at $93.10, close to Microsoft’s $95 per share offer. Today is the deadline for the pair to complete their $69 billion combination but this is highly unlikely to happen considering there are regulatory barriers still to overcome. Neither company is expected to walk away, especially as market confidence the deal will be approved has never been higher in the last two years! The Federal Trade Commission failed to block the deal after a US judge said it didn’t demonstrate the deal would harm competition, a decision the regulator is appealing. UK regulators have also warmed to the deal in recent weeks and is currently considering remedies provided by the pair. An extension is expected.

Payments companies remain buoyant. Visa is down 0.4% after hitting two-year highs yesterday, while rival Mastercard is also trading marginally lower and lingering below the all-time highs hit last week. Meanwhile, PayPal is trading just below two month lows this morning.

Cruise line operator Carnival, one of the best performers in the S&P 500 this year, is up 0.6% at $17.82 after Truist Securities raised its price target to $16 from $11 this morning, while Barclays was more bullish with a hike to $22 from $19. Argues Research landed in the middle after bumping-up its view to $21 as it upgraded the stock to Buy from Hold. The stock has lost ground since peaking at 15-month highs earlier this month.

Palantir is up 2.9% and at its highest level since early 2022 after announcing a new partnership with SpecterOps to provide the company’s BloodHound Enterprise product through its FedStart offering. This will provide a defensive tool to secure Microsoft active directory that meets the requirements to complete work for government agencies. ‘SpecterOps BloodHound Enterprise is one of those companies at the cutting-edge of attack path management whose solutions should be in the hands of the government without delay. We look forward to helping them achieve accreditation and deploying their leading edge in defense of critical government systems,’ said president of Palantir USG, Akash Jain.

Robinhood is up 0.2% and at a 15-month high. Markets are digesting news it is hiring roles in the UK. The trading platform has posted job listings for regulatory roles and an operations lead with a footing in securities, according to reports from The Telegraph. That comes ahead of Robinhood’s anticipated entry into the UK later this year, when it is due to introduce its brokerage services.

Cryptocurrency stocks Marathon Digital and Riot Platforms are down 1.5% to 2%. They are following bitcoin lower, with the crypto losing ground for a fifth consecutive day and slipping back below the $30,000 threshold. Coinbase is down 0.9% after Bloomberg reported CEO Brian Armstrong is due to meet with House Democrats behind closed doors tomorrow morning to discuss legislation for digital assets and other issues ranging from privacy issues to national security. That comes in the wake of fresh pressure from the Securities & Exchange Commission.

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