Reddit Stocks: What meme stocks are trending today? – August 14, 2023

US futures

• Dow Jones Industrial Average is up 0.2%
• S&P 500 is up 0.2%
• Nasdaq 100 is up 0.3%

US futures are pushing higher at the start of the new week, with the S&P 500 and Nasdaq 100 both attempting to rebound from one-month lows. They are following European markets higher, which appear to have shrugged-off contagion fears stemming from China, which dragged down Asian markets overnight.

What to expect from the Week Ahead

It may be the middle of the US summer, but economic data keeps coming thick and fast. The key event for US markets is the release of FOMC minutes, as well as more data out of China following the lacklustre performance we saw in the first half of the year. There is also more inflation data out of the UK and Canada, and RBA minutes and employment data out of Australia.

You can find out what to expect from all these major events in the Week Ahead.

Earnings Week Ahead: Retailers and Chinese stocks

We are approaching the back-end of earnings season but the calendar remains busy this week. We have results due out from a number of retailers including Home Depot, Target and Walmart (more on this below). Other big names in the US calendar this week include semiconductor firm Applied Materials, tech giant Cisco, machinery maker Deere & Co, luxury goods firm Tapestry and cybersecurity outfit Palo Alto Networks.

It will also big a big week for Chinese stocks that are listed in America, with tech conglomerate Tencent, video platform Bilibili, ecommerce firm JD.com and electric carmaker XPeng all due to provide updates. South-east Asian outfit Sea is also pencilled-in.

You can find the full calendar and our previews on the top updates to watch out for in Earnings This Week.

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. NVIDIA
2. C3.ai
3. US Steel
4. Tesla
5. American Strategic Investment Co
6. Eversource Energy
7. Foot Locker
8. PayPal
9. Alibaba
10. Cleveland-Cliffs

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. AMC Entertainment
2. Nikola
3. US Steel
4. Tesla
5. Cleveland-Cliffs
6. IonQ
7. Apple
8. Lucid Group
9. Palantir
10. NVIDIA

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

Let’s have a look at the top stocks to watch today.

US retail earnings: Home Depot, Target & Walmart

US retailers take centre stage this week and markets will be on the lookout for how the American consumer is faring. 

We have retail sales data out on Tuesday, when economists believe Amazon Prime Day will provide a boost and deliver the fourth straight month of growth. However, economists remain cautious about the outlook for the second half as savings deplete and recession risks rise.

We also have results out from a number of major retailers. Home Depot’s outlook for the rest of 2023 is bleak but priced-in, with the DIY retailer on course to report its first annual drop in sales and earnings since 2010! Meanwhile, Target’s depressed valuation could get a boost as markets hope earnings will grow for the first time in almost 18 months, while heavyweight Walmart may find it harder to impress given its valuation carries a big premium and shares sit at all-time highs.

You can find out what to expect from US retail sales and earnings out from Home Depot, Target and Walmart, as well as how it could impact the S&P 500, in our US Retail Preview.

US Steel stock: Rebuffs Cleveland-Cliffs offer, for now

US Steel is up 26.8% at $29, marking a five-month high, after confirming over the weekend that it received and rejected an unsolicited takeover bid from Cleveland-Cliffs, which is down 0.6%. A combination would create one of the top 10 steel producers in the world, and one of the top four outside of China.

Cleveland-Cliffs said it offered a deal worth $17.50 in cash and 1.023 shares in the company for each US Steel share, giving a total value of around $35. That was rejected. Cleveland-Cliffs said it was turned down because US Steel said the offer was ‘unreasonable’. The company said it has also secured the support of the United Steelworker’s union, which has the ability to counter the proposal.

“After two weeks without any substantive engagement from US Steel with respect to the economic terms contained in our compelling proposal, US Steel’s board of directors rejected our proposal, calling it ‘unreasonable.’ As such, I believe it necessary to now make our proposal public to help expedite substantive engagement between our two companies,” said Cleveland-Cliffs chairman, president and CEO Lourenco Goncalves.

Interestingly, US Steel said it had to reject the offer as it was “unable to properly evaluate the proposal because Cleveland-Cliffs refused to engage in the necessary and customary process to assess valuation and certainty unless US Steel agreed to the economic terms of the proposal in advance.” However, it said it has now invited Cleveland-Cliffs to take part in its strategic review to suggest it is open to a deal, while also advertising itself to any other potential bidders that may be circling in the hope of starting a bidding war.

Chesapeake Energy stock: Exits south Texas basin

Chesapeake Energy has struck a deal to sell its last assets in the south Texas basin to SilverBow Resources for $700 million. The Eagle Ford assets have been picked apart and sold-off in several deals this year and it has sold all of its interest in the basin for around $3.5 billion in total. It will receive $650 million in cash upfront, with the other $50 million due as deferred payments over the next 12 months. It could also be paid another $50 million in the future depending on how commodity prices play out.

AMC stock: APE conversion plan gets green light

AMC shares are down 28% at $3.42 – the lowest level since February 2022 - while its APE preferred stock is up 25.8% at $2.24. That is in response to news that AMC has secured court approval for its plan to convert APE shares into ordinary AMC stock, causing the price difference between the two to narrow.

AMC has said being able to sell APE shares and convert them is vital to its ability to keep raising cash as it continues to recover from the pandemic, although it has faced some objection from shareholders that are set to face significant dilution as a result. AMC is paying those shareholders that sued the company around $129 million in stock to settle potential legal claims related to the plan. The plan to payoff disgruntled shareholders was previously rejected by the court because it would prevent other shareholders that were not represented from launching a lawsuit.

Reuters said the conversion will mean APE shareholders will own around 37.15% of the company, leaving existing AMC shareholders with the other 62.85%.

Apple stock: Supplier outlook confirms bleak outlook

Apple shares are up 0.1% today and looking to rebound from two-month lows after major suppliers downgraded their guidance for the remainder of the year, fuelling fears that the iPhone maker is not immune to the crunch in demand for electronic devices.

Hon Hai Precision, better known as Foxconn and one of Apple’s biggest suppliers, said it is now expecting sales to experience a decline in 2023, having previously forecast flat revenue. That follows on from TSMC last month, when it predicted sales will be down 10% this year rather than the mild single-digit decline it previously expected.

NVIDIA stock: MS says buy before earnings

NVIDIA shares are trading broadly flat today at $408.65, having ended Friday at a six-week low, after Morgan Stanley said the recent pullback in its share price provides a good entry point ahead of its quarterly results that are due out on Wednesday August 28. The stock, which has more than trebled in value in 2023 thanks to an AI-induced rally, has fallen 14% since peaking at all-time highs in July, but Morgan Stanley analyst Joseph Moore said the company remains his Top Pick ahead of the results.

“The selloff the last few days – a combination of macro concerns and a resumption of supply anxieties – materially de-risks the print from the more elevated expectations,” Moore said. He has a price target of $500 on NVIDIA.

NVIDIA is forecast to report quarterly revenue of $11 billion, which would mark a new quarterly record as the new demand from AI takes off. That would be up 65% from the year before and mark a significant jump from the $7.2 billion in sales we saw in the previous quarter. Adjusted earnings are forecast to quadruple from the year before!

Tesla stock: Price war in China intensifies

Tesla shares are down 2.3% and at their lowest level in over two months after it cut prices for the long-range and performance versions of the Model Y by around RMB14,000, equal to about $1,934. Those new prices will come into effect on August 14. It also said it is extending insurance subsidies for certain versions of the Model 3 worth up to RMB8,000 to the end of September.

That is fuelling thoughts that the price war in China is intensifying, with other brands including Geely and Leapmotor having also slashed prices this month. We discovered that sales of electric vehicles in China were down 31% in July compared to June – marking the first sequential drop of 2023 - suggesting companies may have to keep slashing prices to counter faltering demand.

Nikola stock: Recalls over 200 vehicles

Nikola shares are down 14.9% and at a one-month low after recalling 209 electric vehicles and halting sales of battery-electric vehicles. A truck caught fire at its factory earlier this year and this prompted an investigation to find out the cause. It said it is recalling the vehicles and halting sales of battery electric vehicles as a precautionary measure. It said a coolant leak was the likely cause of the fire it investigated and that it is now working to remedy the situation so sales can resume. It said sales of hydrogen fuel cell electric trucks remain unaffected and that first deliveries are on track to start in the third quarter.

Foot Locker stock: Says no to Yeezy

Foot Locker is one of the most-discussed stocks and is down 0.2% today. There has been no news out from the business, but it was reported last week that the company refused to stock Yeezy shoes from Adidas following the fallout between the German company and rapper Kanye West, now known as Ye.

Adidas terminated its Yeezy venture with the rapper after he made anti-Semitic comments, but the company was left with over $1 billion in stock and decided to sell them in waves and funnel a portion of the income to charities rather than destroy them. Complex reported Foot Locker decided against stocking them over fears it would be hit by a backlash, although Adidas has seen strong demand for the sneakers so far.

American Strategic stock: Digesting earnings and board shuffle

American Strategic Investment Co is in play as traders discuss its quarterly results that were released late last week, when it also announced a shake-up to its management. The company, which owns commercial real estate across New York City, said revenue declined from last year as new leases kicked-in, but said losses narrowed and that it generated cash. Occupancy levels sit at 85%.

The company had just $7.1 million in cash and some $392.4 million of net debt. It said all of its debt is now fixed-rate and that the first lot matures at the end of 2023, with ‘limited maturities through 2025’. CEO Edward Weil and CFO Christopher Materson have both resigned, according to Reuters, and replaced by Michael Anderson and Joseph Marnikovic, respectively.

Manchester United stock: Do we finally have a deal?

Manchester United shares are up 9.2% today on reports that the club is on the verge of being sold for $7.2 billion to Sheikh Jassim bin Hamad Al Thani, according to the Daily Mirror. The Qatari sheikh has been battling it out against British billionaire Jim Ratcliffe and is thought to have clinched the deal, albeit at a much higher price tag than the £5 billion to £6 billion earlier in the process.

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