Reddit Stocks: What meme stocks are trending today? – July 5, 2023

US futures fall

• Dow Jones Industrial Average is down 0.5%
• S&P 500 is down 0.5%
• Nasdaq 100 is down 0.5%

Markets are awash with red as traders and investors return from the July 4 holiday, with US futures following European and Asian shares lower.

The central cause of the negative movements today is coming out of China amid concerns about its economic recovery after the Caixin services PMI hit a five month low and because rising tensions with the US are rattling confidence, with both sides trying to cut each other off from their technology and natural resources (more on this below).

The fact the composite PMI in the euro area was revised lower this morning is also not helping as it reinforces fears about the state of the global economy and feeds into the anticipation of a recession.

We are waiting today for the minutes to be released from the last FOMC meeting, when the central bank left interest rates unchanged but signalled multiple hikes were to come before the year is out. Markets are convinced there will be another 25bps increase when the Fed meets later this month but believe that will be the last one of 2023. While the Fed is still struggling to get its hawkish message across, it has now firmly pushed any hopes of a pivot into 2024. The key thing to watch today is the opinion of individual members to gauge how strongly the overall Fed believes more hikes are needed and if the hawkish tone is here to stay.

There is also the OPEC meeting today, which will keep oil prices on the radar (more on this below).

Elsewhere in the economic calendar, the president of the New York Fed John Williams is speaking today. We also have economic optimism, factory orders data and the API crude oil stock change due out. Attention on Thursday and Friday will be on US jobs data.

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 on July 5, 2023, according to data from Quiver Quantitative. Exchange-Traded Funds (ETFs) and other instruments have been excluded:

1. Tesla
2. Rivian
3. Apple
4. C3.ai
5. NVIDIA
6. Visa
7. Advanced Micro Devices
8. Eversource Energy
9. Target
10. Microsoft

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. Rivian
2. Nikola
3. Tesla
4. Lucid Group
5. Marathon Digital Holdings
6. Lilium
7. Palantir
8. Carnival
9. Riot Platforms
10. Plug Power

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

Sentiment in the tech industry is taking a battering from China’s decision to implement export curbs on key metals used in products like semiconductors, electric vehicles and other high-tech equipment. That is being seen as a retaliation to the White House’s decision to ban American firms from exporting high-tech equipment, like advanced chips needed for artificial intelligence, to China in an effort to starve it of key technology. The ban is concentrated on gallium and germanium but the move has sparked fears China could widen the crackdown to other key metals, like lithium or rare earth metals.

The news is fuelling fears for US semiconductor makers with NVIDIA down 0.8%. Others are also taking a hit with Intel is down 0.7%, Qualcomm is trailing 0.8% and memory chipmaker Micron is down 0.9%. AMD is defying the downturn and is up 0.2%. US chipmakers have already been told to stop exporting advanced chips to China, threatening a key chunk of sales. NVIDIA has been one of those to tinker with their chips to get past the restrictions but the US government is reported to be considering introducing tighter rules to close down these loop holes. The sector is not only finding it more difficult to sell their products thanks to restrictions at home, but could now find it more difficult to source the key metals they need to make them thanks to the new rules introduced by Beijing.

Meanwhile, Amazon is down 0.5% while Microsoft is falling 0.7% after the Wall Street Journal reported the US government is considering implementing restrictions that would prevent or restrict US cloud computing companies supplying services to Chinese companies. The report is not, however, providing support to Chinese cloud computing firm Alibaba, which is down 0.3%.

Tesla is down 0.7% as it too is hit by growing concerns that supplies of key metals could be impacted by the escalation of tensions between the US and China. The electric vehicle maker is falling from a nine-month high, which was hit after Tesla posted record deliveries in the second quarter to show its price cutting strategy is working and that demand remains high. The Nikkei reported today that Tesla has cut prices of the Model 3 and Model Y in Japan by 3% to 4%.

Smaller electric vehicle maker Rivian is faring much better today and is up 8.2%, hitting its highest level in almost 17 months and building on the gains booked on Monday when it revealed it delivered more vehicles than anticipated in the latest quarter. The support today is coming from news it has started delivering electric vans that it is making for Amazon to Europe, representing its first shipments outside of the US. This should see over 300 vans deployed in Germany in the coming weeks. Amazon is the largest shareholder in Rivian and one of its biggest customers after ordering 100,000 electric vans back in 2019 that Rivian will deliver before the end of this decade.

Fellow EV maker Nikola shares are active today, with the stock down 4.4%. The company said late Monday that its battery supplying subsidiary Romeo Power has transferred all its assets to a firm that will sell or liquidate them to raise funds to pay creditors.

Another EV maker, Lucid Group, is also among the most traded stocks before the markets open and is up 0.1%, sitting at a six-week high.

Apple is down 0.5% as it succumbs to the broader pressure on the tech industry. We discovered today that Hon Hai Precision, better known as Foxconn and one of Apple’s major suppliers, reported more than a 14% fall in sales in the second quarter but said the outlook is improving as customers prepare to roll out new products later this year. It said the third quarter will be ‘better than the second’.

Netflix is up 0.7% at $444.70 this morning and on the cusp of testing recent 17-month highs after being upgraded to Neutral by Goldman Sachs, which hiked its price target to $400 from $230. The broker said it expects the streaming giant to add more subscribers than the 1.7 million forecast by Wall Street when it releases second quarter results on July 19.

Exxon Mobil, Chevron and Occidental Petroleum are all up as much as 0.2% today as OPEC meets today. Oil prices have been climbing after Saudi Arabia and Russia agreed to extend production cuts. Saudi Arabia’s energy minister, prince Abdulaiz bin Salman, has previously said he will do ‘whatever it takes’ to stabilise the market following the slump we have seen this year, largely down to concerns about global growth and the threat of a recession.

Cryptocurrency stocks are following bitcoin lower today, with Marathon Digital down 2.9% and Riot Platforms down 3.2%. Both stocks are among the most traded in premarket hours today after bitcoin slipped over 1% to around $30,400, marking its lowest level since the start of July. Coinbase is falling 2.6% today.

Moderna is up 1.3% after announcing it has signed a memorandum of understanding that could lead to it developing mRNA medicines in China. It said any drugs developed under the deal will be exclusively for Chinese citizens and will not be exported, according to an email sent to Reuters. That follows on from local news reports earlier this week that Moderna was about to make its first investment in China worth around $1 billion.

UPS is down 1.4% after the Teamsters Union that represents over 300,000 workers said the delivery giant ‘walked away’ from negotiations, a claim which the firm has denied. That is worrying investors as workers have already agreed to strike if talks breakdown. Both sides are trying to find an agreement before the existing one runs out at the end of this month.

American Equity is up 2.9% at $53.25 after agreeing to a $4.3 billion takeover by Brookfield’s reinsurance arm worth $55 per share. Media reports about a potential deal broke last week. The offer is for $38.85 in cash with the rest paid in stock.

Plug Power is up 1.5% at $10.45 and one of the most traded US stocks before the opening bell after the company was given a Buy rating as Citigroup initiated coverage on the fuel cell company with a price target of $13. It said Plug Power has positioned itself at the centre of the hydrogen economy with a path to profitability.

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