Roaring Kitty lawsuit, GDP forecasts down: Monday’s market trends

Yahoo Financial Reporter Josh Schafer joins Asking for a Trend to discuss his highlights from the trading day.

The Nasdaq Composite (^IXIC) hit a record high in Monday’s session despite a move higher in the 10-year Treasury yield.

Meanwhile, GDP forecasts continue to fall. The Atlanta Fed’s GDPNow forecast is below 2% for the first time this quarter, signaling slowing growth as the Federal Reserve eyes a soft tapering.

Finally, meme shares aren’t going away. In an SEC filing, Roaring Kitty revealed that it has a 6.6% stake in pet care retailer Chewy ( CHWY ). Gill also faces a class action lawsuit over his social media posts that fueled the volatility of GameStop ( GME ).

For more expert insight and the latest market action, click here to watch this full episode of Searching for a Trend.

This post was written by Melanie Riehl

Video Transcript

US stocks are closing higher to start the second half of the year.

Investors are starting to count down to the key jobs we report in the new financials.

Josh Shafer joins us now with more of the day’s trading goodness, Josh, yes, Josh, Josh, the NASDAQ composite hits a record high today despite a move higher in the 10-year Treasury yield, this will be my first take today i want to take a closer look here.

So I want to pull up that 10-year chart, and we have a pretty significant move in the 10-year Treasury.

So you see they’re up about 14 basis points, typically over the last what we’ll call a year or so.

Now if we sell at least it’s been that long, if not longer, since yields have gone up so much in one day.

Normally you’ve seen stocks go down.

I’ll take a look at a three month chart here for us and we can look at April if you remember April we had that big hit above.

That was when we had a 5% draw on S and P, right?

So it’s interesting to me to see that higher growth in today’s 10-year, but not to see it in stocks.

So if we take a look at, kind of what the market looked like today, I think that’s kind of intuitive as to what this move actually means for investors, right?

As yields go higher, you see that kind of movement toward quality is what strategists often call for, right?

Check out our two main sectors there.

Technical consumer discretion, right?

And so uh sorry, yeah, technology is mostly what I’m pointing out there.

And what’s interesting within that is you look at what happened today.

You had Microsoft closing at an all-time high, Amazon at 2% Apple at an all-time high.

So as we get closer to the 4.5% mandate, the strategists basically circle a few large companies and say the good winners are going to be the ones that can do well in that environment, but anything other than that and you start to struggle a little bit.

The story continues

And then, I think the broadness of the delivery as the mandate goes up, we might not get that expansion that people want to see it.

And you mentioned 4.5, it’s that kind of level, you know, I’d say it’s that kind of level of people that are watching.

So when you take a look at 10 years, we’re close to 4.5 now, 4.5 is kind of when people really start to step up in quality.

This is for Piper Sam where Michael Kantrowitz is, he points out 4.5 as kind of a key level.

And then if you get below 4 to 4.5, maybe companies that are just good earners can do well, if you get below four, then you get a kind of small cap growth.

So really, I think that’s going to be important to watch because we had this big move up and you have that jobs report on Friday and we know that usually moves, it gives a good amount .

So that would be to take number two, take away, number two GDP forecasts continue to fall.

And that wasn’t the story to start the year, was it?

And it wasn’t the story of 2023.

We talked a lot about GDP forecasts continuing to go higher.

The economy is doing better than expected, better than expected.

But let’s take a look at the GDP of the Atlanta Fed.

Now for Caster, this is for the second quarter and this went through the whole quarter, look where we are down here.

We are now below 2% for the first time for FA GDP in N.

Now for the quarter, this gets real-time data.

And then when you just look at the consensus compiled by Bloomberg, that’s your U BS.

We are at 2.3%.

You can see here what I was talking about.

We have come to the end.

Right.

That was the expectation.

Now we’re starting to come down a little bit and I think that’s just an interesting picture of how people are feeling about economic growth right now.

We went from, are we growing up too fast?

OK, maybe it will be a little less than expected.

And so, therefore, the cooling of the economy, the taming of inflation.

What, what does that mean, some implications for the Fed, what do you think?

I mean, that’s so low, right?

It starts to make more sense.

I think it’s soft ground.

And I think it’s important to remember that 2.3% is still good.

This is still on trend with where you would like to be.

So it’s not necessarily bad to see these start to come down.

Remember when we were going out like this and didn’t know where we were going to stop.

We were talking about not going down, the economy is too hot.

This is an inflation concern.

The Fed won’t cut it all.

So I think that’s part of the reason that you’re starting to see two price cuts in the market and maybe that’s where we get here in kind of what it’s needed for.

Now, the concern would be, it continues to fall, but we don’t know if it’s coming down very far yet.

So we’re going to take away the fun of the day, the fun of the day, right?

So Keith Gill uh loud kitty had a glimpse today that he now owns over 6.6% of Chuy which is a pet provider pet care provider.

This is not gamestop.

So a little different look than there.

And Josh really my highlight from this in his second file, you can fill out a box and put whatever you want up to a point, he decided to put a box here that says check the right box to determine if you are a cat

Keith Gill confirmed that it is, are you not allowed to do that?

I think, I think I asked, I asked Jared Blier or our Mark, what did Jared say?

Jared said there is a box inside the second folder that you can basically put in like a text box and put whatever you want.

And it seems like Mr.

Mr. Gill went for it, he went, he went for it there.

I thought it was interesting overall.

In today’s chewed story, you just see the stock drop all day after that and you watch this file closely.

He owned the shares last Monday.

Remember what he tweeted on Thursday?

It doesn’t seem like the internet was too happy with the fact that he already owned the stock and then started tweeting.

Then it jumps, he’s facing a class action lawsuit over what happened to the game people who started asking if Keith Gill might be using a pump and dump level here.

These are just accusations up to this point, but it doesn’t seem like the retail crowd is necessarily following it and sticking around like some of the others.

It was, we had, we have a financial analyst covering Chuy on the show today and it was interesting.

I mean, listen, he’s studying the basics, but it was to get his take on how, you know, listen, you get a news flow like this and you get headlines like this and you get movements like they’re in the stock market.

Um Ai thinks it becomes potentially much more difficult for at least institutional investors to get comfortable with that.

In other words, many of them he thinks will have, you know, who needs that.

Chewy Chuy is much more of a true underlying story than the game stuff.

Right?

And I think that’s probably to the detriment of the company here in some ways to include this kind of thing when they actually had high revenue last quarter.

They have some kind of underlying positive story going with them.

Gamestop.

I think maybe a little more CEO CFO you can control a lot of things, difficult to control.

Noisy kitten.

You don’t know, you don’t know what he’s going to get out of me, right?

And then all of a sudden your stock starts going wild.

Joshua.

Thank you.