Monday Takeaways: Why GameStop Is Up Nearly 200%… in May

Shah Gilani|May 13, 2024

One of the tricks to successful investing is understanding the story behind the story.

And this week… we’ll see that on display.

Some big numbers are coming out… including PPI, CPI and retail sales.

But it’s not so much about the numbers as it is about how the markets react to them…

That’s what will have the biggest impact on your portfolio.

Plus… everyone’s favorite meme stock is back!

I talk about what it all means for the bull market in your Monday Takeaways.

See what will move markets – and your portfolio – this week in today’s video.

Click on the image below to watch it.

 

Transcript

Hey, everybody. Shah Gilani here with your Monday Takeaways.

It is, not early morning, but it’s certainly morning. The markets haven’t opened, but the futures are pointing to, again, a good day. So far, so good.

So first thing we need to look at is where we’ve just come from.

In the last three weeks, the S&P is up 5%. The Nasdaq Composite’s up 7%. The 10-year Treasury yield is down 13 basis points. So, a pretty good rally in the alley.

The takeaway from that is… yay!

It’s all good.

But we got another week ahead, and we have an important week as far as metrics, as far as numbers.

First up, Tuesday is PPI. We’re going to get a look at the producer price index and what the input costs are for producers. Will they be rising? Will that indicate that inflation at the producer level remains elevated?

It remains to be seen because I think we’re going to be hanging down till then.

More importantly, I think, we got CPI on Wednesday. Now you don’t realize this, but for the last 52 weeks, CPI data has moved the market half the time that the CPI data has been released – has moved the market dramatically.

So Wednesday is a big deal as far as CPI. We also get retail sales this week. We’ve got Jerome Powell talking. There’s just a lot of stuff going on, and I think we got a couple other things.

But those are the most important things.

So the takeaway there is you have to stay glued to the news flow because the numbers are going to be important. The bond market having rallied reasonably well, having handled the auctions reasonably well, is going to be looking for some direction here, and the stock market is going to fly off the bond market’s direction, push or pull, wherever it’s going to be.

If CPI is unexpectedly high – now it’s supposed to be within the 0.1% to 0.3% range – if it’s still 0.4%, multiply that by 12 months, and you get a much higher annual rate of inflation.

The expectation is that it could actually be better, and that would prove that the trend is working its way down to “rah rah,” likely going to be a rally if that happens.

So we have to watch the news flow. It’s about the narrative. It’s about how investors take the news, what they do with it, what the psychology is.

Do they buy? Do they sell? Do they sit on your hands? It’s going to be a fun week for sure.

Something else that’s fun – meme stocks are back. GameStop, people, symbol GME, FYI, is up 57% in May. And what’s today’s date? Oh, it’s the 13th of May.

But that’s okay because in the premarket, it’s up another 30% this morning. It’s Monday morning. GameStop, premarket, up 30%. On the heels of a 57% rise so far already in May.

I love it, people.

That to me is a “risk on” thing. It’s a, like, let’s just buy stuff that we think we can make money on. Let’s try and move stuff higher if you’re playing that game. Let’s just catch some momentum if you’re playing that game, and it’s about risk on.

So the market seems to be saying there’s a space here. There’s a clearing for things to go higher. We are just a stone’s throw away from new all-time highs.

That’s how good things have gotten. Let’s hope it continues that way. But your big takeaway from the numbers that are coming will be the reaction.

The reaction is everything. The numbers are one thing. The reaction is the real story, what markets do in reaction to PPI tomorrow, CPI, retail sales. And I don’t know if Jerome Powell’s going to say much of anything that’s going to move markets this time around, but we got a lot of metrics coming up.

So, swing batter!

I’ll catch you guys next week. Cheers.