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If you spent the trading day bored by tracking a potentially major armed incursion in Eastern Europe and the plunging effect it had on U.S. stocks, you might want to check out social media to get your after-the-bell jollies.
While most everyone else was watching the “Joe and Vlad Show” and pricing out just how scary things would become, some retail investors on Reddit and Twitter were positing their own views of Russia’s move to move troops to eastern Ukraine, and despite the Dow Jones Industrial Average
DJIA,
falling 482 points, that view was quite optimistic.
“The fed raising rates will tank the markets a lot more than an attack on Ukraine,” mused user amelie106 on subreddit r/WallStreetBets. “However, an attack on Ukraine may cause the fed to delay raising rates and that would be bullish.”
That sentiment was echoed across numerous subreddits by other self-professed Apes, who once again blamed short sellers for the equity markets’ major pullback on Tuesday, with some going as far as to frame the whole conflict as almost a false-flag operation meant to distract the world from the ongoing Department of Justice/Securities and Exchange Commission investigation into short-selling firms and Wall Street block trading.
One popular post on subreddit r/Superstonk compared the media’s coverage of the escalating conflict to the 1997 film “Wag the Dog.”
“This is a fact,” one commenter responded to the comparison. “Powers that be definitely need a distraction at the moment.”
Speaking of the “powers that be,” let’s circle back to the theory that Tuesday’s hectic action could keep Federal Reserve Chairman Jay Powell from pursuing his plan to raise interest rates aggressively in 2022.
That hope seems pinned on pretty thin evidence considering inflation remains hovering around 7% and the bond market feels very spooky indeed. It also speaks to the fact that the cheap-money addiction is still gripping retail investors, many of whom have yet to experience the thrill of playing with stocks in an environment with actual interest rates.
As our dear granny used to say: Wishful thinking in the face of multiple macro crises won’t keep the federal fund rates just above zero, my dear.
But whatever your take on how retail investors engaged with Tuesday’s fire hose of news, they definitely appeared to put their money where their virtual mouths were, as AMC Entertainment
AMC,
shares went green briefly in early trading, and shares of GameStop
GME,
went positive twice on the day with calls to “buy the dip” echoing around social media.
Many Apes were left fuming at the closing bell, however, as AMC closed down almost 8% and GameStop nearly 3%, and they were quick to blame their short-selling nemeses for the fallout.
Once again, you have to agree with their logic.
Tuesday indeed saw a short-selling tsunami across markets… which makes sense, what with the expectation of rising rates, the actual existence of inflation and –wagged dog or not — an armed invasion in Europe.
Upon further contemplation of DWAC
“Everyone’s” “favorite” MAGA SPAC had a very big day, with shares of Digital World Acquisition Corp.
DWAC,
jumping 10.2%, but the gains weren’t as bigly as they looked to be at the opening bell.
DWAC, which is still in the process of merging with ex-President Donald Trump’s Trump Media & Technology Group, initially soared on news that TMTG has finally launched its TRUTH Social app. But the Twitter clone had a rather buggy second birth and the SPAC merger remains unconsummated, and might remain so if Trump does indeed attempt to reclaim the White House in 2024.
In addition to the wider market selloff, that consternation over DWAC’s actual value might explain why it closed 5.8% lower after opening up more than 16% on the day.
New MemeMarkets
Gary Gensler is a power bald with a flashlight.
We can explain…
