candycrushsagagoogleplay| The frenzied recovery of meme stocks is not a good thing, indicating that US stocks are in a bubble

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This week's "meme-stock" boom suggests that the US stock market is in a bubble and may peak, according to a new survey.

GameStop Corp. And AMC Entertainment Holdings Inc., the two favorites of the 2021 meme boom, soared and then plummeted this week after Keith Gill, a retail trading icon nicknamed "Roaring Kitty," posted a mysterious post on social media platform X. GameStop surged nearly 180% on Monday and Tuesday, while Magi AMC surged 135%, but was sold off on Wednesday and Thursday, losing more than half of its gains.

Although the frenzied price movements revived memories of the meme boom a few years ago, many of the 230respondents surveyed by MLIV Pulse suspected it was an encouraging sign for the stock market as a whole. With the s & p 500s and Nasdaq 100s hitting new highs this week, more than 40 per cent of respondents saw the GameStop-AMC deal as a sign of overexcitement and a potential reason to sell. GameStop fell about 25 per cent in early trading on Friday.

"unless the stock market is already a little excited, we won't see such meme stocks continue to soar," Steve Sosnick, chief strategist at Yingtuo Securities, said by telephone.

The MLIV Pulse survey found that 43 per cent of respondents saw the surge in meme stocks as a reverse warning to the future market. About 1/4 of respondents thought this was a positive sign for stock prices. At the same time, 66% of respondents said it did not pose a real threat to the stock market as a whole.

candycrushsagagoogleplay| The frenzied recovery of meme stocks is not a good thing, indicating that US stocks are in a bubble

Compared with the boom of 2021, the recent surge in meme stocks is largely a flash in the pan. At that time, retail investors teamed up to push up the share prices of Wall Street short sellers, which contributed to a massive rebound. The move stems from boring, free brokerage and social media chat rooms during the lockdown, which took weeks for investors and Wall Street professionals to understand. One similarity is that several respondents pointed out that investor boredom was one of the reasons for the latest action.

The stock market rally is mainly due to the resilience of the US economy, where strong consumer spending and falling inflation have fuelled growth and boosted the prospects of US companies.

Fed policymakers have made it clear that they plan to keep interest rates high for a longer period of time to curb inflation. The strength of the economy gives policymakers no reason to rush to cut interest rates.

"if the Fed waits too long to cut interest rates, it could lead to economic weakness and put pressure on the stock market," said Stephanie Lang, chief investment officer of Homrich Berg. "despite the rapid correction of meme stocks, this is a healthy sign for the market."

While investor confidence has been growing, one area of the market suggests it has not gone too far. Athanasios Psarofagis, an analyst at ETF at Bloomberg Industry Research, said leveraged long exchange traded funds, which use derivatives to magnify daily index returns, are far from showing the enthusiasm of the 2021 meme boom.

Another big difference between the latest trend of meme stocks and the 2021 boom is that this time it is driven by seasoned traders rather than retail investors. In the five trading days ended Wednesday, GameStop was the most active stock ordered by clients of Yingtuo Securities, with AMC ranked 17th, according to Sosnick.

Sosnick also said that although there was net buying interest in GameStop, there was also net selling interest in the options market, indicating that investors' covered call options or theirCandycrushsagagoogleplayHis risk control strategy is not just speculation.

That's why Thomas Thornton, the founder of Hedge Fund Telemetry, shorted SPDR Simpp Retail ETF (XRT). GameStop is the fund's largest weight, while debt-ridden online car retailer Carvana Co. (another popular meme stock) is the second.

"it's too dangerous to try to short some of these memes," Thornton said. "God knows if the roaring Hello Kitty will continue to post. I don't need this pressure in my life. "

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