Reddit Stocks: What meme stocks are trending today? – September 13, 2023

US futures

• Dow Jones Industrial Average is down 0.1%
• S&P 500 is down 0.2%
• Nasdaq 100 is down 0.3%

US futures are lower as inflationary woes weigh on the markets.

Oil prices hit 10-month high

Oil prices continue to push higher, with Brent and WTI both rising to fresh 10-month highs this morning amid rising bets that the market will remain tight this year thanks to production cuts in Saudi Arabia and Russia whilst US inventories continue to plummet. That, in turn, is prompting fears that oil could revive inflation rates and keep interest rates higher for longer.

US CPI inflation

US CPI rose 0.6% month-on-month in August, accelerating from the previous reading of 0.2% and coming as expected. Inflation was 3.7% higher than the year before, slightly ahead of the 3.6% forecast due to rounding.

The more closely-watched core inflation rate was up 0.3% from the previous month in August and up 4.3% from last year, which compared to the expected 0.2% monthly increase and 4.3% annual rise.

CPI met expectations and core came in slightly higher than markets wanted, which is unlikely to be enough to drive confidence that the Federal Reserve is definitely done with interest rate hikes and supports the Fed to keep its ‘wait-and-see’ narrative. The Fed meets next week and markets are expecting it to hold rates steady, but markets still see scope for another hike further down the road.

The economic calendar is light for the remainder of the day, with eyes now turning to tomorrow’s busy agenda when we will have US PPI inflation data, retail sales figures and initial jobless claims – as well as the latest interest rate decision from the European Central Bank.

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

1. Apple
2. Tesla
3. C3.ai
4. NVIDIA
5. Visa
6. Eli Lilly
7. Canopy Growth
8. Oracle
9. Moderna
10. Tilray

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. Grab
2. Nikola
3. American Airlines
4. Tesla
5. Tilray
6. Apple
7. Rocket Pharmaceuticals
8. Ford
9. Granite Ridge Resources
10. Palantir

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

Let’s have a look at the top stocks to watch today.

New iPhone 15 fails to boosts Apple stock

Apple shares are up 0.2% after the launch of the new iPhone 15 yesterday failed to impress the markets, which are becoming increasingly concerned about its prospects in China.

The new models came with incremental upgrades and most were saved for its Pro models. Prices have been left unchanged apart from its top-end model, the Pro Max, which has seen its starting price lifted by $100. Apple will start to take pre-orders for the iPhone 15 on Friday September 15 and they will begin to be shipped to customers and on the shelves from Friday September 22. We do not know what sort of volumes Apple is targeting but higher prices are expected to boost revenue.

That has failed to provide a much-needed catalyst following the selloff that has wiped hundreds of billions of dollars off Apple’s valuation in recent weeks. Apple shares have been under pressure since a broader pullback in tech stocks occurred at the start of August, but the stock is still up over 40% this year and we may have seen some wait for the much-hyped event before cashing-in some profits. It is currently on course to suffer its sharpest monthly fall of 2023 in September, which has historically been a poor month for the stock in recent years before rebounding later in the year as the new iPhone takes off.

There was some good news today after the Chinese foreign ministry said there is no ban on buying iPhones or other foreign smartphones, but markets may worry that while an outright ban isn’t on the table, government workers may still be discouraged from opting for Western-designed phones. 

That is especially true following news just hours before the Apple event that Huawei’s latest model is flying off the shelves and that it has raised its shipment target for the new Mate 60 Pro by 20% in the second half of 2023. Huawei is the fastest-growing smartphone brand in China and investors are worried Apple could fall further down the league table as a result of more intense domestic competition.

You can read more and find our latest technical analysis in How Will the New iPhone 15 and Threats in China Impact Apple Stock?

Can Adobe stock keep up the momentum?

Adobe shares down 0.4% and at September-lows ahead of third quarter results out later. Adobe has been one of the best performers in the Nasdaq 100 in 2023, with shares up 66% and lingering not far from levels that were last seen in late 2021! Adobe delivered record revenue and adjusted EPS in the previous quarter and is expected to break both of these when it reports results this week.

Adobe has not been immune to the slowdown in enterprise IT spending but it has proven more resilient than most thanks to strong demand for its array of software, while its high margins have also managed to defy the inflationary environment. The stock has also found support from artificial intelligence, which has become the hottest investment trend of the year. Adobe’s software, particularly its Firefly platform, is in a prime position to be among the first to benefit from the technology considering how well it fits the earliest applications of generative AI for images, text and voice.

Consensus figures and recent commentary from brokers suggest there is a chance of a beat and raise, although this may be necessary to impress given the surge in value this year has raised the bar.

Find out what to expect, including all the consensus numbers to look out for and our latest technical analysis on the stock, in our Adobe Q3 Earnings Preview.

NVIDIA stock hits 3-week low

NVIDIA shares are down 0.4% after closing at its lowest level in three weeks yesterday. The hype around AI that ripped through Wall Street this year has tempered since the start of August, as markets wait to see how big the near-term rewards are before assigning pushing up already lofty valuations.

The correction does mean that NVIDIA’s forward price-to-earnings ratio has continued to fall to new 2023-lows, with the metric currently sat at 31.2x. That is the result of estimates continuing to head higher and the fall in its share price in recent weeks.

Oracle stock suffers largest fall since 2002

Oracle shares are down 0.6% at $109 and set to open at fresh three-month lows after suffering a sharp 13.5% drop yesterday, marking the steepest daily drop since 2002!

The selloff was prompted by its latest results. Although they beat expectations, this was overshadowed by a slowdown in its cloud business, where the bar was set rather high. That has dented confidence in its ability to catch-up to bigger rivals like Amazon and Microsoft, and suggests AI is yet to provide a major tailwind despite management citing strong enthusiasm for the technology. Investors may have also been spooked by signs Oracle is dealing with shortages as it tries to build the all-important datacentres for its cloud business.

JPMorgan downgraded the stock to Neutral and lowered its target price to $100 from $112. It said there are fears growth at the cloud business is already peaking. Citigroup lowered its view to $120 from $138.

Tesla sourcing more parts from India

Tesla shares are up 0.6% today. The company is expected to buy $1.7 billion to $1.9 billion worth of components from India this year, marking a big jump from the $1.0 billion it bought last year, according to commerce minister Piyush Goyal.

A report from Reuters last month suggested Tesla is considering opening a plant in the country that would be able to produce cars that could be sold up to 25% cheaper than its current entry-level model, allowing to push into the domestic market while bolstering exports of higher-margin vehicles.

Chinese EV makers hurt by EU investigation

NIO, Li Auto and Xpeng are down 2% to 3.5% after the European Commission said it is investigating whether to impose tariffs on electric vehicles imported from China in an effort to protect its automotive industry amid concerns that Chinese subsidies are distorting the market.

“Global markets are now flooded with cheaper electric cars and their price is kept artificially low by huge state subsidies,” said EC president Ursula von der Leyen. The commission could take over a year to complete the investigation and could lead to new tariffs being imposed that would make Chinese vehicles more expensive for European buyers and could hinder their international expansion plans.

Grab suffers from Ryde IPO

Grab shares are down almost 8% as investors turn their attention to the value on offer from a smaller ride-sharing app named Ryde as it goes public today in Singapore.

Aletheia Capital told Bloomberg that Grab was suffering because investors were pulling money out to put into Ryde, as it offers a better valuation of around 3.5x sales while Grab’s metric sits closer to 6.0x.

How high can Eli Lilly go?

There is no stopping Eli Lilly’s share price. The stock, which is down 0.6% today, has set a new closing high for six consecutive sessions as it rips higher on excitement over its diabetes and weight loss drug. The RSI is showing its strongest oversold reading since the start of 2021 but market enthusiasm is clearly overriding this considering it has been in oversold territory for over a month!

Eli Lilly has delivered reliable, annual share price gains for seven consecutive years and 2023 is set to be the best on record. Eli Lilly is up 64% since the start of the year and currently trades at a forward price-to-earnings ratio of 51x!

Guggenheim raised its target price on the stock yesterday to $620 from $474, becoming one of the latest to signal there is more upside potential from here.

Novo Nordisk falls from grace after stock split

Novo Nordisk shares on the NYSE are down 2.3% today after the Danish pharmaceutical giant, which became Europe’s most valuable company this year as it too attracts investors with its diabetes and weight loss drugs, completed its first stock split in a decade.

Novo Nordisk complete a 2-for-1 stock split, meaning investors will get two new shares for every one they currently own in an effort to bring the price of each share down. The stock also recently hit all-time highs after soaring 43% year-to-date, leaving it with a lower valuation multiple than its US rival at 33x.

Moderna eyes big bucks from new drugs

Moderna is up over 6%. The company reiterated its ambition of generating $6 billion to $8 billion of sales this year ahead and outlined plans to potentially triple its topline over the coming years as it launches new products.

The company, known for its Covid-19 vaccine, is pushing to diversify and create new drugs and intends to invest $25 billion in R&D between 2024 and 2028. That should help it add $10 billion to $15 billion to its annual sales within five years, in addition to the $8 billion to $15 billion in annual sales it is targeting from new respiratory drugs.

Moderna also said today that its flu vaccine met its primary endpoint in the latest Phase 3 trial and that its trial of its updated Covid-19 vaccine is also progressing.

US airlines feel the heat from higher fuel costs

American Airlines is down 3.5% after warning higher fuel costs will impact its results in the third quarter, prompting it to become the latest to lower its guidance following similar warnings from Southwest Airlines, United Airlines and Alaska Air.

American Airlines said adjusted EPS will now be between $0.20 to $0.30 in the third quarter, a huge slump from the previous outlook that said earnings would be as high as $0.90. That is because it is now expecting to spend $2.90 to $3.00 per gallon of fuel, up from its previous range of $2.55 to $2.65.

Meanwhile, Spirit Airlines is also losing ground after it lowered its outlook for the year because of the recent spike in fuel prices.

The company said it is expecting to pay $3.06 per gallon of fuel in the third quarter, a considerable jump from the $2.80 it previously forecast. It also said it expects third-quarter revenue to be between $1.24 billion to $1.25 billion, down from its previous goal of $1.30 billion to $1.32 billion.

Canopy Growth and Tilray give back gains

Canopy Growth is down 4.5% and building on the heavy losses seen yesterday, when it dropped 20% following a spike in its share price thanks to an over-zealous buying spree spurred-on by hopes the US marijuana industry was edging closer to federal legalisation.

Canopy Growth soared to five-month highs earlier this week on hopes that the US government is pushing ahead with key regulation change by holding a vote on the SAFE Banking Act, which would allow banks to service legal marijuana companies, removing a key hurdle for the industry that is still having to operate with different laws across different US states.

However, the excitement was short-lived as analysts cast doubt over the level of progress that will be made. Analysts at Bloomberg Intelligence suggested they only see a 40% chance of it being approved if it does go to a vote. It said it could easily pass at the committee level, but that there is little support for it among GOP leadership. It also said it doubts major publicly-listed banks would be willing to serve marijuana businesses even if it did pass because the drug has still not been legalised at the federal level.

Meanwhile, Tilray is down 0.7% and also losing ground after benefiting from a very brief bump in sentiment.

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