Reddit Stocks: What meme stocks are trending today? – September 22, 2023

US futures

• Dow Jones Industrial Average is up 0.2%
• S&P 500 is up 0.3%
• Nasdaq 100 is up 0.5%

US futures are climbing today following a tough week. The S&P 500 is rebounding from a three-month low, the Dow Jones Industrial Average from a two-month low and the Nasdaq 100 is bouncing back from one-month low – with US markets having soured as markets worry over the impact of higher for longer interest rates on the economy, shifting sentiment from hopes of a soft landing to fears of a hard one.

The argument to keep rates elevated and push back hopes for a cut were reinforced by data out yesterday that showed the labour market remains resilient, with weekly applications for unemployment benefits rising at their slowest pace in eight months.

US Flash PMIs

The economic calendar today is headlined by flash PMIs for September. The composite figure is forecast by economists to come in at 50.1, which would represent the mildest rate of growth possible. That is down to the ongoing contraction being seen in the service sector combined with weaker growth in manufacturing. That would also mark the fourth consecutive month-on-month of slower growth as the US economy cools.

The Federal Reserve’s Lisa Cook is also giving a speech early this morning.

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. Visa
2. NVIDIA
3. Tesla
4. C3.ai
5. Apple
6. Microsoft
7. AMD
8. Arm
9. Amazon
10. Disney

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. Seagen
2. Tesla
3. Amazon
4. Lucid Group
5. Pinduoduo
6. NVIDIA
7. Apple
8. JD.com
9. AMD
10. AstraZeneca

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.

Will IPO market survive its first test?

The IPO market has erupted back into life over the past week but the jury is still out on how much appetite the markets have for new listings.

Chip designer Arm and grocery tech platform Instacart both slipped below their IPO prices yesterday before rebounding, and trading volumes have consistently declined every day since they went public. The latest to test the waters, Klaviyo, has also tested its listing price since joining the markets earlier this week. All three are trading higher before the bell today.

The downturn in broader markets following the Fed’s hawkish hold has created a tough environment for the trio, which were already set to see their valuations tested by slower growth prospects.

Microsoft and Activision to clear last hurdle

Microsoft is up 0.4% this morning while Activision Blizzard is up 1.8% at $94.05. That is in response to the UK Competition & Markets Authority signalling it is willing to clear the pair’s $69 billion merger after Microsoft committed to selling gaming rights to French firm Ubisoft to allay concerns about the impact it could have on competition.

The CMA said this commitment “substantially addresses previous concerns” and said there are only “residual concerns” left to consider. The UK is the last country set to approve the deal. The US Federal Trade Commission has tried to scupper the deal but has been unsuccessful. That means confidence has never been higher that the deal will go ahead. As a result, Activision shares have never traded as close to the $95 offer price as it is today.

Amazon’s ad push snaps losing streak

Amazon shares are up 1.4% and hoping to end a six-day losing streak that has wiped over $100 billion off its valuation.

The stock is finding support after announcing it intends to introduce adverts to its Amazon Prime Video service from early 2024, with users set to cough-up more money to keep enjoying an ad-free experience. It will cost an additional $2.99 to keep the adverts away. Adverts are set to hit markets in the US, UK, Germany and Canada early next year, followed by others like France, Spain, Italy, Mexico and Australia later in the year.

The move comes as the entire streaming industry grapples with slower growth, which has already prompted rivals like Netflix and Disney to introduce ad-supported tiers.

Can Apple iPhone 15 launch revive demand?

Apple shares are up 0.7% as the iPhone 15 hits the shelves and starts shipping to customers today.

The new handset, as well as its recently-updated watches, will be available in around 40 countries from today. Analysts have said pre-orders were higher than anticipated, although roughly flat from the iPhone 14 and buoyed by higher prices as more people shift to its priciest Pro Max model to benefit from more upgrades.

Initial sales in certain countries will be closely watched. China, which accounts for about a fifth of Apple’s overall sales, is the most interesting amid fears that government workers are being told not to use foreign-made tech and that domestic rival Huawei’s latest smartphone is proving highly popular. Meanwhile, India is becoming an increasingly important market for Apple and this is the first year the country has seen the new iPhone launched at the same time as other major markets. France is also worth watching because store workers are striking over pay and conditions, which may hurt in-store sales.

US automakers face looming UAW deadline

Ford, General Motors and Stellantis are mixed today as the clock ticks down to the deadline imposed by the United Auto Workers union, which has threatened to expand industrial action if significant progress isn’t made today.

This is the eight day of strike action, but only around 10% of the UAW are striking at three plants at present, one at each company. The UAW is threatening to ratchet-up the pressure if the ‘Big Three’ don’t strike a deal by noon today.

The UAW wants inflation-busting pay rises and better conditions for its workers while automakers fret over their costs, having already been forced to furlough and layoff some staff after just eight days of strike action. Reports suggest the automakers have offered pay rises of around 20%, but the UAW wants around double that!

For the automakers, they will be continually weighing-up the cost of caving-in to union demands versus the losses stemming from strikes. Balance sheets are healthy for now, but management’s willingness to give the UAW what it wants could rise if cash levels start to dwindle over time. Reputational damage could also be significant, and they will also be worrying about how it could impact their shift to electric.

There could be much more pain to come if this is just the start to prolonged industrial action and there is likely to be implications for wider US economy. The automotive industry accounts for around 3% of US GDP and we are already seeing the negative impacts ripple through the wider supply chain.”

Hollywood writers and studio fail to strike a deal

Executives from Disney, Netflix, Comcast and Warner Bros Discovery have been unable to end the strike action being undertaken by writers and actors in Hollywood during a two-day meeting this week, according to CNN, casting doubt over when or if an agreement will be reached.

Writers have been on strike since early May and actors followed them in July. Impacted stocks were gaining ground yesterday and reports that a deal was close. CNN said it was not clear when talks would resume.

Chinese ADRs up on foreign ownership changes

Alibaba, JD.com and Pinduoduo are up 3.7% to 4.2% this morning amid reports that the Chinese government is relxing rules on foreign ownership of domestically-listed companies, according to Bloomberg. That may be in an effort to help make its stock markets more attractive to foreign investors, which currently face limits on how much they can own of Chinese companies.

Will Tesla fail to impress with Q3 deliveries?

Tesla shares are up 0.5% this morning. Barclays warned it believes the electric vehicle maker will deliver fewer cars than markets expect in the third quarter based on recent commentary on production.

Barclays said it thinks Tesla will deliver 455,000 vehicles in the quarter, below the average analyst estimate of 463,000. That would be down from the 466,000 units shipped in the second quarter but up 35% from the year before.

AstraZeneca up on positive trial results

AstraZeneca’s shares in the US are up 2.7% after the British pharmaceutical firm said the latest Phase 3 trial of Datopotamab deruxtecan, or Dato-DXd, showed statistically significant and clinically meaningful progression-free survival benefit in patients with certain types of breast cancer. It was trialled against chemotherapy.

Shore Capital said this could “reinvigorate sentiment” toward its efforts to introduce drugs that can replace chemotherapy for a range of cancers.

Will Charter accelerate growth?

Charter Communications is up 1.8% at $455 after Wells Fargo upgraded the stock to Overweight on the belief that its growth will reaccelerate, raising its target price to $550 from $450.

McDonalds to squeeze more out of new franchisees

McDonalds is up 0.8% amid reports it is imposing higher royalty fees for new franchisees launching restaurants in the US, marking the first increase in almost thirty years, according to CNBC.

Fees will rise from 4% today to 5% at the start of 2024, the report said citing a message from president Joe Erlinger. Existing franchisees will stay on their existing rate, including if they purchase stores from other operators.

Chip stocks to fall for 3^rd straight week

US chip stocks will book their third consecutive week of losses when markets close today, with the Philadelphia Semiconductor Index having sunk to its lowest level in four months. NVIDIA is up 1.1% this morning after hitting a five-week low yesterday, while AMD is up 0.7% and rebounding from a four-month low.

The entire sector has been under pressure since the start of August, resulting in the stellar gains seen in 2023 unwind, and is now underperforming the broader market. The boost from AI has waned and valuations are now tempering. Notably, the semiconductor index is now trading at a noticeable discount to the Nasdaq 100.

How to trade US stocks

You can trade US stocks and indices with City Index in just four easy steps:

1. Open a City Index account, or log-in if you’re already a customer.
2. Search for the stock or instrument you want in our award-winning platform
3. Choose your position and size, and your stop and limit levels
4. Place the trade

Or you can practice trading risk-free by signing up for our Demo Trading Account.