U.S. equity markets closed solidly higher Thursday, as the S&P 500 and the Nasdaq Composite both rallied in the afternoon to close at record highs. Friday’s premarket trading has seen the Nasdaq down by nearly 1% and the S&P 500 down by about half a point. The Dow Jones industrials, trading down about 0.1%, was the least affected index. The revenue misses by Apple and Amazon, reported after markets closed Thursday, are certainly major reasons for Friday’s so-far weak showing.
In other early morning action, crude oil was up slightly, trading at just over $83 a barrel, while Bitcoin traded down more than 1% at around $60,800. Yields on 10-year Treasury notes have moved a couple of basis points higher too. The most-anticipated economic data is the report on September personal income and outlays. Included in the report is the personal consumption expenditures (PCE) deflator, the Federal Reserve’s indicator of choice for inflation. The core PCE index is forecast to rise by 0.2% month over month and 3.7% year over year.
In our watch list of meme stocks, Thursday’s best-performing stock was electric vehicle maker Lucid Group Inc. (NASDAQ: LCID), which added more than 31% to its share price to close at $35.48. The stock was up about 3.6% in Friday’s premarket. The company announced Wednesday that deliveries of the first group of its Dream Edition of the Lucid Air to customers will take place soon. Trading volume was more than 10 times the daily average of 33 million shares. Lucid generated the most chatter on WallStreetBets Thursday, with most of the comments somewhat neutral on the stock.
Tesla Inc. (NASDAQ: TSLA) added about 3.7% to its share price Thursday and traded up less than 1% in Friday’s premarket. In our midday report on Thursday, we noted the bullish comments on the company from analysts at Loup Funds. Friday morning, Reuters cited Volkswagen CEO Herbert Deiss’ comments on VW’s conference call: “The recent achievements of Tesla are sending a clear message. We have to prepare for a new phase of competition.” Regarding Tesla’s Berlin assembly plant that is soon to begin production, Deiss said:
Tesla Gruenheide is for us for sure a new reference, setting new benchmarks when it comes to speed, productivity, also lean management and we have to adjust ourselves to that. … We have to prepare manufacturing for much reduced labour in some of the lines. We have to prepare for less complexity, for more speed, line speed.
Imitation: still the sincerest form of flattery.
Two other EV makers, Workhorse and Canoo, added more than 8% to their share prices, basking in the glow of Lucid’s massive gain.
Thursday’s biggest meme stock loser was cybersecurity firm IronNet Inc. (NYSE: IRNT), which tumbled by nearly 25%, after adding nearly 60% on Wednesday. The company had no specific news that would account for such big swings. The stock was down 3.7% in the premarket.
One of the more recent additions to our watch list is iron-flow battery maker ESS Inc. (NYSE: GWH). The stock dropped 1.2% on Thursday and traded down by another 0.8% early Friday. In a federal filing Thursday, the company said it fired the accounting firm that had been doing the company’s books prior to its SPAC merger and hired Ernst & Young as its accounting firm for the year ending on December 31. ESS was not happy that its former accountants inserted a paragraph in the 2020 financial statement “related to substantial doubt to continue as a going concern but did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.”