- Wall Street professionals and individual investors believe the meme stock will become a durable feature of the market landscape.
- In the latest MLIV Pulse survey, nearly two-thirds of 522 respondents expect some version of the meme stock mania to stick around and this could simply because of their speculative nature.
While loose monetary policy may have birthed the meme stock frenzy, even the era of central bank hawkishness hasn’t been able to usher in the death of this pandemic-era trade.
To be sure, speculating in meme stocks has brought only pain this year, with a basket of 37 retail-trader favorites tracked by Bloomberg down nearly 40%.
The meme stock movement has added volatility into corners of a market already contending with rising interest rates, recession risks and a steep drop from record highs, but has also led to some surprising rebounds.
This month, Bed Bath & Beyond (+5.94%) and AMC Entertainment (-4.48%), two retail meme favorites, were surging, only to give back the gains just as quickly.
It appears that investors (punters) can’t seem to get enough of the casino-like behavior of some of these meme stocks.
Nevertheless, Wall Street professionals and individual investors believe the meme stock will become a durable feature of the market landscape.
In the latest MLIV Pulse survey, nearly two-thirds of 522 respondents expect some version of the meme stock mania to stick around and this could simply because of their speculative nature.
But the survey also found that while the meme-stock phenomenon is likely to stick around, 69% believe it’s unlikely to see the trading volumes it did during its January 2021 height and are therefore unlikely to be a good bet for the remainder of the year as central banks globally tighten policy.
According to Vanda Research, individual investors have recently pushed US$1.2 billion per day into U.S.-listed securities, well below expectations for a US$1.3 billion to US$1.4 billion influx and against a backdrop of rising costs of living.
The retail trading crowd faces a crucial inflection point as summer draws to a close and meme stocks are a good bellwether for retail appetite for more speculative corners of the market.
