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Today in the Market (5/13/2024)

Good Morning! On Monday, the U.S. stock market had a slow mixed closing, with a resurgence in meme stock Gamestop (GME) & AMC (AMC). 

The S&P 500 barely closed under by 0.02%, while the Dow Jones 8-day streak comes to an end by ending down by 0.21%. However, the NASDAQ saw some gains today by increasing 0.29%.

THE PERSON THAT STARTED IT ALL IS BACK...

GameStop (GME) had a significant surge of up to 110% on Monday, but it later reduced its gains (74.40%). Due to its high volatility, trading of the stock was interrupted many times. This surge occurred when “Roaring Kitty,” who is considered to have initiated the frenzy over meme stocks during the pandemic, made their first Twitter post since 2021.

So what was so special about this post? Well… let’s back up first. Keith Gill, known as “Roaring Kitty,” gained significant attention on the WallStreetBets forum and YouTube for his optimistic position on GameStop and hasn’t made a post since 2021. So what did he post after all this time? It was a picture depicting a serious-looking gamer leaning forward… that’s it. 

Even though it did cause a resurgence in the stock, it has been a whole new environment since 2021. The previous GameStop drama gained significant attention three years ago, before the Federal Reserve’s commencement of raising interest rates in March 2022 at an exceptionally rapid rate to mitigate inflation. Now… retail traders have seen a reversal of fortunes as a result of rising borrowing rates, which have led to a reduction in their holdings in hazardous assets.

NOT ON MY WATCH

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According to the WSJ, the U.S. government is planning to increase tariffs on Chinese cars from the current rate of 25% to a whopping 100%. This would in turn make these cars very costly to sell in the U.S. The Biden administration isn’t stopping there… They will also be implementing higher tariffs on renewable energy commodities exported from China. This will include minerals, solar cells, and batteries, which are planned to safeguard the American companies involved in the production of the listed products.

So why the increase in tariffs? Chinese EVs pose a significant danger to American manufacturers since they have high quality but still have a lower price due to government subsidies. The difference can’t be that great right? Well… According to Dunne Insights, the average price of an EV in the U.S. is around $47,500 compared to China EVs which is only $28,000

However, not everyone agrees! The people that are opposed to the impending tariffs argue that this would not be effective in lowering emissions. This is due to the fact that with high cost of EVs is the primary obstacle for people to switch to EVs so why should the U.S. prevent cheaper options of EVs from the market

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