'Reviled' meme stocks await market calm to attempt a comeback
BNN Bloomberg
Beaten-down meme stocks could stage a comeback if solid economic and earnings growth help repair battered investor sentiment.
Beaten-down meme stocks could stage a comeback if solid economic and earnings growth help repair battered investor sentiment.
That’s according to Evercore ISI’s Julian Emanuel, who in late 2019 predicted the retail-investing boom. The strategist says a robust corporate and economic environment is likely to help revive such shares this year if “cooler heads prevail” in coming weeks, helping to alleviate the dour mood in markets.
There’s a lot of negative sentiment to overcome. Many stocks that peaked early last year amid the retail-trading frenzy are significantly off their highs as concern grows about the impact of Federal Reserve rate hikes and inflation. A gauge of retail favorites from Nomura Holdings Inc. and Wolfe Research has slumped over 30 per cent from a November high.
Yet Emanuel sees reason for optimism.
“We look for equities to stabilize,” he wrote in a note Sunday. “Could the same meme/concept/profitless stocks now heavily shorted and universally reviled, which topped in 2021’s triumph, be set to rally?”
