Booze Barons Hop on the Weed Bandwagon
Do I trust this market?
But that doesn’t mean we can’t enjoy this week’s bounce — no matter how short-lived it might be.
The major averages cobbled together their second-straight day of gains to close out a downright terrible month for stocks. The Dow jumped 240 points. The Nasdaq Composite gained more than 2%. The only smudge on an otherwise positive day was a late afternoon fade that ate into some of the day’s gains.
Even though the averages faded into the afternoon bell, beaten-down tech stocks posted a strong day.
The fallen FANGs enjoyed a green day, adding some much-needed momentum to the Nasdaq recovery. By mid-morning, the group was enjoying its best collective performance in almost three years:
Following the afternoon profit-taking, Netflix finished the day up more than 5%. Amazon gained more than 4%. Facebook endured the biggest drop from its morning highs. It finished the day up 3.8%.
More importantly, Apple reports earnings this evening. After dropping just 3% during the October correction, the reaction to Apple’s numbers could set the tone for the new trading month due to its looming presence in the Dow and heavy Nasdaq weighting.
Meanwhile, beaten-down pot stocks try to find a floor as election day approaches.
We’ve paid close attention to the weed industry following its worst performing week in nine months…
Pot stocks were an unexpected refuge during the initial bout of market weakness we experienced in early October. But these plays soon lost momentum and quickly moved against traders as a sagging market sucked shares into a black hole.
Tilray Inc. (NASDAQ: TLRY) and newly-listed Aurora Cannabis (NYSE: ACB) dropped more than 16% to kick off the trading week. Both stocks recovered some of their losses yesterday, with ACB streaking higher by almost 12%.
I expect these volatile stocks to remain in the spotlight as Election Day approaches. Remember, four more states are now ready to vote on marijuana.
What will the vote results tell us about the marijuana markets?
Which pot stocks could shoot up the most starting Wednesday after the ballots are counted?
Just how much money is out there for the taking as cannabis legalization spreads?
Billions, according to one beverage industry CEO.
As beer sales drop, Molson Coors Brewing Co. (NYSE: TAP) CEO Mark Hunter says the cannabis market could add up to $7 billion to $10 billion — and that’s just in Canada.
Hunter’s backing up his bullish predictions by hitching his weed biz prospects to Canadian marijuana cultivator HEXO to help develop cannabis-infused beverages, Bloomberg notes.
“Nonalcoholic cannabis-infused beverages could account for as much as $3 billion,” the Bloomberg report continues, “or 30% of the total market.”
Are the folks at Molson just blowing smoke, or do they see a future in marrying their cannabis and booze businesses? No matter what happens, the company needs to get back on track. Even after yesterday’s 9% rally following a big earnings beat, TAP is more than 35% below its all-time highs posted over two years ago.
While the booze barons are hopping on the weed bandwagon, Coca-Cola has decided to stay sober.
Coca-Cola Co. (NYSE: KO) CEO James Quincey told CNBC this week that “Cannabis is not something we’re interested in” following multiple reports that have attempted to tie the soda giant to cannabis-infused drinks.
Is Coca-Cola missing out on a huge opportunity?
Investors don’t seem to care. KO shares have deified gravity this month. The stock broke out to new all-time highs earlier this week — and it hasn’t looked back since:
I’ll be watching to see if today’s action can hold up following yesterday’s afternoon fade.
We’ll need to see evidence of a sustainable bounce before we can too bullish at this juncture…
More updates coming soon.
For Technology Profits Daily,
Chief Trading Expert
Editor’s note: The day after election day Nov. 6, select marijuana stocks could skyrocket as high as 1,472%, 6,352% and even a ridiculous 19,305%.
It’s why Ray Blanco, along with special guest host, Emmy Award winning TV personality Montel Williams are hosting a live, one-night-only ELECTION NIGHT EVENT Tuesday, November 6 at 8:00 pm EST.