Can Social Media Save the Stock Market?

Stocks wandered aimlessly following Monday’s big gap higher.

While the major averages consolidated their gains, investors digested what the trade war truce means for the markets. We’ll have to see if stocks build on this positive news to rally into the holidays — or chop us into pieces.

For now, the financial media has moved on to the next potential crisis: a year-end government shutdown.

Not to worry, says Senate Majority Leader Mitch McConnell. Lawmakers will avert a shutdown before the end of the month.

Maybe so. But I’m sure we’ll still endure more than our fair share of political posturing and media sensationalism before the job is finished.

Let’s ditch politics for now and check out what’s moving the markets this week…

If you’re searching for the perfect Christmas gift for that special someone, perhaps you’d like to purchase a $1,000 jacket.

Winter coats made by Canada Goose Holdings Inc. (NYSE:GOOS) are all the rage these days. While these fancy jackets will keep you nice and toasty this winter, most retail for more than $1,000.

Despite (or maybe because of?) the hefty price tag, Canada Goose coats are flying off the shelves. GOOS is one of the best performing retail names on the market this year. Shares have more than doubled year-to-date and are quickly approaching new highs…

GOOS

Don’t fret if you can’t justify plunking down more than a grand on a trendy coat. You can buy a counterfeit Canada Goose patch online for about $5, according to MarketWatch. Sew it on the sleeve of your old parka and I guarantee you’ll get invited to sit with the cool kids at lunch.

On the opposite end of the fashion spectrum, Payless Shoes just punked a gaggle of social media influencers with a fake pop-up store.

Payless set up a high-end pop-up store called Palessi, stocked it with discount shoes marked with luxury price tags, then invited social media stars to come out for an exclusive shopping event.

The Instagram “influencers” took the bait.

“About 80 influencers attended over two nights, according to Payless.” CNN reports. “They shelled out a total of $3,000. One shopper spent $640 for a pair of boots, which represented an 1,800% markup. Payless, however, returned their money and let them keep the shoes.”

While this little marketing stunt attracted some free media coverage, I wonder if the discount shoe game is a better business than $1,000 jackets. After all, Payless is just now recovering from last year’s Chapter 11 restructuring which forced the chain to close almost 700 stores.

Still, can social media street cred resurrect a dying brand? Or even better — a failing stock?

We’ve quietly searched for an answer to this illusive question for more than a year now. In fact, my publisher has shelled out thousands of dollars to help us launch this cutting-edge research.

But he’s asking you to sign this form before you see what he shares.

Why?

For one very good reason – click here to see it.

Finally, let’s check in on our favorite beaten-down trades.

Despite an early morning dip, the iShares U.S. Home Construction ETF (NYSE:ITB) finished near its highs of the day with a 1.3% gain. Invesco Solar ETF (NYSE:TAN) look a little stronger, clocking a gain of 1.6% on the day. Both plays performed better than the S&P 500 to start the week.

But yesterday’s big winner was the iShares MSCI Emerging Markets ETF (NYSE:EEM), which surged higher by more than 2% to finally break out of that ugly downtrend that has weighed on shares since February. A little momentum here could push shares toward $44.

I’m also pleased to see the VanEck Vectors Semiconductor ETF (NYSE:SMH) looking healthier. I’ve kept a close eye on the semiconductor sector ever since it started leading the market lower in early October. For most of the correction, the chip stocks have posted some of the ugliest charts on the market.

SMH

A couple of industry leaders finally caught a bid yesterday. Former highflyer NVIDIA Corp. (NASDAQ:NVDA) jumped 4%, while Advanced Micro Devices (NASDAQ:AMD) blasted higher by more than 11%.

It would be a huge win for the bulls if these former market leaders could maintain rallies into the end of the year. I’ll keep a close eye on the action…

Sincerely,

Greg Guenthner

Reminder:  U.S. markets are closed tomorrow in observation of a national day of mourning to honor the late George H.W. Bush. I’ll be back early Thursday morning with more trade ideas and market insight.

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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