Big Data = Big Money
The Nasdaq Composite powered the market higher to kick off the new trading week thanks in part to a major acquisition in one of tech’s hottest industries.
Salesforce.com Inc. (NYSE:CRM) provided a caffeine jolt to Wall Street early Monday morning when the firm agreed to acquire data analytics software company Tableau Software (NADSAQ:DATA) for $15 billion in stock.
Salesforce has spent more than its fair share of coin on some expensive acquisitions over the past few years, The Wall Street Journal reports, but the Tableau purchase ranks as its biggest buy in company history.
The deal, which pushed Tableau shares to a gain of more than 33%, comes just days after Alphabet Inc. (NASDAQ:GOOGL) announced its own purchase of data analytics startup Looker. Both Alphabet and Salesforce are shoring up their data offerings for cloud customers to fend off major competitors such as Microsoft Inc. (NASDAQ:MSFT) from invading their turf, MarketWatch notes.
Could Saleforce.com’s bold buy kick off a fresh wave of acquisitions in the data analytics/cloud software space? Speculators seem to think so as they snapped up shares of several industry favorites, including our own Splunk Inc. (NADSAQ: SPLK) trade, which gained more than 6% by the closing bell.
Meanwhile, an epic short squeeze is melting the minds (and brokerage accounts) of the fake-meat bears.
Beyond Meat Inc. (NASDAQ:BYND) continues to defy gravity as shares jumped more than 21% yesterday, posting new all-time closing highs. The stock has risen an eye-popping 70% since early Friday morning.
Don’t worry — you aren’t the only investor who thinks the Beyond Meat rally is beyond belief. In fact, speculators are tripping over themselves to bet against fake-meat mania. Borrowing fees on existing shorts jumped to more than 130% during Monday’s session, according to S3 Partners.
“Short interest stands at $814 million, or 5.87 million shares shorted, representing more than 50% of Beyond Meat’s float,” MarketWatch adds. “Beyond Meat is the sixth-largest short bet in the domestic packaged foods and meat sector, but bears are down $574 million in mark-to-market losses as the shares keep climbing.”
I know it might seem crazy, but Beyond could continue to squeeze as the week progresses. The stock won’t be able to keep up this pace forever. But right now, the plant-based protein bubble is in full effect — and it’s impossible to say when it might finally pop.
While gamblers chase after fake meat, homebuilder stocks consolidate near year-to-date highs.
The iShares U.S. Home Construction ETF (NYSE:ITB) is taking a quick breather after posting new 2019 highs late last week. Even after the May swoon took a bite out of the market, the ETF is still up 30% year-to-date, compared to a gain of just 15% in the S&P 500. That’s an impressive performance gap for a group of stocks that was left for dead during the fourth-quarter correction.
Of course, investors banking on a rate cut adds yet another tailwind to the homebuilder trade. When we last checked on the sector in May, homebuilder confidence was finally picking back up as mortgage rates dropped to their lowest level in more than a year. Meanwhile, the National Association of Home Builders’ monthly confidence index was hitting its highest rating since October.
I’ve certainly enjoyed the ride off the December lows, especially since we were able to add Lennar Corp. (NYSE:LEN) to our trading portfolio back in February. Our homebuilder bets have been especially satisfying because the financial media still don’t know what to make of the sector’s prospects. Just check out these two conflicting headlines an alert reader sent my way:
To recap: A lack of home flippers is bad. But home flippers jumping back into the market is — also bad? That’s confusing. I think I’ll just stick to the charts…