After rallying irrationally on Tuesday post-inflation CPI reporting, markets will try to shake off Wednesday’s day of losses. After markets forgot about the U.S. and China trade war, the TikTok crackdown reminded investors about it.
The U.S. House of Representatives voted decisively in a 352-65 tally to pass the Protecting Americans from Foreign Adversary Controlled Applications Act bill. It effectively forces TikTok’s owner, China-based ByteDance, to sell the app within 180 days. Otherwise, the country would make it illegal for app stores and web servers to offer the TikTok app.
Meta Platforms (META) benefits tremendously from TikTok’s ban. Snapchat (SNAP) may take some of TikTok’s users, although it continues to lose users. Markets tried to start a rumor that RumbleON (RMBL) could buy TikTok, but it does not have enough funds to acquire it.
In the AI chip sector, Nvidia (NVDA) valiantly rallied back to $908.88 on Wednesday. Still, the breathtaking rally is losing momentum.
NVDA stock trades more than double a bubble price-to-earnings multiple at 76 times. Bears are widening their sales by dumping EV stocks. Tesla (TSLA) is down 31.79% YTD as of yesterday and earned the title of worst-performing S&P 500. Once the richest person in the world, CEO Elon Musk fell behind Amazon (AMZN) founder Jeff Bezos to take the third-richest person title.
Bulls should exercise added caution by selling a portion of their gains, in case selling momentum accelerates.
