Market gets a boost from GDP report: here’s what I’m trading

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A weaker than expected GDP report of 2% annualized growth gives the market a boost on Thursday morning as inflation fears subside and bonds (TLT) remain strong. Bond traders must have seen this news on Wednesday as bonds skyrocketed ahead of this morning’s report.

Trade was a mess on Wednesday with Microsoft (MSFT) and Alphabet (GOOGL) covering wide weakness, but sometimes that kind of action helps set the stage for the next positive move.

The scale is much better early Thursday, with around 5,500 winners to 2,250 losers, but we only have just over 100 new highs over 12 months.

Speculative traders are still very busy looking for action, although the pockets of strong momentum are still quite narrow. We have a few SPAC games and a few short-squeeze attempts, but it’s still a very inconsistent environment, especially for thinner small caps.

A short piece I’m playing on today is Triterras (TRIT). I was badly burned on this one last year when it suffered a short stroke. This morning, the company said its audit committee determined that the brief report contained no material facts. The company is very late in releasing its financial statements and is expected to report in a few days. I have a small post.

While some of the best foundational stories I see right now are found in PSPCs, the structure of PSPCs has an impact on how these names evolve. A couple that I added this morning are Decarbonization Plus Acquisition Corporation III (DCRC) and IonQ, Inc. (IONQ).

Overall, the market continues to do well and I remain optimistic about the strength of trading through the end of the year.

Please note that due to factors such as low market capitalization and / or insufficient public float, we consider many of these names to be small cap stocks. You should be aware that these stocks are subject to more risk than stocks of large companies, including greater volatility, lower liquidity and less publicly available information, and that publications like this may have an effect on their stock prices.

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