Why US inflation will probably follow meme stocks lower

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With US stimulus payments at an end, far fewer amateur investors will be piling into the sharemarket.

being played out on Wall Street as hordes of young, amateur retail stock traders used social media to rout highly paid professional investors., and flush with cash from US government stimulus payments, these new retail traders found a way to generate huge profits for themselves while inflicting heavy losses on bigger institutional players by piling into heavily shorted stocks dubbed “meme stocks”.

Helping to drive the frenzy was the emergence of new online stock trading apps, such as Robinhood, which made buying and selling stocks fun, simple and seemingly free.listed last July at $US38 a share, giving it a market value of $US32 billion . But after it hit a peak of $US85 in intraday trading in early August, its share price has slumped to just over $US14.

At the start of the pandemic, US Congress also boosted unemployment benefits, and extended the range of people eligible for such payments, while extending the time people could continue to receive the payments. But millions of Americans used a sizeable chunk of their stimulus payments to play the sharemarket – many for the first time.

 

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Why US inflation will probably follow meme stocks lowerWith US stimulus payments at an end, far fewer amateur investors will be piling into the sharemarket.
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