Kangaroo
Marvell gains on an Nvidia partnership, crude oil whipsaws, and Nike’s earnings just didn't do it.
Tuesday was Wall Street’s best day in 10 months, giving the S&P 500’s worst month since 2022, a happy ending.
Marvell ($MRVL) soared 12.8% after Nvidia ($NVDA) announced a US$2B investment. Rocket Lab ($RKLB) gained 12% after German regulators greenlit its acquisition of laser communication firm Mynaric. And Bloom Energy ($BE) gained 13%, reversing its Monday move as AI-power sentiment improved.
U.S. equities have seen erratic price swings lately. Momentum is neither bullish nor bearish, instead falling into a ‘Kangaroo trend’ – a term popularised in 2020 to describe the unpredictable hops that followed the COVID selloff.
Tech and growth stocks have been impacted the most. The Technology Sector SPDR ETF ($XLK), which counts Microsoft ($MSFT) and Micron ($MU) in its top holdings, is down nearly 8% YTD.
In a way, the sea of red across portfolios this month can be attributed to the Red Sea. The Bab-el-Mandeb Strait became the latest oil chokepoint under threat as Yemen-based Houthis launched attacks on ships.
As a result, crude oil settled above US$100, marking a record 53% gain in March. That added to WTI futures-tracking ETFs like United States Oil Fund’s ($USO) 84% YTD gains. But the oil trade reversed course after headlines signalled a potential U.S. exit from the Iran war.
The energy sector whipsaw hasn’t impacted Fed Chair Jerome Powell’s view on the economy. He said this week that inflation seems to be ‘well anchored beyond the short term.’ His comments were enough to flip expectations from a rate hike back to a cut – a big deal for those trading more cautiously in recent weeks.
Nike ($NKE) investors are no strangers to market bounces. $NKE lost 8.7% after hours on Tuesday following a Q3 earnings beat that still failed to impress. On the other end was Snap ($SNAP), which rallied 14% after activist investor Irenic Capital said it was building a position in the social media company. Irenic’s ‘Snap Back to Reality’ plan includes a ‘6 steps to 7x’ $SNAP to US$26 per share.
As headlines like these drive price action more than fundamentals, sentiment flips in a matter of hours. In a Kangaroo market, conviction is low and reaction speed is high. The edge comes from being an outlier – and moving decisively when others hesitate.
This is not financial advice nor a recommendation to invest in the securities listed. The information presented is for general information purposes only and intended to be of a factual nature only. Past performance is not a reliable indicator of future performance. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.
Samy is a markets analyst at Stake, with seven years of experience in the world of investing, working across roles in private banking, venture capital and financial media. She has a Master’s degree in Finance and Data Analytics from The University of Sydney Business School.
