It looks like the hype train has finally reached its last stop and the stock market might start to cool down. According to data from Vanda Research, a global research company that specializes in investment analysis, shows over the past few weeks or so retail investors aren’t putting as much money into the stock market compared to this time last year
Data and analysts say the reason for this new loss in interest is because vaccines are rolling out and things are slowly opening up again.
The End is Near
It’s been a tough year for people all around the world as the pandemic ravaged much of the world, but it appears the end is nigh. More than 689 million vaccine doses have been administered across the world with the United States alone accounting for 169 million, which is an average of 3 million doses per day.
Dr. Anthony Fauci said that vaccinating 70% to 85% of the United States population would allow things to return to normal, but people are already making moves to return to normalcy.
Edward Moya, a senior market analyst at Oanda, said the impact stimulus checks have had on retail investing and the stock market is losing steam, instead, all that money is going into travel. Moya says “Many Americans are looking to go big on attending sporting events, traveling across the country,… and revamping wardrobes before going out to restaurants, pubs, and returning to the office.”
Data suggest that vaccinated Americans are planning vacations with Google searches like “Google Flights” hitting peak popularity while search terms like “stock trading” and “investing” plunged in terms of interest.
Meme Stock, Schmeme Stock
Interest in meme stocks like GameStop and AMC theaters have fallen with GameStop Stock being worth around $170 a share and AMC stock at $9.79 a share at the time of this writing. This is a far cry from the 2,460% shot-to-the-moon increase that GameStop got in January, and now the company is seeking to gain some of that money, but Wall Street is skeptical.
GameStop stock prices took a hit earlier this week when the company announced they planned on selling $1 billion worth of their stock, and with regards to AMC, analysts predict the stock will go down 63% in value this year.
The Boredom Market Hypothesis
Some analysts on Well Streets turn to the Boredom Market Hypothesis to explain this past year’s market rally which is the idea that because everyone was indoors due to the lockdown, people started to gamble on the stock market. WallStreetBets took this opportunity to rally for GameStop and the result was the insanity that lead to people earning and losing tons of money.
As things settle down and the country opens up again, a new problem will arise: investors will now have to deal with the fact that people won’t be investing that much money in the stock market anymore and could see money dry up.