Meme stock frenzy is back, or is it?

After 3 years of being away from posting content online, Roaring kitty has returned by making its first online post in three years two days ago. This sent the meme stocks like $GME and $AMC to trade up 58% in pre-market trading on 14th May 2024 with at a time reaching upto 138%. Roaring Kitty's return spread a sentiment of a second meme stock frenzy after 2021 which in turn led to a mass buy of meme stocks increasing the price of these stocks. However, this later calmed down on market open and Producer Price Index reporting. With PPI increasing to 0.5% in April'24 more than Dow Jones estimate of 0.3%, it is certain for a prolonged high inflationary period. This was further complemented by today's Consumer Price Index reporting a mixed inflationary data at 0.3% below the estimated 0.4%. For some low CPI would mean prominent rate cuts from the Federal Reserve ahead, however, the effects of high PPI in April'24 will be realised by the consumers in May'24 and coming months. High CPI means low cashflow as generic goods and services will be a lot more expensive for consumers compared to in a stable low inflationary period, this will consequentially impact retail traders limiting their capital. Retail trader were prominent during the meme stock bullrun in 2021. 2021 bullrun was possible due to stimulus payments, low CPI, and low inflation, which meant increased cashflow for retail traders. However, it is different today with economic uncertainty and fears of continuous stagflation. Therefore, it is highly improbable for a second meme stock mania in 2024.

This is not a financial advice and mere consolidation of publicly available data in a coherent manner and shall interpreted as so. Please consult your financial adviser for investment advice and conduct your own research, reliance on this article is not advised.