The lower core personal consumption expenditure reading of 3.2% annualized posted last week is a bullish market catalyst. It gives the market continued momentum to follow through from its 8th weekly gain.
To play on the positive momentum, investors may consider the top mid-week trades.
Last Friday, China issued a startlingly unfriendly set of draft rules that would limit its people from playing digital games. On Tuesday, Tencent (TCEHY) and NetEase (NTES) won the regulator’s approval on 40 imported games. The reversal may give traders enough optimism to see the stock price of those two firms rise from here.
In the electric vehicle market, Chinese firm Nio continued its bounce from the $7.00 low. Despite rising quarterly losses, its EV sedan launch sparked investor interest.
Nio ET9 seats four passengers. Its rear seats have a 360-degree tray table. NIO stock is a rebound trade only. Its long-term prospects are poor. EV investors should take advantage of any weakness in Tesla (TSLA) stock. Tesla may come out with a mainstream Model 2 that would put legacy auto manufacturers out of business. Although General Motors (GM) and Ford (F) shares rebounded, it is potentially short-lived.
Tesla enjoys a strong moat as competitors fail to keep up.
In the sports sector, Manchester United (MANU) is the stock to watch. It sold a 25% stake to billionaire Jim Ratcliffe for $1.3 billion. Investors may want to sell MANU stock before it posts quarterly results. The firm trades at a high valuation. In addition, it lost 6.18 pence a share in the fourth quarter on an adjusted basis.