Are Penny Stocks Your Best Bet In This Down Market?
The stock market is down again today, but penny stocks have little to do with it. One of the things discussed earlier is the unique aspects of these cheap stocks. One of these is their innate ability to perform detached from broader market trends. That became clearer as the September 20th session began unfolding (or unraveling depending on how you see things).
Why Are Stocks Down Today?
Stocks are down today because of heavy speculation. The situation with China Evergrande, the Chinese real estate developer, stoked more fears over the weekend. Concerns began growing as more details emerged on the potential severity of the situation. Here’s what we know right now. China Evergrande Group currently has more than $300 billion in liabilities right now.
It warned investors of cash flow issues and went as far as saying it could default if it isn’t able to raise money in the near term. It’s due to pay $83.5 million in Interest, another $47.5 million later in the month. But adding more uncertainty is the fact that Beijing hasn’t come out with direct commentary on whether it will or won’t lend a hand in this “Lehman-like” moment for China.
All of this also comes against the backdrop of the Fed’s upcoming meeting. The FOMC will begin a 2-day session starting Tuesday to discuss, among other things, monetary policy. A big focus will likely be on the Fed’s taper schedule. It has been suggested that the Fed is determining when begin paring its support and highlighted “substantial further progress” as a sign that it could start doing so. This week’s Fed meeting is when investors will hopefully gain some color on this decision and get more clarity about the timing of tapering.
Penny Stocks To Watch Right Now
1. Tuesday Morning Corp. (NASDAQ:TUEM)
While the stock market has been down for days, TUEM stock has moved in the opposite direction. In fact, since the 15th, shares have climbed from lows of $1.54 to over $2.30 this week. We highlighted one of the more prominent catalysts for this move last week. In the article “5 Penny Stocks To Buy According To Insiders In September,” TUEM was one of the beneficiaries of insider activity. Specifically, Tuesday Morning’s CEO, COO, and CMO purchased more than 760,000 shares between average prices of $1.68 and $1.81.
Tuesday Morning specializes in off-price retail in name-brand home goods. A jump in home sales and new construction may have brought some speculation to names within this retail marketplace. According to the company, its first-quarter fiscal 2022 comparable store sales are up low single digits quarter-to-date compared to the similar period in fiscal 2020. It also expects to report an Adjusted EBITDA loss for fiscal 2022. This is slightly improved from fiscal 2021, based on headwinds from the industry-wide supply chain…