[Weekly Syrup] BoC interest rate cut, Nvidia stock split final game, Gamestop to stop?

The Bank of Canada just shaved its key interest rate from 5% to 4.75%, the first drop we've seen since March 2020. Governor Macklem pointed out that with inflation nearing that sweet 2% target, they can finally ease up a bit on their policies. Circle July 24, 2024, on your calendar for the next rate decision. Meanwhile, since this update, Canada’s S&P/TSX Composite has enjoyed a nice 0.76% boost.

But before other recaps, let's look at something different:

"What's Moo'ed" is a space that captures fun, newsworthy, jaw-dropping and sometimes confusing (lmao) news clips for mooers so that you know this is a colorful world (or a weird and speechless one)

1) Squeezy beef is on the way

Cattles are stocking up in feedlots of Eastern Canada as Cargill's beef processing facility in Guelph closed down this week as hundreds of workers started to strike. My humble opinion is that they deserve a raise in salary. They earn almost the least among all jobs that get blood on hands, following bartenders that make Bloody Mary.

2) Now who is the real money maker?

Newer scammers are trying to pretend they are small merchants by using videos and photos. Maybe one day they can really replace real merchants and merchants can merge into their business. Buying stuff will be like living in the Matrix then.

3) Nacho cheese? Not your cheese!

Costco has issued a recall of Tillamook cheese slices after gray and black pieces of plastic were discovered in packs of the popular product. At least, it proves that they chopped them real hard.

4) Who's in? I'm in! Me too!

Recent data shows that non-monogamous relationships have been gaining interest and popularity among people looking for love. The society finally woke up and see the need for the undeniable and unshakable relationship among people, their beds, beddings and pillows.

Okay, let's dive back to the syrup:

Historical data from rate-cut cycles between 2000 and 2022 reveals that certain sectors, such as Consumer Staples, Real Estate, Financials, and Information Technology, tend to thrive when interest rates drop. After a long stretch of high rates, valuations in these sectors have dipped to tempting lows. This is especially true for real estate, with current valuations sitting over 55% below the two-decade average from 2000 to 2024. As borrowing rates decrease, we're likely to see a spike in housing demand.

Plus, lower rates allow Real Estate Investment Trusts (REITs) to snag financing at cheaper costs, boosting their profitability and ability to pay out dividends. Looks like it's time to dust off those house-hunting apps and start dreaming! And who knows, maybe even your tech stock might throw you a surprise party with those low rates!

Lower interest rates open the door to high-dividend assets, which can see their valuations climb, making their cash flow even more appealing. When the Bank of Canada and markets predict a soft landing, market liquidity and risk appetite typically go up, driving investors to seek higher returns.

This scenario often boosts overall stock market valuations. High dividend stocks, with their steady cash flow and defensive nature, become even more attractive as risk-free interest rates drop. This lowers the discount rate and raises the present value of these stocks, drawing in more capital.

Before they spilled the beans during the Q1 2024 earnings call on May 22, NVDA closed at $949.50. Since then, the stock has shot past the $1,150 milestone, hitting record highs.

To get in on the split action, investors need to snag some NVDA shares before the market shuts down at 4 pm ET on June 6, 2024. Remember when Nvidia pulled a similar move back in May 2021 with a 4-for-1 split? Shares soared over 500%, leaving investors itching to see what's in store this time around.

When it comes to Nvidia's upcoming stock split, there are some key dates.

Today, June 10, 2024, these split-adjusted shares will hit the market running at their fresh price.

Remember, the split won't change the overall value of your holdings; it's just a different way of divvying up your ownership. Expect to see tweaks in your brokerage account between the market close on June 7 and the opening on June 10, but don't worry, no action is needed on your end for the split to happen smoothly. On top of all this, Nvidia's throwing in some extra goodies with a hefty 150% bump in cash dividends, jumping from $0.04 to $0.10 per share, meaning post-split, you'll still be pocketing a solid $0.01 per share dividend.

While a stock split doesn't directly boost a shareholder's worth or influence, it's commonly interpreted as a positive indicator. Investors tend to see it as a bullish move, suggesting management's confidence in the company's future financial prospects.

In this case, each existing share will multiply into nine more, with each trading at a fraction of the original price.

Although this move doesn't alter the company's core operations or market valuation, it does underscore Nvidia's dedication to enhancing accessibility and flexibility for a wider investor base.

Roaring Kitty is at it again! Just last month, Keith Gill, better known as Roaring Kitty, sparked a fresh wave of 2021's meme-stock frenzy with tweets hinting he was back in the GameStop game.

This week, he poured fuel on the fire by sharing screenshots of his hefty stock and option positions in the company, then topping it off with a live stream. The stream, which was his first YouTube appearance in three years, drew a jaw-dropping 600,000 viewers.

The 2024 frenzy surrounding meme stocks owes much of its momentum to Keith Gill, a prominent figure within the community of U.S. retail investors. Gill gained fame for his influential role in fueling the GameStop surge of 2021, harnessing the force of social media, particularly a Reddit forum, to rally retail traders and challenge the traditional dominance of Wall Street, leading to a substantial spike in GameStop's stock price.

Making a dramatic comeback to the social media scene three years later, Gill subtly hinted at potential activity, sparking a fresh wave of enthusiasm for meme stocks. One common characteristic among these stocks is their significant short interest, rendering them attractive targets for retail investors.

When short sellers are compelled to repurchase shares to cover their positions, the demand for the stock may surpass the available supply, causing prices to soar even higher. This scenario is commonly referred to as a "short squeeze".

Missed the latest investment wave? Don’t fret – the key is to focus on upcoming opportunities.

Remember, a sudden spike in stock prices often comes with heightened risk, particularly if you lack a deep understanding of the stock or a disciplined stop-loss strategy

Moomoo Learn is here to equip you with actionable trading strategies to help you spot and capitalize on future investment prospects.

What do you think of the BoC interest rate cut influence? And what's your take on other hot issues in the past week? How they can earn you more money (I wish that happens to you)?

Share your stories, ideas, feelings and emojis in the comments below:

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