We're just a few days into March, and it's shaping up to be another volatile month. I'm going to take out my crystal ball, dust it off, and attempt three stock market predictions for the year ahead.
Ahhh, yes. It's ready now. Here are the three predictions for March. I'll elaborate on each of the calls.
- Shares of GameStop (GME -1.17%) will fall the day after posting its fiscal fourth-quarter results.
- Bitcoin (BTC 0.10%) will beat the market.
- Cathie Wood will beat the market.
Image source: Getty Images.
GameStop will fall the day after posting earnings
The chain of video game stores catapulted into the zeitgeist 14 months ago as the king of meme stocks, and it's done a lot of things right to extend its lifeline by galvanizing its legion of retail investors into customers and influencers. But even with the stock trading a lot higher than it was a couple of years ago, it has typically been a disaster during earnings season.
It's pretty jarring. Shares of GameStop have fallen the trading day after delivering financial results in 11 of the past 13 quarters. Let's go back through the past three years (and a bit) and look at the day the small-box chain posted its earnings report and how the market reacted the next time the trading bell rang.
- Nov. 29, 2018: Down 6.7% the next day
- April 2, 2019: Down 4.7%
- June 4, 2019: Down 35.6%
- Sept. 10, 2019: Down 9.8%
- Dec. 10, 2019: Down 15.1%
- March 26, 2020: Down 4.3%
- June 9, 2020: Up 2.2%
- Sept. 9, 2020: Down 15.2%
- Dec. 8, 2020: Down 19.4%
- March 23, 2021: Down 33.7%
- June 9, 2021: Down 27.2%
- Sept. 8, 2021: Up 0.2%
- Dec. 8, 2021: Down 10.3%
It's a pretty disheartening trend. The average move is a decline of 13.8%. GameStop has yet to announce when it will serve up its latest numbers, but it has historically done so in late March.
Bitcoin will beat the market
This prediction might have made perfect sense earlier this week when cryptocurrencies were rallying. Digital currencies soared in the final trading day of February, and kicked off March with positive momentum. Here we are on Friday morning, and Bitcoin is already down 5% in March.
I still believe in crypto, and Bitcoin remains the market bellwether. There's a lot of instability in the global markets, and the appeal of crypto should continue to grow. I realize Bitcoin has some catching up to do this month, but March is a long month.
Cathie Wood will beat the market
It's been feast or famine for ARK Invest co-founder, CEO, and primary stock picker Cathie Wood. Her flagship ARK Innovation ETF (ARKK -1.74%) trounced the market in 2020, only to falter in 2021 as her flavor of disruptive growth stocks fell out of favor. My call here is that ARK Innovation ETF will beat the market in March.
This is another bet where I realize I'm off to a bad start. ARK Innovation ETF is down 12% in March through Friday morning, but we were starting to see the market come around to her style of investing earlier this earnings season. She has a lot of ground to make up this month, but if there's any exchange-traded fund that can put the pedal to the metal, it's probably a vehicle with Wood at the wheel.
