While Twitter felt sick in the first week of July, Facebook announced Threads, its microblogging service with a new and exciting feature – no Elon Musk. Let's delve into how the release of this new mobile app could potentially impact the financial markets.
Twitter ex-shareholders must be happy that the company is no longer publicly traded. Measures such as limiting the number of tweets one can read per day were unlikely to inspire awe in market participants. Therefore, there was a possibility of encountering numerous tweets featuring screenshots of a significant decline in the stock price. However, this was not the case, because Twitter didn’t work.
Now, let's discuss Threads and Meta stocks. Let’s check the chart showing their movements since the beginning of July. It's important to bear in mind that various factors influence the markets, and certain future changes are predictable. To forecast the following market movements, one can refer to the economic calendar, which provides information on significant upcoming economic events worldwide.
The trend depicted in the chart above following the announcement of Threads is neither excellent nor terrible. But we need to adopt a broader perspective. That’s why the following chart reveals the developments in Meta stock and the S&P 500 index since the beginning of the year.
Over the past six months, Meta stock has experienced a growth of 140% – almost ten times more than the S&P 500. So, if you have these share in your portfolio, we can only offer our congratulations. Such numbers were hard to forecast – many analysts were anticipating a decline in the US stock market, not even a slight increase.
Meta stock has got two primary main growth factors to thank. The first is better-than-expected US economic conditions. The anticipated recession did not materialize, and the unemployment rate remains at a sustainable level. The second one is the hype surrounding AI technology. Meta is in this race, alongside other big-tech companies that have also seen their prices rise.
The Threads mobile app doesn’t look like a game-changer. It provides (for now) well-known possibilities of the short-text-oriented social network. Hence, Threads may be seen as a logical addition to Meta's ecosystem.
In other words, we shouldn’t assign significant importance to the new app in determining Meta stock price. And the main question right now is whether the price will continue to grow. It’s complicated. On the one hand, big techs forge ahead, seemingly impervious to external factors. On the other, they’re becoming TOO large. We witnessed a similar situation before the dotcom bubble. Consequently, investments might be riskier than usual.
However, every trade involves a certain level of risk, and that’s okay. The key lies in diversification and conducting one's own analysis. Engaging in thorough research before making trade decisions is the only way to succeed in the markets.
