Gamestop (GME) is taking advantage of the surge in its share price caused by the return of The Roaring Kitty to sell up to an additional 75 million shares. To put that in context, GME currently has about 306 million shares outstanding so 75 million represents a 25% increase. At a price of $40/share, that works out to about $3 billion. That’s a lot of supply for the market to soak up and GME just opened down 15%. Econ 101: An increase in supply, everything else constant, results in a decrease in price.

In conjunction with the announcement, GME preannounced terrible 1Q24 results with sales down 29% year over year. As Jim Chanos tweeted earlier this morning, GME is essentially the latest iteration of Blockbuster/Radio Shack.

Ryan Cohen has essentially gone Will Smith on The Roaring Kitty ahead of the latter’s much anticipated YouTube Livestream today at 12pm EST. This is going to be a wild day of trading in GME shares!

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In addition to the GME drama, the May Jobs Report came in much stronger than expected with the economy adding 272k jobs compared to the 180k expected. Average hourly wages also increased 0.4% month over month compared to expectations of 0.3%. What that means is that the economy – at least according to this report – is still running hot and so the Fed is likely to continue holding interest rates at their current level for even longer.

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The debate about the first rate cut has now been pushed out to the September 18 meeting. Fed Futures currently place about a 50/50 chance of a rate cut at that meeting. Long term treasuries (TLT) are getting hit hard – i.e. interest rates are surging higher – which is in turn putting pressure on stocks.

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