Fed Chair Jerome Powell took the podium this afternoon following a 2-day FOMC meeting. Reiterating improving labor conditions and maximum employment thanks to job gains over the last few months, markets turned green on Wednesday afternoon. At the same time, the Fed’s ramp-up of tapering efforts seems to have been buoyed by a slower rate hike over the next few years.
“In light of inflation developments and the further improvement in the labor market, the Committee decided to reduce the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities,” the Fed explained.
Regarding inflation, the Fed also explained that it’s taking a new “average inflation targeting” approach. This entails keeping rates near 0% for now. Three interest rate hikes are expected in 2023, and 5 FOMC members see rates topping 2.75% by 2024. Powell also said there’s no plan to raise rates until tapering is complete (potentially 1-2 FOMC meetings away). In light of this, the Fed Chair walked lightly on aggressive projections in the near term. He explains simply that we don’t know what next year has in store yet.
However, when Howard Schneider from Reuters asked, “Whatever omicron brings, you’re comfortable the economy can handle it without quantitative easing,” Powell’s immediate response was:
“Yes…if you look at the state of the economy and the strength of demand for labor – look at inflation, look at wages – I think moving forward the end of our taper by a few months is really an appropriate thing to do, I think omicron doesn’t really have much to do with that.“
Penny Stocks To Watch Right Now
The directive outlined by this week’s Fed meeting has pushed markets higher, heading into the tail-end of this week. Immediately following the conclusion of the meeting, several sector ETFs surged—these included funds related to utilities, healthcare, real estate, and technology.
Were there any laggards? The worst performers were ETFs in sectors like precious metals and energy. In light of these trends, we’re taking a closer look at a few penny stocks to watch after Fed Chair Powell’s latest comments.
- Clover Health Investments (NASDAQ: CLOV)
- Metacrine Inc. (NASDAQ: MTCR)
- Limelight Networks Inc. (NASDAQ: LLNW)
Clover Health Investments (NASDAQ: CLOV)
With healthcare stocks in focus, related companies have started to move. Clover Health is one of the beaten-down names in the healthcare arena that has pulled an about-face after Fed Chair Powell’s commentary. It has long been a focus of the meme stock community and found a firm place in retail traders’ hearts earlier this year. CLOV stock ultimately rallied to highs of nearly $29. But as with many meme stocks, the price has dramatically retreated over the last few years.
So what is there to watch when it comes to Clover Health? The company specializes in the technology side of things. Clover’s immediate focus is on seniors with a historical lack of access to affordable, high-quality healthcare. Its software platform, Clover Assistant, aggregates patient data from numerous endpoints across the healthcare system to support decision-making. Clover’s platform allows healthcare professionals to gain real-time, personalized recommendations at the point of care.
This month, the company launched its newest clinical program, targeting chronic kidney disease. Clover is partnering with Cricket Health to allow users of Clover Assistant access to renal care coordination and disease management services for CKD patients. Cricket’s MyCricket support program will allow enrolled Clover patients access to care teams including nurses, social workers, dieticians, and mentors to help them manage CKD. Included with this is a virtual program with access to a support community. Given the increase in virtual care and heightened interest in healthcare technology. CLOV stock has been one to watch this week.
Metacrine Inc. (NASDAQ: MTCR)
Another one of the health-related names on the list this week is Metacrine Inc. The company specializes in GI and liver disease treatment development. Its platform includes MET642 in ulcerative colitis and MET409 in patients with type 2 diabetes and NASH.
In particular, heading into the beginning of 2022, MET642 could be in a more direct focus. In its Q3 update, the company explained that it’s focusing resources on moving the treatment into a Phase 2 trial in the first half of next year. MET642 is also in a Phase 2a trial evaluating the therapy in non-alcoholic steatohepatitis (NASH) patients. Metacrine expects topline results during H1 of next year as well.
Meanwhile, on a more granular level, Eli Lilly And Co (NYSE: LLY) raised eyebrows on December 15 thanks to boosted guidance. This may (or may not) have brought some additional attention to companies doing trials using any of Elli Lilly’s platforms.
In Metacrine’s case, the company reported topline results from its Phase 2a trial of MET409 combined with Eli Lilly’s Jardiance (empagliflozin) in type 2 diabetes and NASH. Given the favorable results from those data, this could be another thing to factor in if MTCR stock is on your list right now.
Limelight Networks Inc. (NASDAQ: LLNW)
Shifting focus from healthcare to technology, Limelight Networks continued higher on December 15. The company specializes in digital content delivery services. Since the beginning of the fourth quarter, LLNW stock has managed to climb significantly higher on the back of several substantial updates. Much of this move came after Craig Hallum analysts upgraded Limelight in October. The firm boosted its rating from a Hold to Buy and increased its $3.50 price target to $4.
Adding to this were updates on new content delivery relationships that included NTT DOCOMO Inc., a Japanese mobile operator. Using its content delivery network software, Limelight helped NTT expand its content business and enhance user experience. Company CEO Bob Lyons expanded on progress like this in Limelight’s latest quarterly update.
“We have made meaningful progress with our revitalization strategy and are seeing early traction with the groundwork we laid supporting continued momentum. Our acquisition of Layer0 and soon to be launched accretive Application and Security products, the successful acceleration of our EdgeXtend solution, coupled with two new large client wins, support this momentum and improving financial performance into the fourth quarter and beyond.”
With renewed interest in growth sectors, including tech, LLNW stock could be one of the names to know heading into the second half of the week.
Hot Penny Stocks To Watch Right Now
Whether you’re looking for penny stocks to buy after the Fed meeting or you’re putting together a new watch list, knowing what’s behind certain market moves is essential. One of the ideas traders subscribe to is the phrase, The trend is your friend. Those looking for strong sectors, healthcare, and tech, have shined. Therefore, some of the cheap stocks in these industries could be ones to watch heading into the end of the week.