Gaming stocks
US equity markets just recorded their worst week of the year. Barring May 10, the S&P 500 (SPY) saw downward price action every day last week. The markets were down sharply on May 10 but finally managed to close marginally in the green.
The SPDR S&P 500 ETF is now down 2.0% in May, while the Invesco QQQ ETF (QQQ) is down 2.4%.
Trade war
Last week’s sell-off was driven by President Donald Trump’s surprise announcement that the United States would increase tariffs on $200 billion worth of Chinese goods. The president made the announcement last weekend and went ahead with the tariff hike on May 10. The tariffs were increased even as US-China talks were underway. Last year, both the United States and China also imposed tariffs on each other’s goods as talks were underway.
Price action
Last week, Activision Blizzard (ATVI) fell 2.4%, while GameStop (GME) saw downward price action of 5.4%. Electronic Arts (EA) and Take-Two Interactive Software (TTWO) saw upward price action of 1.5% and 1.7%, respectively. Gaming stocks are having a somber year, and most companies are underperforming the broader markets.
YTD (year-to-date) price action, Take-Two Interactive and Activision Blizzard are trading flat for the year. GameStop has fallen more than 30% this year. Last month, GameStop fell to multimonth lows after lowering its guidance. Electronic Arts is outperforming other gaming stocks by a wide margin. The stock is up 19% YTD.
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