Stock Market Today: Market Simmers, But Marijuana Stocks Blaze On

The major indices finished with mixed results on Tuesday as the stimulus picture starts to crystalize. Cannabis-related stocks were another story.

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(Image credit: Getty Images)

Tuesday's trading session was a mostly mixed affair from the start, albeit one that still managed to push (some of?) the major indices even further into record territory, if only marginally.

A proposed $1.9 billion stimulus plan came further into focus, with President Joe Biden saying he agreed with a Democratic proposal setting thresholds for the $1,400 direct payments: Individuals earning up to $75,000 (and households earning up to $150,000) would be eligible for the full amount.

The NFIB Small Business Optimism Index took a surprising tumble in January, however, declining to 95.0, which is three points below its 47-year average of 98.

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"The COVID-19 pandemic continues to dictate how small businesses operate and owners are worried about future business conditions and sales," says NFIB Chief Economist Bill Dunkelberg.

Despite that, the small-cap Russell 2000 was the best of the major indices, improving 0.4% to a new high of 2,299. The Nasdaq Composite (+0.1% to 14,007) also finished with a record close.

Other action in the stock market today:

  • The Dow Jones Industrial Average finished marginally lower to 31,375.
  • The S&P 500 slipped 0.1% to 3,911.
  • U.S. crude oil futures improved by 0.7% to $58.36 per barrel.
  • Gold futures extended their winning streak to three sessions, gaining 0.2% to $1,837.50 per ounce.
  • Bitcoin prices, at $44,134 on Monday, surged another 6.9% to $47,200. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

stock chart for 020921

In the Spotlight: Marijuana Stocks

The market might have been tepid Tuesday, but one budding industry continues to be white-hot.

Marijuana stocks delivered another day of spectacular gains, with the ETFMG Alternative Harvest ETF (MJ (opens in new tab)) of cannabis-related companies surging 13.4%, bringing its year-to-date gains to 101.3%.

While much of 2021's gains can be chalked up to enthusiasm for the Biden administration's seemingly friendly eye toward marijuana, Tuesday's excitement was tethered to something more concrete: the earnings calendar. Producer Canopy Growth (CGC (opens in new tab), +11.9%) reported yet another large quarterly net loss, but a better-than-expected 33% jump in revenues, and it's predicting it will turn a profit in 2022.

"Operating expenses declined, and Canopy Growth remains very well positioned with C$1.6 billion of cash and a strong partner in Constellation Brands to help Canopy expand its global distribution," adds Jason Wilson, cannabis research and banking expert with ETFMG.

Marijuana remains a very "Wild West" industry that's chock full of risk – but rising asset values show investor interest is strong and increasing. Those considering dipping in a foot, or maybe even just a toe, are likely better served in MJ or similar funds, such as our 2021 ETF suggestion.

But for those with the risk appetite and the desire to make a splash, these 10 marijuana stocks are among the most attractive entryways into this industry.

Kyle Woodley was long Bitcoin as of this writing.

Kyle Woodley
Senior Investing Editor, Kiplinger.com

Kyle is senior investing editor for Kiplinger.com. As a writer and columnist, he also specializes in exchange-traded funds. He joined Kiplinger in September 2017 after spending six years at InvestorPlace.com, where he managed the editorial staff. His work has appeared in several outlets, including U.S. News & World Report and MSN Money, he has appeared as a guest on Fox Business Network and Money Radio, and he has been quoted in MarketWatch, Vice and Univision, among other outlets. He is a proud graduate of The Ohio State University, where he earned a BA in journalism.