U.S. equity markets ended lower Friday in the wake of feverish trading.
GameStop
and other stocks with strong short duration, indicating a volatile end to the first month of trading in 2021.
The Dow Jones Industrial Average fell 2%, or 621 points, to 29983, and the S&P 500 fell 1.9%, a day after rising nearly 1%. The technology-intensive Nasdaq Composite also lost 2%.
The DJIA and the S&P 500 fell more than 3%, their largest weekly decline since October. Both indexes ended January in the red. The Nasdaq rose 1.4% during the month, but had the worst week of the three indexes with a 3.5% decline.
Although the market has been stalled in the short term by the Reddit squabbling, observers say investors should not be surprised by the market’s recent losses as it is in the midst of a long uptrend. This week is actually the worst week for the major indexes since October 30, before the election.
The Dow Jones rose about 15% from October 30 to Thursday and set four records in January. The S&P 500 rose 16% over the same period and set five records in January.
The result of this long and good work is that investors are now trying to find solid clues about the direction of the markets, the economy and the pandemic,” he said.
Lindsay Bell,
Chief Investment Strategist Ally Invest.
In January, the supply of coronavirus vaccines and the tightening of lock-in measures made the front pages of trade shows around the world. At the same time, new variants of coronavirus vaccines are popping up around the world, raising questions about their effectiveness and the need to tighten containment measures.
“There is a bit of nervousness in the market,” she says.
This is reflected in the Cboy Volatility Index, an indicator of market stress. The VIX rose 9% on Friday and 45% in January.
Meanwhile, the GameStop title, which was previously up more than 100%, is up about 68% after closing at 44% on Thursday.
CMA Entertainment Program
54% more. Robinhood Markets, a popular destination for online retailers that has restricted trading on GameStop and AMC, said on Thursday that it would restore some of the previously restricted trading.
This ugly trade has caught the attention of lawmakers and regulators. On Thursday, Congressman Ocasio-Cortez (D., N.Y.) of Alexandria and Senator M. Klaus were both invited to attend the meeting. Ted Cruz (R., Texas) in
Criticize the Robin Hood. Friday morning, the Securities and Exchange Commission said it was reviewing trading restrictions on brokerage firms and monitoring for potentially manipulative transactions.
Wall Street suffered a scandal after members of the popular Reddit WallStreetBets forum bet on game retailer GameStop.
“The story of GameStop, where you have individual investors who are a new player in the market, is a story that people can’t ignore,” he said.
Luc Philippe,
Head of Private Banking at SYZ Private Banking. “There are important links for hedge funds missing in these stocks. These investors are selling even more long positions to liquidate short positions, which runs out of money and burdens the markets as a whole.
While it is difficult to accurately measure the impact of social media on politics and people’s attitudes, the capital markets provide a unique backdrop,” said Lindsey Bell, Chief Investment Strategist at Ally Invest. “You can really see it at work here in the stock market,” she said.
This could make the impact of social media even more dramatic, she said. Still, most transactions are controlled by institutional investors: “They have a lot more money.”
Deliveries of coronavirus vaccines and tighter lock-in measures around the world made headlines in equity markets in January. The Cboy Volatility Index, a measure of market stress, rose 9.5% on Friday and is up about 45% in January.
U.S. consumer spending fell 0.2% in December, according to the Bureau of Economic Analysis. It fell for the second consecutive month due to an increase in the number of coronavirus cases, although slightly less than economists had expected. Personal income rose 0.6%, which could boost the economy this year.
Jero Young,
The chief economist of Mirabaud Asset Management said he expects consumers to be more cautious in the short term, which will hurt the recovery, since consumer spending accounts for two-thirds of U.S. gross domestic product.
“But we also believe that there is pent-up demand that will increase consumption in the medium term,” he said.
The earnings season continued Friday at major oil companies.
Chevron
fell 4.3% after a loss in the fourth quarter.
Skyworks Solutions,
a chip manufacturer who
Apple,
rose 5.9% after the company announced its results Thursday after dark, beating analysts’ estimates. The board also authorized a $2 billion share buyback.
Eli Lilly
fell 1% after the company announced higher-than-expected sales and earnings and said it expects billion-dollar sales in 2021 for its Covid 19 treatment.
American Airlines,
which announced record losses for the past year on Thursday, fell 5.1%.
Pharmaceutical companies
Novavax
vaccine rose 65% after announcing that the Covid-19 vaccine was 89% effective in the latest round of trials in the UK Johnson & Johnson fell 3% after announcing that its own vaccine was 66% effective.
Megacap’s technology companies derailed after the first interview.
Microsoft
fell 2.9%. Google’s parent company, Alphabet, fell 1.4%.
“The hedge funds involved will have no choice but to divest themselves of some of their preferred positions to raise the necessary funds to cover their short positions,” he said.
Sima Shah,
Chief Strategist at Principal Global Investors, who added that she would see a further decline as an opportunity to buy technology stocks.
In January, vaccine deliveries and blockages made headlines on the stock exchanges.
Photo:
Courtney Crowe/Associated Press
Abroad, the Stoxx Europe 600 fell 1.3%. Relatively slow vaccine deployment in the European Union and recent supply delays have raised fears that markets could remain stalled for longer, investors said.
Swedish telecommunications company Ericsson jumped 6.7% after posting higher-than-expected earnings and increasing its market share. Meanwhile,
House Nokia
Shares listed in Finland rose 3.9%. Shares in the U.S.-listed cell phone company were among those that suffered the most from private investor pressure in recent days.
In Asia, most major benchmark indices fell. The Shanghai Composite Index fell 0.6% and Japan’s Nikkei 225 fell 1.9%. South Korea’s Kospi index fell 3%, its biggest one-day loss in five months.
In bond markets, the benchmark 10-year U.S. Treasury bond rate rose to 1.077% from 1.0555% on Thursday.
Bitcoin earns up to 15% after Tesla CEO
Elon Musk
mentioned the crypto current on his Twitter account and wrote “#bitcoin. ” It rose 1.1% to $33,796.
Corrections and
ImprovementsNovavax’s stock
rose after announcing that its Covid-19 vaccine is 89% effective. An earlier version of this article misspelled the company name. (Corrected January 29, 2021.)
Write to Paul Vigneault at [email protected] and Anne Hirtenstein at [email protected].
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