Stock market – Speculation calms down, Wall Street recovers part of the losses

The New York Stock Exchange recovered on Thursday, recouping some of the previous day’s losses as the speculative surge deflated.

The GME share of the troubled video game store chain GameStop fell 43.18% to 197.44 dollars after + 134% the day before and + 1000% over the month.

AFP

According to final results, the Dow Jones index rose 0.99% to 30,603.36 points. The technology-intensive Nasdaq rose 0.50% to 13,337.16 points. The S&P 500 gained 0.98% to 3,787.38 points.

“The market rebounded strongly from Wednesday’s chaos,” where Wall Street had suffered its worst decline since October, with the three major indices losing more than 2%, said Quincy Krosby of Prudential.

In the middle of the session, the Dow Jones and the Nasdaq had managed to completely erase these losses, before moderating their recovery. “The restrictions put in place by brokerage platforms used by amateur investors, who have jostled hedge funds around stocks like GameStop in recent days” have helped calm the market, “added the analyst.

Extreme volatility

The American online brokers Robinhood and TD Ameritrade have limited trading in GameStop (GME) and AMC shares in particular, but also in Blackberry and Nokia to curb extreme volatility around these securities which are the subject of a stock market battle. The policeman of the Stock Exchange, the SEC, also took note of this “volatility” and said “assess” the situation.

The GME share of the troubled video game store chain fell 43.18% to 197.44 dollars after + 134% the day before and + 1000% over the month. Gamestop was on the rise in post-close trading as Robinhood will re-authorize limited trades in the stock.

The VIX index, which portends volatility, fell back to around 21% on Thursday after rising the previous day to 37%, a high since November during electoral uncertainty. “On Wednesday, the sell-off was explained by the fact that the markets feared that continued volatility would cause further damage to the entire market,” said Quincy Krosby.

Money (metal), a new target?

The analyst was also closely following the price of silver (+ 4.42% to 26.51 dollars, a high in a month), the precious metal appearing to be the new target of rebel investors coordinated on social networks. “Silver was in their sights and the price of silver is rising fast and furiously because there is enthusiasm on the part of these traders,” said the expert from Prudential.

Investors also digested the figures of US growth which turned out to be worse than expected in the 4th quarter at 4% annualized, against a forecast of 4.4% for analysts. As a whole, 2020 saw the worst annual GDP contraction since 1946 at -3.5%.

This echoed the comments of Fed boss Jerome Powell the day before, who felt that the pace of the recovery had “weakened” in recent months, while reiterating the promises of a continuation of ultra monetary policy. -accommodating.

Among the stocks of the day, in addition to GameStop, most of the investor targets of the WallStreetBets forum of the Reddit platform were down after reaching highs: Blackberry (-41.59%), Nokia (-28.17%), AMC (-56.63%).

American Airlines, new darling

The good results of Apple (-3.50%) and Facebook (-2.62%) were met with mixed reactions. Those of American Airlines on the other hand, despite a loss of 9 billion dollars, were generously welcomed (+ 9.30%), its CEO having assured that 2021 would be “a year of recovery”. The company also seemed to have become the latest darling of the WallStreetBets forum stock marketers in revolt against Wall Street like GameStop. So much so that the online broker Robinhood has added the title AAL to its trading restrictions.

Among the clearings, the action of the American biotechnology company Novavax concluded up 2.16% and increased tenfold this trajectory in electronic exchanges after the close. Novavax announced after the market closed that its future vaccine was 89% effective against Covid-19.

In the bond market, the 10-year yield on Treasury bills rose to 1.0483% from 1.0161% the day before.

AFP

Posted: 01/28/2021, 11:44 PM

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