February 1: Market Summary
Stock indexes rebound; Wall Street Bets shifts focus to the silver market
Here are today’s market moves:
S&P 500 up 1.61% to 3,773.86
Dow Jones up 0.76% to 30,211.91
Nasdaq up 2.55% to 13,403.40
Gold: $1,860
Bitcoin: $33,807
US10Y: 1.067%
What Happened?
Stock indexes rebounded on Monday after having their worst week since October last week.
The Congressional Budget Office (CBO) says that the U.S. economy is improving faster than expected and projects that the economy will return to its pre-pandemic size by the middle of this year.
The labor force is projected to return to its pre-pandemic level by 2022.
Silver is up 7.82% to $29.05 today after the subreddit Wall Street Bets shifts their focus from GameStop to the silver market. Users of the forum were discussing how they might execute a short squeeze similar to that of GameStop last week.
Stocks had a volatile January, setting record highs and experiencing record volume from day traders on reddit who coordinated to propel heavily shorted stocks such as GameStop and AMC.
Some hedge funds were hit hard in January – Melvin Capital lost 53% after making bad bets including a large GameStop short position.
GameStop shares are down 31% today to $225. Short interest in the stock has plunged from 114% to 39% as hedge funds have covered their positions.
The Cboe Volatility Index (VIX), a gauge of market volatility, fell 9.9% on Monday. Some analysts expect volatility to calm down as hedge funds have significantly reduced their short positions on “meme stocks” that have been attracting attention from day traders on social media.
Earnings season continues this week, with over 100 companies from the S&P 500 reporting their quarterly results – including Amazon, Google, and Paypal.
What Else?
This Week
Monday: Earnings expected from Nintendo and Warner Music Group.
Tuesday: Earnings expected from Amazon, Google, Alibaba, Chipotle, ExxonMobil, BP, Pfizer, and UPS; Reserve Bank of Australia’s policy decision released.
Wednesday: Earnings expected from PayPal, Spotify, and Sony.
Thursday: Weekly jobless claims; Earnings expected from Ford, Pinterest, Snap, and Clorox.
Friday: January U.S. payrolls report and unemployment rate released.