January 29: Market Summary
S&P 500, Dow end worst week since October; GameStop insanity continues
Here are today’s market moves:
S&P 500 down 1.93% to 3,714.24
Dow Jones down 2.03% to 29,982.62
Nasdaq down 2.0% to 13,070.69
Gold: $1,846
Bitcoin: $35,120
US10Y: 1.067%
What Happened?
The S&P 500 and Dow fell more than 3% this week, their strongest weekly declines since October.
The Cboe Volatility Index (VIX), a gauge of market volatility, increased 9.5% on Friday and is up 45% in January.
The SEC this morning said it was monitoring the trading restrictions by brokerage firms and was also investigating potential manipulative trading.
As individual investors have been pouring into hot stocks such as GameStop recently, retail trading platforms on popular brokerages struggled with outages.
Robinhood, the online trading brokerage, said it would reinstate some trading in shares and options that it restricted on Thursday.
Shares of hot stocks such as GameStop and AMC bounced back today, closing the day up 68% and 54%, respectively.
A revolution is starting on social media sites such as Reddit and Twitter, where small investors are uniting to buy shares and options of GameStop in order to expose the corruption of hedge funds and the financial system.
Hedge funds that have been hit might be feeling pressure to get rid of some of their favorite stock holdings so that they can raise cash to cover their short positions (might this lead to further market disruption?)
Some analysts say that investors should not be shocked by the recent declines in stock indexes given how quickly the market has risen this month.
What Else?
This Week
Monday: Earnings expected from Kimberly-Clark.
Tuesday: Earnings expected from 3M, General Electric, Microsoft, Starbucks, Verizon, and Texas Instruments; Data on U.S. home prices and consumer confidence.
Wednesday: Earnings expected from Apple, Facebook, and Tesla; FOMC monetary policy decision and briefing by Chair Jerome Powell.
Thursday: Weekly jobless claims and fourth-quarter GDP released; Earnings expected from Altria, Mastercard, McDonald’s, and Visa.
Friday: Earnings expected from Chevron, Caterpillar, and SAP.