Yazar: Geoffrey Smith
Investing.com – GameStop and other heavily short-selling stocks rose as brokers lifted restrictions. Elon Musk offered another support for Bitcoin; Caterpillar, Eli Lilly and Chevron reports their earnings; Euro zone GDP data exceeded expectations and oil is preparing to end the week calmly.
Here’s what you need to know in financial markets on Friday, January 29th.
1. Revenge of Cuff Shares
A series of heavily short-listed names, called Meme Stocks, that thousands of individual investors have set for the squeeze, soared ahead of the market after Robinhood and other brokers said they would remove trading restrictions on the stock.
Robinhood stopped all GameStop purchases on Thursday, while a group of brokers increased margin requirements or limited options at GameStop and others.
GameStop increased 98%, AMC Entertainment 53% and Blackberry 17%. All three suffered major losses on Thursday after brokers’ trading restrictions.
2. Musk raised Bitcoin
After Elon Musk added the word to his Twitter bio – yes you heard it right – Bitcoin shares rose 16% to $ 36,905.
The entrepreneur, who has been constantly tweeting about digital currency in recent months, expressed an intellectual admiration for the often guarded concept. In one of his tweets, he portrayed him as a monk praying to get rid of his mind of the idea of Bitcoin portrayed as a sexual attraction.
Foam and speculation were also present in other parts of the crypto universe. The trendy Dogecoin has more than tripled, gaining about 8% against the dollar, making its way to an all-time high.
3. Stock markets will open low; Chevron and Caterpillar earnings will be released
US markets will open low again. Hedge funds are expected to re-liquidate their long positions to meet margin expectations on short selling positions that are squeezed by individual investors.
The Nasdaq fell by 0.7% and 0.9%, down 177 points.
Earnings and economy calendar is busy again; Eli Lilly and Caterpillar have already submitted reports that exceeded expectations. Chevron, Honeywell, Charter Communications and Colgate-Palmolive will also share their reports.
On the data front, the main focus will be on personal income and personal expenditure data for December. The Michigan Consumer Sentiment survey is also on the calendar.
4. Optimistic GDP data released in the euro area
The euro zone economy may have contracted less than predicted in the fourth quarter.
Germany’s GDP rate rose 0.1%, slightly better than the recession the country had predicted for 2020. While the French GDP data fell 1.3%, below the 4% decline expectation, Spanish GDP actually grew by 0.6%, exceeding the contraction expectations. Austria’s GDP fell below expectations and fell 4.3% due to the deterioration in the ski season.
Germany’s unemployment rate in January was also better than expected, falling by 41,000.
5.Oil calm, Saudi production cut expected
Crude oil prices will end the week almost where it started. The main indicators are waiting for the Saudi Arabian cut that will begin next month.
Saudi Arabia has promised to cut 1 million barrels a day for the next two months. However, according to Reuters, it is expected to cut in March after increasing official sales prices for February.
Brent rose 0.9% to $ 55.61, up 0.6% to $ 52.62.
Baker Hughes will publish its weekly well count while CFTC will share figures on investors’ net commitments.