Amid the Gametop-led frenzy, Jefferies says there is ‘a lot of air’ to come out of a risky property. Another strategist says wait for Dip to buy – tech2.org

Amid the Gametop-led frenzy, Jefferies says there is ‘a lot of air’ to come out of a risky property. Another strategist says wait for Dip to buy


The market is implicated in a fighting chair as another day of retail-led feeding frenzy over short-stocks is about to come online.

If you thought the trading frenzy was a limited battle between Internet Day traders and Wall Street hedge funds: videogame retailer GameStop was one of the most traded stocks by value in the US on Wednesday.

Amateur investors, many based on the Reddit group WallStreetBets, are jumping into massive stocks, raising prices at astronomical levels and forcing hedge funds to sell larger, safer bets to cover losses.

Selloff is crawling for other investments and spreading sentimentality. The major indexes rode 2% to 3% on Wednesday and are set to continue surfing.

a must read: Trends? Diamond Hands? Lingo on WallStreetBets for your guide, fueling wild growth of Reddit Forum Gamestop

Our Phone of the day Led by global equity strategist Sean Darby comes from US equity researchers at Jefferies Bonus call From Sebastian Galli, a strategist at Nordia Asset Management.

Jefferies’ team is clear that improving share prices has little to do with the fundamentals. Rather, what is happening is a reflection of a “sentiment change” within some of the more heavily dominated and speculative parts of the market.

The group’s retail speculative index measures deviations from asset propensity where price is difficult to determine, high at 4 standard deviations. “Therefore, there is a lot of air to come out of risky financial assets,” the team said.

Derby’s team noted that the short-term concern is whether the “popping” of risky parts of the market will create a domino effect, as the mainstream equations are liquid to stem losses.

Galli at Nordia, the Nordic asset manager, cautions about Jefferies’ widespread sales. He also says that it is too early to take a dip, because there is so much to come.

Galey stated that the large move to cover the shorts at times of high leverage is generally more destructive. The reason for this is that the risk of loss on investment is hindering capital.

“As a result, the cost of hedging downside risk has increased exponentially,” Galli said. “This risk reduction may last for a few days, followed by a sharp liquidity-driven rebound in the US and a further rise in European stocks to some extent.”

Galli said that even a fevish Federal Reserve meeting on Wednesday may not take place around this market, which is another sign that it may be past.

The buzz

Share on GameStop GME,
+ 134.84%
Touched the $ 500 level in the premarket before pulling back. The stock was up by only $ 19 in 2021. Fashion brand Nakd NAKD,
+ 252.31%
There is another stock that is taking a big jump in prepaid by up to 130%.

This morning at a Securities and Exchange Commission, the cinema-theater chain AMC AMC,
+ 301.21%
Holders of the company’s convertible bonds have chosen to convert the notes into stocks, as the company’s shares have fallen nearly 330% since Tuesday.

Apple AAPL,
-0.77%,
Facebook fb,
-3.51%,
And Tesla TSLA,
-2.14%
Earned yesterday after closing. Tech giant Apple topped $ 100 billion in quarterly revenue for the first time, crushing expectations, as social-media company Facebook also beat estimates, with sales rising 156% from “other revenue” – such as virtual- Reality headset and video-chat device. Electric-carmaker Tesla reported its sixth straight quarterly profit, but it met expectations.

But if you can turn your eyes away from the stock market, it is a big day on the economic front. Initial and continuing jobless claims are due at 8:30 am EST, with about 875,000 people expected to apply for unemployment last week. The GDP numbers for the fourth quarter of 2020 will come at the same time as the new home-sales figures for December are reported at 10 am.

After the Federal Open Market Committee decided to hold monetary policy steady yesterday, Fed Chair Jerome Powell made dovish indications that the central bank had not restored the COVID-19 epidemic economy to health. “We haven’t won it yet,” he said.

market

It looks like another wild day on Wall Street. Yesterday’s tumor saw the Dow Jones Industrial Average DJIA.
-2.05%
Over 630 points, and stock market futures YM00,
-0.11%

ES00,
-0.36%

NQ00,
-0.99%
Are pointing down, set to continue to sell. Asian market NIK,
-1.53%

Hsi,
-2.55%

Hsi,
-2.55%
The board and European index fell to SXXP,
-0.69%

UKX,
-1.05%

DAX,
-0.76%

Px 1,
-0.10%
Are strongly red in color.

Chart

Our chart of the day from Marshall Gittler at BDSwiss shows that the S&P 500 SPX,
-2.57%
The largest drop since March 2020 and the VIX index of expected volatility saw its largest one-day rise since the COVID-19 epidemic hit in March 2020.

The tweet

When sharks root for fish. Billionaire entrepreneur and investor Mark Cuban – the fame of “Shark Tank” – lies to Reddit’s WallStreetBets merchants.

Random reads

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Key West wants to stop people from feeding fat, wild, free-roaming chickens.

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