US stock futures fell as retail investors bounced Gametop and other stocks, pointing to a volatile end to 2021 in the first month of trading.
The futures linked to the S&P 500 declined 1.1% after rising nearly 1% on Thursday, indicating a reversal in direction. They retreated 1.6% associated with the Nasdaq-100.
GameStop’s shares rose more than 100% in the premarket, after closing 44% Thursday. AMC Entertainment was almost 60% above the opening bell.
Robinhood Markets, a popular venue for online traders, said late Thursday that it would resume some trading in stocks that were previously banned. American Airlines climbed nearly 10% of the premarket.
“GameStop story, where you have retail investors who are a new actor in the market, [is] A person that people cannot ignore, ”said Luke Phillip, head of private banking investment at SYZ Private Banking. “There are some important links to hedge funds that are short on those stocks.” Those investors are selling other long positions so that the money-losing positions can be closed, reducing the weight of the markets overall.
In January, the stock markets have seen headlines about the supply of coronavirus vaccines and measures for lockdown worldwide. The Coby Volatility Index, a gauge of tensions in the markets, rose 14% on Friday and is up more than 50% in January.
The earnings season continued, with oil major Chevron and construction equipment giant Caterpillar scheduled to report ahead of the opening bell. Pharmaceutical company Eli Lilly and aerospace firm Honeywell are also set to earn in the early hours.
A chip maker that Apple supplies,
Prepaid trading rose nearly 13% after earnings on Thursday, beating analysts’ estimates. Its board also approved a $ 2 billion share buyback.
Megacap tech companies slipped ahead of the opening bell. Apple declined 1.2%, Microsoft fell 2.1%, and Google’s parent company Alphabet declined 1.8%.
Seema Shah, chief strategist at Principal Global Investors, said, “Hedge funds that have been hit will have no choice but to get rid of some preferred holdings to raise that cash.” She will see further declines as a buying opportunity for tech stocks.
Foreign, all-continental stocks Europe fell 600%. Investors said the European Union’s relatively slow supply of vaccines and recent supply delays have led to concerns about prolonged lockout and weight loss in markets.
Swedish Telecom Ericsson jumped 7.7% after posting earnings that beat estimates, saying it had gained market share. Meanwhile, NokiaBelongs to
Listed shares in Finland rose about 5%. US-listed shares of the cellphone company have been buffeted by retail investors in recent times.
In Asia, most of the major benchmarks declined. The Shanghai Composite Index fell 0.6% and Japan’s Nikkei 225 fell 1.9%. South Korea’s Kospi index retreated 3% in the biggest daily decline in five months.
In bond markets, the benchmark 10-year US Treasury bond yield was 1.055%, up from 1.055% on Thursday. The dollar strengthened, with the WSJ Dollar Index rising 0.1% to its highest level in five weeks.
The Bureau of Economic Analysis in the US will release the latest data on consumer spending at 8:30 pm ET. Economists expect it to decline in the second month of December due to an increase in virus cases in December, indicating a loss of momentum in the economy at the end of the year.
“We expect more discretion from the US consumer in the short term,” said Giro Jung, chief economist at Mirabaud Asset Management, adding that it will affect the economic recovery as consumer spending makes up two-thirds of US GDP.
write to Anna Hirtenstein at [email protected]
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