Kaltbaum: Short stocks will reset once trading hype passes
Gary Kaltbaum and Michael Lee Strategy founder Michael Lee give investor’s outlook on short selling mania.
U.S. equity futures are pointing to a lower open when the final trading day of the week gets underway.
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The major futures indexes suggest a decline of 1% at the opening bell.
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U.S. markets have been roiled by trading by small investors of video game vendor GameStop that hurt hedge funds that bet the stock would fall.
Investors watched wild swings in GameStop, which skidded 44.3%, cinema chain AMC and other stocks that have become targets for online traders.
Several fell after Robinhood and other trading platforms restricted trading, causing an outcry by some customers.
GameStop shares are rebounding in the premarket, trading as higher as $400 per share after some trading curbs were lifted.
WHY GAMESTOP'S STOCK SURGE IS SHAKING WALL STREET
A busy week for earnings will finish with a trio of Dow members: Chevron, Caterpillar and Honeywell.
Investors will also have a full plate of economic reports to digest.
The Commerce Department will report personal income and spending for December. Economists surveyed by Refinitiv anticipate spending to decline 0.4% month-over-month, same as in November. Incomes, meantime, likely edged up 0.1%.
BIDEN ADVISER DEESE PUSHES STIMULUS RELIEF AFTER GDP, JOBLESS DATA
The Institute for Supply Management is out with its Chicago Purchasing Managers’ index for January. The closely-watched gauge of Midwest business activity is anticipated to slip a point to 58.5. Recall that 50 is the dividing line between expansion and contraction.
The University of Michigan’s final index of consumer sentiment for January will also be released. It’s expected to remain unchanged from the preliminary reading of 79.2 two weeks ago, according to economists surveyed by Refinitiv:
The National Association of Realtors is out with its index of pending home sales for December. Economists are anticipation a slight 0.1% decline from November’s reading of 125.7.
In Europe, London's FTSE fell 0.8%, Germany's DAX declined 1.0% and France's CAC gave up 0.9%.
In Asia, stock markets fell Friday amid worries about rising coronavirus cases, Wall Street volatility and U.S. economic aid plans.
The Nikkei 225 in Tokyo shed 1.9%, the Hang Seng in Hong Kong sank 0.9% and China's Shanghai Composite Index lost 0.6%.
|I:DJI||DOW JONES AVERAGES||30603.36||+300.19||+0.99%|
|I:COMP||NASDAQ COMPOSITE INDEX||13337.157758||+66.56||+0.50%|
Wall Street's benchmark S&P 500 index gained 1% on Thursday, recovering some of its loss from the previous day's 2.6% fall. The Dow Jones industrial average gained 1% to 30,603.36. The Nasdaq composite added 0.5% to 13,337.16.
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In energy markets, benchmark U.S. crude added 10 cents to $52.45 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 51 cents on Thursday to close at $52.34. Brent crude, the price standard for international oils, gained 30 cents to $55.83 per barrel in London.
The Associated Press contributed to this article.
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