Reddit Rally, Fed Meeting, Tesla, Apple Earnings – What’s new in the markets


By Geoffrey Smith – The war between retail traders on Reddit and short sellers on Wall Street continues, with GameStop set to double again on opening. Jerome Powell will hold his first press conference since Joe Biden was sworn in as President, with Janet Yellen now confirmed as Secretary of the Treasury. Microsoft’s revenue sets the bar high for Apple, Tesla and Facebook, all of which report after the close, and the EIA is releasing US oil inventory data. Here’s what you need to know about the financial markets on Thursday, January 27.

1. The Reddit rally continues

The extreme volatility generated by the brawl between Wall Street short sellers and the retail community clustered around the Reddit r / wallstreetbets discussion board shows no signs of abating.

The focus of attention is GameStop (NYSE 🙂 action, which is reported up 107% in pre-release, after daily gains of 22% on Monday and 93% on Tuesday. That gives the loss-making seller of video games, consoles and accessories a valuation of over $ 20 billion.

Theater operator AMC Entertainment (NYSE 🙂 is also listed up more than 110%, while clothing retailer Express (NYSE 🙂 is listed up 35% and Blackberry (TSX 🙂 is up 10%. %. Users of the discussion forum seem to have increasingly targeted Gabe Plotkin’s short Melvin Capital positions as a battle of wills and resources. Melvin on Tuesday raised $ 2.75 billion in new funds from hedge fund veterans Steven Cohen and Ken Griffin, through their Point72 and Citadel funds.

2. The Fed is preparing to follow the unchanged course

The Federal Reserve will conclude the last of its Federal Open Markets Committee. As no change in interest rates or the pace of asset purchases is expected, the focus will be on President Jerome Powell’s press conference, which will begin at 2:30 p.m. ET (9:30 a.m. GMT).

Confidence in the Fed’s commitment to keep pace with quantitative easing has returned in recent days, with broad consensus that the Fed is more afraid of tightening too soon rather than too late. The yield on the Treasury note fell back to 1.04% from a peak of 1.16% last week.

3. Mixed ready-to-open stocks; durable goods owed

US stocks are expected to open mixed later, with technology outperforming on another run of very strong quarterly numbers from Microsoft (NASDAQ 🙂 (see below).

As of 6:30 am ET (11:30 am GMT), were down 149 points, or 0.5%, while they were down 0.4%. were however up 0.3%, which Microsoft said was up 2.7% to a new all-time high.

Aside from the Fed, earnings are likely to trump macroeconomic developments, with the market largely ignoring news of Donald Trump’s impeachment process. for December are the only issues of note, due 8:30 a.m. ET.

Overnight, consumer confidence in France and Germany fell sharply under the weight of the spread of lockdowns, while China’s industrial profit growth accelerated.

4. Microsoft is laying the groundwork for solid technology benefits

Cloud hosting, PC shopping, remote working and video games created a powerful trio for Microsoft in the last quarter, which posted a 30% profit increase for the second quarter of its fiscal year. Sales rose 17% to $ 43.1 billion, beating expectations by almost 10%.

The numbers set the stage for more of the same from Big Tech over the next 24 hours, with Apple (NASDAQ :), Facebook (NASDAQ 🙂 and Tesla (NASDAQ 🙂 all set to report after the close.

To start the day, there will be updates from AT&T (NYSE :), Abbott Labs (NYSE :), Boeing (NYSE :), General Dynamics (NYSE :), Corning (NYSE 🙂 and Hess ( NYSE :), among others.

5. Oil stabilizes as tensions in the Gulf increase

Crude oil prices have remained at high levels after the United States prepares to increase its military presence in Saudi Arabia, amid growing tension with Iran. The reports come a day after explosions heard in the Saudi capital Riyadh, the origins of which have still not been firmly identified.

The Islamic Republic has resumed enriching uranium in an apparent attempt to strengthen its negotiating position ahead of an expected re-engagement of the Biden administration with the Joint Comprehensive Plan of Action that was abandoned by Donald Trump.

As of 6:45 a.m. ET, prices were flat at $ 52.63 per barrel, while futures were up 0.1% to $ 55.70 per barrel. The Energy Information Administration will release its latest data at 10:30 am ET, as usual


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