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HOW FAR FROM GAMESTOP TO GAME OVER? (0803 GMT)
Last night on Wall Street was probably when the short
squeeze battle between a herd of solo traders and seasoned hedge
funds over GameStop GME.N stopped being funny, at least for
investors looking on from the sidelines,
The S&P 500 and the Nasdaq indexes lost about 2.6% each as
funds scrambled to sell their positions in stock market darlings
such as the FAANGs to make up for surging losses from bets made
against struggling smaller companies.
It all spoiled any parties lined up to celebrate bumper
results from Microsoft and Facebook; caught up in the broader
slump, shares in the two mega-caps stars posted only modest
gains. And Apple, despite beating expectations, saw shares
retreat in after-hours trade.
Tesla, with a 670% share price surge over the past year,
disappointed Wall Street meanwhile, with lacklustre Q4 profits
and lack of a target for 2021 deliveries.
Anyway, the New York spillover dragged down Asian bourses on
and European futures are 1% lower; a weaker session could mean
the pan-European STOXX 600 index kisses goodbye to remaining
2021 gains.
The Fed meeting was, not entirely unexpectedly, a sideshow;
it pledged in short to keep policy support intact until a full
economic rebound was in place.
But its downbeat assessment of the economy added to fears
for the recovery. Indeed, data later in the day is expected to
show the U.S. economy contracted at its sharpest pace since
World War Two in 2020.
Ten-year U.S. Treasury yields falling below 1% for the first
time in three weeks is probaly all that one needs to know about
today's risk-off mood.
(Julien Ponthus)
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MORNING CALL: SAY BYE BYE TO 2021 GAINS? (0626 GMT)
With European futures trading down between 0.7% and 1%, it
is most likely that the STOXX 600 will open in negative
territory year-to-date, kissing all remaining 2021 gains
goodbye.
The pan-European index settled at 402.98 points yesterday
and all it needs to do this morning is lose 4 points to go under
the 399.03 points it closed 2020 with.
Frankfurt's DAX, France's CAC 40, Milan's FTSE MIB and
Madrid's IBEX are already in red for 2021.
Even if Europe isn't set to get the same beating than Wall
Street yesterday, with the S&P and the Nasdaq losing 2.6%, the
old continent's bourses are bound to feel some pain of the short
squeeze frenzy hitting hedge funds.
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan skidded 2% while Japan's Nikkei fell 1.5%.
(Julien Ponthus)
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