After a dark trading week: Wall Street is recovering

After a dark trading week
Wall Street is recovering

After the battle of strength between private speculators and hedge funds last week kept the stock markets in suspense, there was not much left of uncertainty on Monday. The Dow Jones and Nasdaq are on the up, while the Gamestop share is rapidly falling.

After the blackest trading week since October, Wall Street saw a strong recovery at the beginning of the week. Participants pointed to a slight reassurance. The volatility index, the "fear barometer", fell significantly. Traders spoke of falling short-selling rates among hedge funds, so volatility could decline further over the course of the week. "We have returned to normal," said Greg Harmon, founder and president of Dragonfly Capital.

Dow Jones 30,211.91

Nonetheless, the titles that were recently noticed as objects of speculation remained Gamestop, AMC Entertainment and Koss stand out. While the prices of Gamestop and Koss fell by 30.8 and 45.3 percent respectively, the shares of the cinema operator AMC rose by 0.3 percent after meanwhile more significant gains. Private investors talk to each other via social networks and have been driving the prices of selected stocks up for weeks without a fundamental background. More and more retailers are calling for the regulatory authorities. But the trading volumes have fallen significantly, added Harmon.

The Dow Jones Index gained 0.8 percent to 30,212 points. The S&P 500 rose 1.6 percent to 3,774 points. For the tech-savvy Nasdaq composite it went up by 2.5 percent to 13,403 points. The 2,524 (Friday: 860) price winners were compared to 700 (2,309) losers, while 65 (91) stocks closed unchanged.

Positive headlines on vaccine supply in Europe made some encouragement. But the recently declining infection rates in the USA also supported sentiment. The signal came from China that the economic recovery there is losing some of its strength, but that the economy is still expanding.

US data shows a mixed picture

GameStop Corporation
GameStop Corporation 224.00

The US data did not show a consistent picture. Activity in US industry slowed in January. The purchasing managers' index of the manufacturing sector calculated by the Institute for Supply Management (ISM) fell to 58.7 (previous month: 60.7), while economists had only forecast a decline to 60.0.

In contrast, activity in the US industry increased in January compared to the previous month. The one collected by IHS Markit Purchasing managers' index rose to 59.2 of 57.1 points. In the first reading a value of 59.1 was determined. "US industry has made an encouraging start to the new year, with production and order books growing at the fastest rates in more than six years," said IHS Markit chief economist Chris Williamson. US construction spending also rose more sharply than expected in December.

Chevron and Exxon in focus

Chevron
Chevron 71.15

The rose among the individual values Chevron and Exxon oil titles by 1.4 and 0.2 percent, respectively. At the weekend it became known that the heads of the two oil companies had explored the possibility of a merger last year. For the Ford share it went up 2.8 percent. The US automaker has entered into a strategic partnership with Google in the development of the connected vehicle. The titles of the Google mother alphabet rose by 3.6 percent.

Bucking the trend, the shares of American Airlines, Delta Air Lines, and United Airlines Holdings between 0.1 and 1.9 percent. A snowstorm swirls tourist traffic in the northeastern United States. The airlines have canceled all flights at New York's LaGuardia Airport, the airport operator announced. However, the negative effects are likely to remain limited, since in the midst of the corona pandemic, travel activity in the USA has decreased significantly, it said.

Euro with a slight recovery

The Euro recovered slightly from the daily losses against the dollar. In late US trading, it was around $ 1.2056. The attempt by the ECB to weaken the euro by threatening an interest rate cut is a very dangerous strategy, Danske Bank looked back on the previous week. The ECB cannot send out such a signal too often without actually acting on it, otherwise it would risk its credibility, warns market strategist Piet Haines Christiansen. The Dollar index meanwhile increased by 0.5 percent.

Gold in USD
Gold in USD 1,854.93

The Oil prices attracted with the Chinese economic data and the increased hopes for a further US aid package. In addition, a survey indicated that the OPEC member states increased the production volume less than expected in January, which means that the latest measures would be implemented, it said. The price of a barrel of the US WTI variety rose by 2.7 percent to $ 53.63, and Brent rose 2.5 percent to $ 56.40.

The Gold price also gained, fueled by a rally in silver. The troy ounce gained 0.7 percent to 1,859 dollars – despite the dollar's strength. Participants spoke of speculative silver purchases – fueled by corresponding calls on social media. After Gamestop it is now silver's turn, said a dealer. For the Silper price it went up by 6.7 percent. It closed at the highest settlement price in seven years.

. (tagsToTranslate) Wall Street (t) Dow Jones (t) ExxonMobil (t) Chevron